4 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
General Notices • Algemene Kennisgewings
Independent Communications Authority of South Africa/ Onafhanklike Kommunikasie-owerheid van Suid-Afrika INDEPENDENT COMMUNICATIONS AUTHORITY OF SOUTH AFRICA NOTICE 71 OF 2018
71 Independent Communications Authority of South Africa (13/2000): Invitation for written representations on priority markets in the electronic communications sector 41446
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 5
INVITATION INVITATION REPRESENTATIONS FOR FOR WRITTEN ON ON PRIORITY PRIORITY MARKETS THE THE IN IN
ELCTRONIC ELCTRONIC COMMUNICATIONS SECTOR
June June 2017, Independent Communications the the On On 30 1. 1. Authority Authority of South Africa "the "the ( (
Gazette' Gazette'
Authority Authority published published notice the ") ") in in indicating indicating conduct conduct Inquiry intention intention its its to to a a an an
terms terms of section section 4B(1)(a) "the "the Inquiry") in in ( ( Authority Authority of of Independent Independent Communications the the
of of of of (Act (Act "ICASA South South Africa 2000 2000 2000) Act, Act, No, No, 13 13 ( ( Act Act "). ").
of of The The this this Inquiry to: to: is is 2. 2. purpose purpose
identify identify markets markets electronic the the 2.1. 2.1. and in in segments segments communications communications or or
ante ante sector sector that susceptible susceptible regulations; regulations; and and to to ex ex are are
determine determine which of prioritised prioritised for these these markets should 2.2. 2.2. be be market market reviews and and
terms terms of section 67(4) of Electronic potential potential regulation the the in in Communications Communications
(Act (Act of of 2005) 2005) 2005 2005 "ECA Act, Act, No. No. 36 "). "). ( (
four four The The Inquiry conducted Phases Phases
is is 3. 3. in
Market Market Phase Phase Phase (i.e. (i.e. study, II II I I
- - - -
ill ill Discussion Discussion Document, Phase Public Hearings Document)2. Document)2.
Findings Findings Phase Phase and and IV IV - - - -
Authority Authority of of As As Phase Phase the the 4. 4. I, I, questionnaire questionnaire requesting information published published and part part a a
opinions opinions from stakeholders (including the the general general public) market inform inform study. study. to to its its
The The Authority of of received received questions clarification clarification 5. 5. from from Vodacom, MTN MTN and Cell 13 13 C C on on
questionnaire questionnaire July July 2017 2017 regarding the the and and further further questions Inquiry Inquiry the the and and process process
from from ISPA July July 2017. Vodacom, 14 14 further further for for requested requested MTN MTN and and Cell C C on on an an
for for extension extension submission of
their their respective submissions Phase Phase to to in in responses responses I I
requesting requesting clarity. clarity.
published4 published4
August August Authority Authority 4 4 2017, 2017, the On On its 6. 6. of of clarity clarity questions questions raised raised to to responses responses
aforementioned aforementioned stakeholders. by by the
Gazette Gazette Notice 485 485 No No 40945 No No in in
35to38 35to38 2lbidatpara 2lbidatpara
CASA CASA Available Available webs webs the the
te te on on 4 4
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6 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
Gazette5 Gazette5 Authority Authority granted extension extension addition, addition, the the the in in 7. 7. In In submit submit stakeholders stakeholders to to to to an an
their their of September the the questionnaire working days from from Phase Phase by by 25 to to 4 4 I I responses responses
October October 2017 2017 10 10 to to 2017.
October October Authority Authority (Market (Market Study) from 2017, 2017, received Phase Phase the the On On to 10 10 8. 8. I I responses responses
following following interested the the parties: parties:
Telkom Telkom 8.1.1. 8.1.1.
8.1.2. 8.1.2. Vodacom
8.1.3. 8.1.3. Cell Cell C C
8.1.4. 8.1.4. MTN
MWEB6 MWEB6 8.1.5. 8.1.5.
8.1.6. 8.1.6. Mzansi Media and Printing Lisetta Lisetta
The The Authority stakeholders written written invites invites 9. 9. representations representations make make the to to now now on on
The The written with with Discussion Discussion Document Phase Phase line line Inquiry. in in of of the representations representations II II
Authority Authority within forty (45) (45) working days should should reach the -five -five from of of the the the the date
publication publication of Document this this Discussion email by by at at
The The Authority consider consider written representations received received after will will not aforementioned aforementioned the the
working working closing closing date 45 45 days). days). (i.e. (i.e.
