‘Abandoned’ Telkom exchanges tell tale of change

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Johannesburg - Nearly 70 percent of Telkom’s 2 000 telephone exchanges are considered abandoned.

These 1 300 exchanges are not situated in highly profitable areas where competitors want to gain access to Telkom’s infrastructure, according to presentations to the industry regulator yesterday.

“We’re getting interest in our active and fully developed exchanges,” Alka Sood, Telkom’s new acting head of regulatory affairs, said.

The fixed-line operator is opposed to the implementation of local loop unbundling because it could suffer a potential loss of revenue.

Local loop unbundling is a universal regulatory intervention that would give Telkom’s fixed and mobile telecommunications rivals access to the last mile, which is the part on Telkom’s copper network that connects the exchange directly to home and business customers.

Yesterday, the Independent Communications Authority of SA (Icasa) invited suggestions from industry players during a workshop that will inform the process that will culminate in regulations for the unbundling.

The regulator would consider the withdrawal of draft regulations that it had already compiled, Icasa councillor Pieter Grootes said yesterday.

Telkom owns a vast fixed-line network spanning more than 140 000km countrywide, which would be difficult and expensive for its rivals to duplicate. Its competitors want access to infrastructure in areas that can generate high revenue.

The industry and regulator have struggled to agree on local loop unbundling for more than a decade. The intervention was first mooted by Ivy Matsepe-Casaburri, who was minister of communications from 1999 until her death in 2009.

The objectives of local loop unbundling include the facilitation of competition. It would allow more than 500 holders of electronic communications licences to introduce new products and services without having to invest in infrastructure.

The activity would also improve national broadband penetration, lead to higher speed of broadband at lower costs and make ubiquitous wireless connectivity possible, according to Icasa councillor William Stucke, who chaired the panel yesterday.

Angus Hay, the chief technology officer at converged fixed and mobile communications firm Neotel, argued that Telkom had already abandoned certain high-revenue areas to competitors by not unbundling its assets in those areas. Rivals had opted to roll out fibre-optic networks instead.

“There are half a dozen fibre networks in Sandton. There is no practical need for [local loop unbundling] in Sandton.”

He said the intervention was required in peri-urban and rural areas where there were towns with access to fibre-optic trunk networks but with no access to infrastructure that would convey the telecoms systems to homes and businesses.

“That’s where we will see the real competition,” he said.

Icasa has formed a committee to look into a trial local loop unbundling at an exchange in a less sought-after community and another in a sought-after area to understand its various affects.

This was at the suggestion of Mothibi Ramusi, the head of regulatory affairs at Cell C. Ramusi, Sood and representatives from Neotel, Internet Solutions and Broadband Infraco will man the committee. - Business Report


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