US embassy cable - 04PRETORIA4028

UNCLAS PRETORIA 004028 
 
SIPDIS 
 
DEPT FOR AF/EPS/DKRZYWDA AND AF/S/TCRAID 
COMMERCE FOR 4510/ITA/IEP/ANESA/OA/JDIEMOND 
TREASURY FOR GCHRISTOPULOS, LSTURM, AND AJEWEL 
DEPT PASS USTR FOR PCOLEMAN, WJACKSON AND CHAMILTON 
 
E.O. 12958: N/A 
TAGS: ECPS, ETRD, ECON, EINT, SF 
SUBJECT:  MINISTER UNLEASHES MASSIVE TELECOMS LIBERALIZATION 
 
 
1. (U) SUMMARY.  In a surprise announcement, Minister of 
Communications Ivy Matsepe-Casaburri announced sweeping 
policy decisions to liberalize South Africa's 
telecommunications sector by February 2005.  Her 
announcement benefits Value-Added Network Service (VANS) 
providers who will be allowed to carry voice using any 
protocol.  The Minister said further announcements 
liberalizing the industry would be made in October.  END 
SUMMARY. 
 
2.  (U) Over three years ago, Minister of Communications Ivy 
Matsepe-Casaburri said that a big bang approach to telecoms 
liberalization would not take place in South Africa.  On 
September 2, however, Casaburri reversed herself as she 
revealed a decision to liberalize South Africa's telecoms 
sector on a massive scale.  Casaburri's announcement had 
been in the works since May when President Mbeki emphasized 
the need to lower the cost of doing business in South 
Africa. 
 
3.  (U) Casaburri said that a market study completed in 
December 2003 recommended that government address the 
following three areas: a) further liberalization of the 
telecoms sector; b) amendment of the various existing laws; 
and c) determination of a date by the Minister from which 
various provisions of the Act could be activated so as to 
stimulate sector growth. 
 
4.  (U) Casaburri's announcement detailed the following 
policy decisions and February 1, 2005 as the date from which 
the decisions would come into effect: 
 
- Mobile operators may utilize any fixed lines that may be 
required for the provision of the service including fixed 
lines made available by Telkom or any other person providing 
a public switched telecommunication service; 
 
- Persons may apply for a license to provide public pay 
phone services in any area of the Republic; 
 
- Value-added network services may carry voice using any 
protocol; 
 
- Value-added network services may also be provided by means 
of telecommunications facilities other than those provided 
by Telkom and the Second National Operator or any of them; 
 
- A person who provides a value added network service shall 
be entitled to cede or assign the right to use, or to sublet 
or part with control or otherwise dispose of the 
telecommunications facilities used for the provision of the 
value added network service; and 
 
- Private telecommunications network operators shall be 
entitled to resell spare capacity and facilities or to cede 
or assign his or her rights to use such facilities or to 
sublet or otherwise part with control thereof. 
 
- Effective January 18, 2005 public schools and public 
further education training institutions will be entitled to 
a 50% discount on all telecommunications calls to an 
Internet service provider and any fees levied by an Internet 
service provider for accessing the internet or transmitting 
and receiving any signals via the internet. 
 
5.  (U) Casaburri said that further policy announcements 
would be made in October of this year. Those announcements 
will address the issue of service-based licenses to be 
operational by May 2005, the remaining Under-Serviced Area 
Licenses (USALs), the Second National Operator (SNO), the 
Convergence Bill and the ICT BEE Charter. 
 
 
6.  (U) Industry analysts were broadly supportive of the 
announcement.  Ant Brooks of the Internet Service Providers 
Association said, "This is a very positive and very 
necessary step and the increased competition is going to be 
great for consumers." 
 
FRAZER