Written Written 10. 10.
representations representations detailed detailed possible possible should should opinions and and be be views views as as as as or or
far far expressed expressed should substantiated, conducted possible, possible, by evidence, be be studies studies as as as as
stakeholders, stakeholders, stakeholders' stakeholders' international international experience by by data, precedence. precedence. or or own own
Stakeholders Stakeholders request request that specific information of written written representations the the be 11. 11. may may
treated treated of of confidential confidential envisaged envisaged the section section 4D the Act. Act. 1CASA 1CASA in in In In as as adhering to to as as
provisions provisions of section 40(1) 40(1) simply simply stakeholders stakeholders of of not not (b) (b) and (4) the the ICASA Act, must must
indicate indicate that the the
for for financial, financial, commercial technical, but information, information, example, is is or or
should should
detailed detailed explanation(s) of how information provide provide such such harm harm is is likely likely to to a a cause cause
their their commercial commercial confidential confidential financial financial interest the public domain. to to if be in in it it A A to to or or were were
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 7
-confidential -confidential and and of of representation representation version version the the written be be must must submitted submitted with the non non
for for confidentiality. confidentiality. request request
Stakeholders Stakeholders must 12. 12. indicate indicate whether they opportunity require require make make oral oral to to an an
representations representations at public hearings, hearings, which due due held held be be in in may may course. course.
communication communication relating relating this this Inquiry All All 13. 13. directed directed Chairperson: must must the the to to to be be Priority Priority
Markets Markets Committee email email by by at at
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8 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
INTRODUCTION INTRODUCTION 1 1
APPROACH APPROACH PRIORITISATION PRIORITISATION TO TO 3 3
The The approach adopted adopted 3 3
of of markets markets Identification Identification 3 3
Prioritisation Prioritisation of identified markets 5 5
Specific Specific approach approach raised issues issues 12 12 in in on on responses responses
IDENTIFICATION IDENTIFICATION PRIORITY PRIORITY MARKETS OF OF 17 17
Wholesale Wholesale fixed fixed services 18 18 access access
Structural Structural features market and and of of of likelihood likelihood competition the the 19 19 concerns concerns
of of wholesale Importance Importance fixed fixed services 25 25 access access
Conclusion Conclusion 28 28
metropolitan metropolitan connectivity National National transmission and and 30 30
Structural Structural features of of of of market market competition likelihood likelihood the the and and 30 concerns concerns
of of connectivity connectivity Importance Importance national national transmission and metropolitan 35 35
Conclusion Conclusion 36 36
Wholesale Wholesale supply of mobile network services and and RAN services services 36 36
of of Structural Structural features likelihood competition competition and and 37 37 concerns concerns
of of wholesale supply Importance Importance mobile network services of of and and RAN services47 services47
Conclusion Conclusion 50 50
MARKETS MARKETS NOT NOT PRIORITISED 51 51
Upstream Upstream markets 51 51
Wholesale Wholesale markets 52 52
markets markets Retail Retail 55 55
APPENDIX APPENDIX MARKETS MARKETS IDENTIFICATION IDENTIFICATION OF OF 1: 1: 57 57
Retail Retail markets markets 57 57
The The market market supply mobile mobile retail retail Retail Retail R1: R1: of of services services 57 57
The The market market supply of voice telephony locations retail retail fixed Retail Retail R2: R2: at at 60 60
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 9
market market The The supply Retail Retail retail R3: R3: of of Internet Internet from fixed to to the access access
connections connections 63 63
market market The The retail retail supply Retail Retail R4: R4: network network services 65 of of managed data data
Wholesale Wholesale markets markets 66 66
Wholesale Wholesale market market W1: Wholesale supply supply mobile mobile termination services of of 66 66
Wholesale Wholesale market W2: W2: of of Wholesale Wholesale supply international mobile mobile roaming roaming services
66 66
Wholesale Wholesale supply supply market market W3: Wholesale mobile of of network network services 66 66
Wholesale Wholesale market Wholesale W4: W4: supply supply termination services of of fixed 67 67
Wholesale Wholesale market market supply of W5: W5: Wholesale fixed origination and and call call access, access,
transit transit 67 67
Wholesale Wholesale market market supply of asymmetric broadband broadband W6: W6: Wholesale origination origination
67 67
Wholesale Wholesale market supply supply of Internet connectivity W7: W7: Wholesale 68 68
