File image: IOL.
DURBAN - South Africa’s leading mobile network operator, MTN, said last week that the Electronic Amendment Bill, which was approved by the cabinet in November last year, will discourage investment in the sector.

Jacqui O’Sullivan, an executive for corporate affairs at MTN SA, said it was with great concern that the bill, irrespective of the risks associated with it, was approved by the cabinet.

“The risks associated with this bill are extensive and significant. This bill will discourage investment in the sector. A slowdown in capital investment in our mobile networks will degrade the service and quality of the networks. This will have serious and unintended consequences,” she said.

Vodacom also raised concern and said it did not provide certainty on licensing of current and future spectrum.

O'Sullivan said the bill did not address the single biggest issue facing the local telecommunications industry, which was the serious “spectrum crunch”.

“The withholding of spectrum will result in mobile operators needing to scale back plans for continued growth into rural areas. Operators will have no option but to re-farm the spectrum and to further densify the network, at increased cost,” she said.

The mobile operators first raised the red flags in November, 10 days after the bill was passed by the cabinet, and said the bill, if enacted, would make sweeping changes to the governance of the information and communications technology sector in South Africa.

The Free Market Foundation also criticised the amendment bill and said it ignored months of behind closed doors negotiations between mobile network operators and the government.

Another local mobile operator, Cell C, differed and said it supported the government’s objectives on wholesale open access network as encapsulated in the Electronic Amendment Bill as it was a constructive way to loosen the stranglehold of the current duopoly, which had resulted in costs remaining high.

O’Sullivan disagreed and said: “As a consequence of this, data costs will not be driven down, with the impact being worst felt by South Africa’s most economically marginalised communities."

- BUSINESS REPORT