Upstream Upstream markets 68 68
Upstream Upstream market International U1: U1: transmission transmission services 69 69
Upstream Upstream market transmission National National U2: U2: services services 69 69
Upstream Upstream connectivity connectivity market market Metropolitan Metropolitan U3: U3: 69 69
Upstream Upstream market Fixed Fixed U4: U4: services services 70 70 access access
Upstream Upstream market Mobile Mobile U5: U5: radio radio network services 71 71 access access
Summary Summary of markets markets 71 71
APPENDIX APPENDIX GOVERNMENT GOVERNMENT POLICY 2: 2: OBJECTIVES OBJECTIVES 72 72
National National Development Development (2011) (2011) Plan Plan 72 72
SA SA Connect Policy (2013) 73 73
DTPS DTPS Policy Directive ICASA ICASA (2016) to to 75 75
DIPS DIPS National National ICT Policy (2016) 76 76
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10 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
of of List List Figures Figures
broadband broadband Figure Figure Fixed technology technology market market supply by by 20 20 1: 1:
Frontier Frontier Economics estimated cumulative capital Figure Figure 2: 2: Africa Africa expenditures expenditures South South from in in
Billions) Billions) 2012 2012 2016 2016 (USD to to 45 45
Figure Figure Telkom Telkom fixed voice traffic traffic from FY2013 and and 3: 3: FY2017 FY2017 to to 54 revenue revenue
Summary Summary of markets markets Figure Figure links between and and 4: 4: them them 71 71
of of List List Tables Tables
of of Summary Summary Table Table markets vertical vertical links links between and and 1: 1: them them 17 17
Table Table Estimated national fibre 2: 2: infrastructure infrastructure market shares 31 31
Table Table Spectrum holdings by by (MHz), (MHz), 3: 3: operator operator 2017 2017 38 38
Table Table Service share 4: 4: estimates estimates 2016 2013 2013 revenue revenue 41 41 - -
subscriber subscriber Table Table Active Active share estimates 2013 5: 5: 2016 2016 42 42 - -
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 11
GLOSSARY GLOSSARY TERMS TERMS OF OF
point point Access Access
APN APN refers refers
gateway gateway between mobile mobile network to to the and and name name - - a a a
Internet Internet
ARPU ARPU Average Average indicates indicates refers refers that that the the total to to revenue revenue per user measure measure - - a a
operator operator earned earned subscriber. by by per per revenue revenue an
division division
CDMA CDMA
multiple multiple Code Code digital digital cellular refers refers technology technology where to to access access a a - -
signals signals transmitted through single channel available available using using the full full are are a a
spectrum. spectrum.
subscriber subscriber Digital Digital DSL DSL refers refers line line technology technology that transfers -bandwidth -bandwidth high high to to - -
information information lines. lines. over over copper
DIPS DIPS Department Department of of Telecommunications Telecommunications Postal Postal Services and and
Africa Africa EASSy EASSy
Submarine Submarine Eastern Eastern System Cable Cable undersea undersea fibre fibre optic cable an an - -
which which connects South Africa Mtunzini Mtunzini the the (via (via east east coast) to to Sudan (via (via Port on on
Sudan). Sudan).
Commission Commission EC EC European European
Electronic Electronic Communications (Act (Act ECA ECA of of Act, Act, 2005 2005 2005) No. No. 36
Electronic Electronic Communications Network Network ECNS ECNS
Service Service the the meaning assigned has has - -
the the ECA. to to it it in
ECS ECS Electronic Electronic Communications
Service Service the the has has meaning meaning assigned the the to to it it in in - -
ECA. ECA.
-to- -to- the -premises (incl. Fibre Fibre and and FTTB FTTB FTTP FTTP FTTH FTTH -to- -to- the -home Fibre Fibre and - -
-to- -to- the -business Fibre Fibre architecture architecture broadband broadband network fibre fibre using using optical
a a - -
provide provide for for residences the the connectivity last last mile local local loop used to to and and to to
businesses. businesses.
(CASA (CASA of of Authority Authority Independent Independent Communications South South Africa Africa
Internet Internet Protocol standard standard which IP IP transmission transmission of discrete allows allows the a a - -
of of This This `packets' `packets' data. data. devices devices that between between be be different different occurs occurs can can on on
networks. networks.
Internet Internet Service Provider retailers retailers which provide ISP ISP Internet Internet services access access - -
firms firms enable enable connect and and to to the to to to Internet. Internet. consumers consumers
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12 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
digital digital network network Integrated Integrated services
technology technology refers refers for for that that allows the the to to - -
transmission transmission of voice, voice, data, and traffic traffic through through images images public switched video video a a
telephone telephone network. network.
Provider's Provider's Internet Internet Service Service Association Association
Evolution Evolution Long Long Term
Technology Technology for for standard standard high high -speed -speed a a - -
telecommunication telecommunication services services for data data terminals. mobile mobile phones and and
Evolution Evolution Technology
Advanced Advanced Long Long Term network network technology LTE LTE - - -
that that enables the aggregation of -contiguous for for of of spectrum spectrum the provision non non
speed speed broadband services. high high
network network services Managed Managed data services services that corporate enable customers - -
their their sites connect connect applications different and and business to to all all in in geographic geographic
locations locations connect connect exchange and and data. to to
Network Network Operator Operator Mobile Mobile wireless wireless communications provider service service which -a -a
wireless wireless communications communications provides provides mobile voice and and data its its for for subscribed subscribed
customers. customers.
Virtual Virtual Network Network Mobile Mobile Operators Operators operators operators that do not not mobile own own - -
infrastructure infrastructure rather rather of wholesale infrastructure infrastructure make make MNO MNO and and to to access access use use
provide provide mobile mobile services to retail retail to to consumers. consumers.
Africa's Africa's South South National National Development Development Plan. Plan.
National National Distance route route Long Long national national fibre optic refers refers the the cable cable routes to to - -
project project through through consortium developed developed -build between of of Vodacom, Vodacom, MTN, MTN, a a co a
Telecom Telecom (formerly Neotel) conjunction conjunction and and Liquid the the with with South African in in
Agency Agency SOC SOC (SANRAL) National National South South Africa. Limited Limited Road Road across across
Authority Authority Regulatory Regulatory National National
Over- Over- The services services -Top -Top services services provided third refers refers by by to to party party content - -
distribute distribute multimedia providers, providers, that enable not not ISPs, ISPs, through through the to to consumers consumers
public public Internet.
switched switched telephone Public Public network circuit circuit -switched network that refers refers to to a a - -
for for provides provides voice telephone services services subscribers.
of of
Point Point refers refers interface interface point between to to communicating communicating two two presence presence an an - -
entities. entities. contain contain the basic PoPs PoPs data routing IP IP technology technology network network and and the are are
customers customers points points which connected. connected. Core to to transmission transmission capacity is is are are
required required able various the the be be
connect connect international international local local PoPs PoPs and and to to to in in IP IP an an network. network.
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 13
RAN RAN
network network Radio Radio refers refers mobile base stations backhaul the the and and to to access access - -
that that connects connects devices other network network such such mobile and and remotely remotely phones phones as as
controlled controlled devices with network. network. a a core core
Atlantic Atlantic South South Express SAex SAex Cable refers refers undersea undersea cable project that to to will will an an - -
Africa Africa South South South South connect connect America. America. North North to to and and
Atlantic Atlantic SAT SAT undersea undersea South South Cable Cable optic optic fibre fibre cable which connects South South -3 -3 3 3 - - an an
Africa Africa Melkbosstrand) (via (via Spain and Portugal. to to
SEACOM SEACOM
of of submarine submarine cable operator network network fibre fibre -optic cables that with with A A the the a a serve serve
of of West West Africa. Africa. East East and coasts coasts
micro micro enterprises medium medium Small Small and SMME SMME the the meaning meaning assigned the the to to has has it it in - -
ECA ECA
office office /home /home SOHO SOHO microenterprise, microenterprise, office office Small Small of of usually usually consisting less less than -a -a
employees. employees. ten ten
VoIP VoIP
Voice Voice Internet Protocol commonly commonly refers combination of to to over over a a - -
of of delivery delivery technologies technologies communications voice voice the the used used in in multimedia multimedia and and
public public sessions sessions Internet Protocol (IP) networks, such the the Internet. Internet. over over as as
Virtual Virtual Private Private Network interconnect interconnect network network which enables firms VPN VPN -a -a their their to to
geographically geographically dispersed telecommunications telecommunications infrastructure sites sites over over common
with with virtual separation of of traffic. traffic.
Africa Africa System System West West Cable Cable WACS WACS fibre fibre optic undersea undersea cable which connects connects an an - -
Yzerfontein) Yzerfontein) the South South Africa London), United United Kingdom and and (via (via (via to to runs runs
of of west west coast coast Africa. along along the
White White Policy White National National Integrated Paper Paper Paper Paper ICT ICT published ICT ICT by by the DTPS in in
Notice Notice of of October October 40325 40325 2016. 2016. 03 03 No. No.
for for
interoperability interoperability Worldwide Worldwide microwave WiMAX WiMAX communication communication refers refers to access access - -
that that of of standards standards Electrical and Electronics based based the Institute are are
Engineers' Engineers' 802.16 standard.
WLA WLA Wholesale local access access
Wireless Wireless Access Network Open Open WOAN WOAN proposed proposed public- sector sector private private -owned -a -a
wholesale wholesale consortium consortium that and and will will managed managed provide provide mobile network services.
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14 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
INTRODUCTION INTRODUCTION
The The Priority Market
1. 1. priority priority Inquiry Inquiry setting setting exercise, the "the "the Inquiry") is is ( ( a a purpose purpose
of of which which identify markets is is that that Authority susceptible susceptible ante ante regulation the the to to to to ex ex
for for prioritise prioritise of of of market market terms terms of section review review Section the the 67 67 ECA. ECA. 67 67 in in may may a a
Authority Authority the the provides provides the legislative the the ECA with address address market to to powers powers
competitive competitive introduce introduce failures failures and and remedies. remedies. pro- pro-
A A of of prioritisation prioritisation exercise this this that the 2. 2. Authority's Authority's nature nature resources resources ensures ensures are are
effectively effectively that allocated allocated efficiently market and and reviews to to have have the potential yield yield to to
of of competitive competitive material material impacts provision provision the the electronic electronic communications on on
of of achievement achievement services services benefit to to the and of of government policy consumers consumers
priorities. priorities. provides provides stakeholders with certainty also also It It which which markets relation relation to to in in
for for Authority Authority will focus market market immediate immediate the the reviews reviews the the in in future. future. on on
This This prioritisation exercise does not preclude 3. 3. Authority Authority from from identifying other the the
of of exercise, exercise, susceptible regulation markets markets outside and and conducting this this to to ante ante ex ex
of of of market market review thereto terms section section 67 the the ECA. in in a a
that that the the Authority's preliminary view Following Following the market study, the the following is is 4. 4.
markets markets should for for market market be be prioritised review: review: a a
Wholesale Wholesale fixed which refers services (upstream (upstream fixed fixed 4.1. 4.1. to to access, access, access access
wholesale wholesale market market and and U4) U4) of of asymmetric asymmetric broadband origination supply supply
(wholesale (wholesale market W6). W6).
Upstream Upstream infrastructure 4.2. 4.2. markets markets incorporating national transmission services
(upstream (upstream market metropolitan metropolitan connectivity (upstream market U2) U2) and U3). U3).
Wholesale Wholesale services services 4.3. 4.3. mobile incorporating incorporating mobile mobile radio network access access
services services (upstream of of market market wholesale wholesale supply mobile mobile network and and U5) U5)
services services (wholesale market market W3).
document document The The discussion 5. 5. structured structured terms of following sections: the the is is in in
The The 5.1. 5.1. for for identify identify prioritisation. prioritisation. markets markets approach approach used to to
for for prioritisation, prioritisation, Markets Markets 5.2. 5.2. of of why why motivating motivating markets each each the the have have been identified. identified.
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 15
for for prioritisation subject point point Markets Markets not time time (but this this 5.3. 5.3. at in in be be to to may may
prioritisation prioritisation future); future); in in
Appendix Appendix electronic electronic markets markets identified which which out the the 5.4. 5.4. 1, 1, sets sets the the in in
of of communications communications the the sector sector prioritisation prioritisation part part as as process; process;
Appendix Appendix which which 5.5. 5.5. 2, 2, government government sets sets out the they policy policy objectives main main as as
electronic electronic communications pertain pertain to to the sector. sector.
This gazette is also available free online at www.gpwonline.co.za 16 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
rn
of of The The Inquiry that identify identify Authority list list seeks seeks to the markets markets 7. 7. for for prioritise prioritise may may a a
market market going going emphasis emphasis that study study market reviews reviews forward. bears bears this not not is is It It a a
contemplated contemplated review review in in of of Therefore, Therefore, 67(4) 67(4) the the section section this Inquiry ECA. ECA. process process as as
seek seek undertake of review the the prescribed does does not to to components components market process process a a
which which include: include:
detailed detailed market definition a) a) exercise, exercise, a a
determination determination of effectiveness effectiveness of competition relevant relevant the the the b) b) in in a a
market, market,
determination determination of significant licensees licensees with and and c) c) market market power, power, a a
competitive competitive remedies where d) d) found found competition competition be be is is to to pro- pro-
ineffective. ineffective.
Rather, Rather, Inquiry is is 8. 8. of of screening the electronic electronic the the full of of process process one one range range
communications communications identify where Authority's services services the the to to to be best best resources resources are are
order order allocated allocated in in that that -depth -depth market reviews have the most potential to to in in in in engage engage
material material benefits yield yield and and to to to government government policy policy through consumers consumers
enhancements enhancements competition. competition. The first step the identification this this to to in in is is of of process process
Thereafter, Thereafter, markets. markets. for for account account factors factors the the taken the prioritisation into into to to be be
exercise exercise include competition screening high high level of of indicators indicators the the measures measures as as
likely likely of of factors factors that determine importance importance state state competition well well the of of the the as as as as
markets markets customers government government policy. policy. and and to to
of of Identification Identification markets markets
of of The The identification markets markets the the basis has has been 9. 9. of of of done done the the application on on
cases', cases', competition competition regulatory regulatory decisions principles, principles, guidance from from previous law law in in
elsewhere, elsewhere, South South Africa and and and inputs The The previous received received from from licensees.
' '
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 17
8 8
market market Markets Markets deliberately identified broader than the possible 10. 10. narrowest narrowest are are as as
order order definitions definitions provide provide collective in in of of connected connected market that to to segments segments may may a a
market market for for form form the logical basis review. review. neither neither useful useful at the It It is necessary necessary nor nor a a
prioritisation prioritisation stage stage exercise of identifying the to to in in narrowest narrowest possible engage engage an an
markets. markets.
The The prioritisation 10.1. 10.1. market market stage stage cannot detailed detailed definition in in engage engage a a
review review exercise exercise this should left left the the be be to to market market this this the stage. stage. In In as as process process
Authority Authority merely identifies possible possible candidate segments segments that be be may may
closely closely the the reviewed reviewed at at market review stage. more more
addition, addition, review 10.2. 10.2. In In of of set set connected makes makes related market to to it it or or sense sense a a
together together competitive competitive factors segments segments conditions conditions affecting them them or or as as may may
be be similar. similar.
industry industry The The telecommunications number of vertical layers which has has 11. 11. at at operators a a
participate. participate. layers subject subject Whilst Whilst these varying varying labels and definition, to to may may are are
they they typically have have the the Open all all in in their their interconnection interconnection roots roots Systems Systems model model "OSI "OSI ( (
which which partitions the industry model model layers into into "), "), layer layer input input where where each into into is is an an
precedent9, precedent9, Authority Authority consistent consistent with this this basis the the next layer. On and and has has the the
identified identified three layers, namely infrastructure infrastructure layer which which upstream upstream serves serves as as an an
input input wholesale network services which which the the into into input input layer, layer, turn into in in serves serves as as
services services the the retail layer. layer.
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18 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
Electronic Electronic communication facilities 12.1. 12.1. 10 10 already already defined within the the ECA and and are are
distinct distinct facilities obligations obligations regulations under also also subject leasing leasing and to to are are
ECA". ECA".
therefore therefore the the is is It It market market review conduct conduct to to not not necessary necessary process a a
for for obligations obligations facilities facilities identified subjected subjected such such and and be be under under certain certain to to to be be
of of the facilities facilities regulation. regulation. Many issues raised raised in in of of should should respect respect such such be be a a
the the appropriate appropriate directed directed existing existing the the ECA. to to in in processes processes
that that facilities facilities To To the extent regulation regulation 12.2. 12.2. of of further further needs needs the the such such than to to go go
of of what what achieved achieved under Chapter the the ECA, ECA, be be there there nothing nothing then then is is 8 8 in in may may
of of market market review telecommunications telecommunications services actual actual the the (as (as process process
opposed opposed facilities) that that prevents -competitive remedies that implicate to to pro pro
of of facilities facilities leasing arrangements. the market market As As electronic electronic review review such, such, a a
facilities facilities order order subject communications communications not required such such is is still in in facilities facilities to to
further further regulation regulation if deemed appropriate. to to
Prioritisation Prioritisation of of identified identified markets
The The 13. 13. is is for for next next step prioritise of market the the identified markets the to to purposes purposes
reviews. reviews. first This This step requires competition screening to identify markets process process a a
that that exhibit features which suggest suggest ineffective competition therefore and and may may may may
of of benefit benefit market market from from the closer scrutiny This review. review. of of markets markets -set -set then sub sub is is a a
importance importance policy policy objectives prioritised prioritised based materiality. the the to to and and on on
14. 14. Competition Competition screening identify markets within the the used used electronic electronic to to measures measures are
communications communications sector sector suggest which which exhibit features that potential potential may may
ineffective ineffective competition. The The market structure screening include: (i) measures measures
concentration, concentration, entry market market shares barriers expansion. and and and and and and Both to to (ii) (ii) are are
of of market market firms firms key key elements market structure, having existing existing regard regard the the the the to to in in
of of well well the role role
potential potential competition from entrants. addition, the In In as as new new as as
"electron "electron communications ' ' fach fach limited limited including including c c defined "includes but is is not the the ECA ty" ty" to wire, wire, (a) (a) In In Is Is any- any-
0 as
wiring wiring in multi -tenant buildings (including (including undersea land land -based mast mast optic optic cables); cable cable and antenna, fibre fibre (d) (d) (c) (c) (b) (b)
satellite satellite transponder, circuit, circuit, (e) (e) (f) (f) international international gateway; -landing -landing radio radio cable cable earth station; station, station, (g) (g) (h) (i) (i) Q) Q)
carrier carrier neutral other thing centres centres and apparatus apparatus exchange buildings, used data data hotels, be be (m) (m)
(k) (k) (1) (1) or or which which can can
connection connection electronic electronic th th -(i) -(i)
in in communications communications monitoring collocation collocation including, including, where applicable for, for, (II) (II) or or w w space; space;
equipment equipment (ill) (ill) poles poles associated associated manholes, manholes, hand holds and conduits; and within within ducts, ducts, cable trays, (W) (W) or or space space on on
support support -systems -systems and services, ancillary electronic communications facilities systems, systems, sub to to such otherwise otherwise or or
of of for for connectivity connectivity for for contrail various electronic communications facilities functionality, the the necessary necessary ng ng proper proper
of of and and utilisation electronic communications facilities control control integration such such
Chapter Chapter 1 1 Facilities Facilities titled titled Electron Leasing. 8 8 Communications Communications c c
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 19
Authority Authority will will account account submissions also also take into into study study that that the the market have have to to
identified identified competition concerns. concerns.
important important market market that that 15. 15. It is
structure structure features would note note also also be be to to considered considered as as
relevant relevant factors of of the the in in of of assessment assessment competition competition market effectiveness effectiveness and and
in in market market These determinative however, however, review. review. of of power power not not and and a a in in are are
themselves. themselves. Rather, Rather,
of of of assessment assessment effectiveness effectiveness the the the for for competition competition a a
market market review would beyond beyond of of features features the the consideration structural would would and and go go
consider consider other factors, such also also dynamic dynamic character functioning functioning and and of of the the as as
of of for for screening screening market. market. However, the the for for for for review review candidate candidate markets purpose purpose a a
which which of of of of cannot cannot detail, detail, the application into into that level structural structural market features go go
considered considered be be relevant relevant and and useful. to to are are
concentration. concentration. Market Market shares and and 16. 16. Market Market shares market and and concentration concentration
number number (which (which refers refers the and and size to to of of distribution distribution sellers) sellers) provide useful useful
information information
of of competition state state market. market. the the in in market market shares and and High High on on a a
concentration concentration of of provides provides preliminary indicator the the likelihood of of ineffective ineffective a a
competition competition given given market. in in any any
Market Market 17. 17.
shares shares concentration and and other other jurisdictions used used in in measures measures are are as as
preliminary preliminary indicators indicators
for for determining market the the European In In Commission Commission power. power.
guidance guidance document "EC "EC ") ") ( ( of of treatment treatment abusive abusive conduct the the dominant dominant firms, firms, by by on on
of of market shares shares the the role role is is explained explained follows: follows: as as
suggests suggests that "Experience "Experience higher higher market market share share and the the the the the
of of period period longer longer which which the the time it it likely likely is is is is held, held, the it it over over more more
it it that that important preliminary constitutes constitutes indication indication of of existence existence the the an an
of of dominant dominant position certain certain circumstances, and, and, in in of of possible possible a a
serious serious of of justifying justifying by by effects effects intervention abusive abusive conduct, the the an an
under under Article Commission Commission general general 82 82 However, the rule, rule, (1). (1). as as a
will will not Commission Commission whether whether final final conclusion to to not not come come to to or or as as a a
pursued pursued without examining all should should be be factors factors the the which case case a a
sufficient sufficient be be '" '" of of behaviour behaviour constrain constrain the the the to to undertaking undertaking may may
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20 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
of of The The assessment 18. 18. market market shares also also cited is is Authority's Authority's Guidelines the the in in for for
Reviews13 Reviews13
Market Market (the (the "Authority's "Authority's Guidelines ") ") of of factors factors the the to to be one one as as
considered considered when evaluating effectiveness the the of of competition.
of of relative relative "Assessment "Assessment market market shares: shares: Market shares provide an an
indication indication
of of of of extent extent market market licensee licensee the the
have have in in power power may may a a a a
particular particular
by by Market Market shares calculated calculated value value market. market. be be by by may may or or
depending depending volume volume the the
product product Although Although service service question. question. in in on on or or a a
high high
market market share share does not not necessarily whether licensee licensee indicate indicate a a
enjoys enjoys significant market market competition law law Africa Africa in in South power, power,
defines defines
below below being being dominant according firm firm the the scales: scales: to to as as a a
it it of of at at least has has that that 45% 45% market; market;
it it least least 35 has has %, %, of of at at but but less that that than than 45 market, market, %, %, unless unless
it it does does show show that have have it it not not market market can can power; power; or
it it has less than than 35% of of that that but has has market market, market, power." power."
Barriers Barriers 19. 19. to to entry expansion. expansion. and and factor factor This This refers refers of of conditions conditions and and to to entry entry
expansion, expansion, which provides of of information information existence the the potential potential competition on on
entrants entrants which which captured captured from from is is market market not not by shares and concentration. concentration. new new If If
difficult difficult for there there free firms entry, entry, is is it is competitive competitive profits, to to this this supra- supra- earn earn as as
would would invite invite
entry entry market which the the into into would would compete the profits. the the On On away away
other other significant hand, hand,
entry entry easier easier expansion expansion barriers make make and and for for firm firm with it it a a
market market maintain maintain high high to to
of of prices. prices. For this the power power high high and reason, reason, presence presence
persistent persistent barriers entry entry expansion expansion and and to to
factor factor for identification identification applied applied the the is is as as a a
of of priority markets. markets.
of of The The inclusion barriers barriers 20. 20. entry entry feature feature of to to the the EC for for framework framework identifying identifying are are a a
markets markets that susceptible regulation, regulation, where ante ante to to are are the the approach using using to to ex ex
barriers barriers explained explained follows: follows: is is as as
of of barriers barriers existence existence high high "The "The entry entry and development development to to to the of of
competition competition electronic electronic communications in in market market is considered an an
indication indication
regulatory regulatory that that intervention required required be be an an to to may may ensure ensure
development development the the of of barriers barriers competitive competitive market. market. Where entry entry to to a a are are
of of regulatory regulatory absence absence high high the the in in undertaking undertaking intervention, intervention, even even an
This gazette is also available free online at www.gpwonline.co.za
STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 21
that that is is efficient than incumbent incumbent unlikely unlikely the the is be be able to to enter enter more more to to
market market and successfully successfully compete compete the the
of of benefit benefit consumer." to to the the a a
14 14
Authority's Authority's consider The The Guidelines also also 21. 21.
factor factor for conditions conditions of of entry the the as as
of of assessment assessment competition: competition:
of of
into into "Ease "Ease
of of threat threat entry entry market: market: the the the entry entry defined defined into into new new a a
market market sufficient
of of market market constraint constraint the the may may pose pose as power power on on an an
market market existing existing licensee. licensee. However, such of of entry entry represents form form a a
supply supply legal -side -side substitution. Excluding and and regulatory barriers
potential potential for independent (assessed (assessed when when defining market), the a a
market market constrained constrained is is of of entry entry by costs costs Barriers the the such such entry. to to
of of
result result independent independent market exist entry entry substantial sunk may may as as a a
market market participants having existing existing exclusive exclusive costs, costs, purchasing purchasing
of of key key input input level level agreements agreements suppliers whether with with the the or or
technological technological innovation potential potential market impact impact Ease Ease may may entry. entry. on on
of of market market must entry entry likely and sufficient be be timely, to to in in order order to to a a
increase increase the the of of 15 15 level level competition competition market. market. in in " " a a
of of
Likelihood Likelihood 22. 22. competition competition
For For there
potential potential impact from to to be be concerns. concerns. a a a a
market market review, review,
markets markets where it it should focus there there higher likelihood of of is is on on a a
ineffective ineffective competition. Whilst Whilst factors that consider barriers the the entry entry and and to to
for for concentration concentration intended intended markets markets where there ineffective be be to to screen screen are are may may
competition, competition, the prioritisation exercise also of of considers considers other indicators the the
of of competition likelihood likelihood This This includes the received received to to the concerns. concerns. responses
Questionnairel6 Questionnairel6 Authority's Authority's
where where respondents
asked asked provide provide view view to to were were on on a a
which which markets These These relevant relevant identifying which should should prioritized. be be all all in in are are
that that markets markets should prioritised the basis be be competition competition already already have have on on concerns concerns
been been raised.
" " Staff Staff European European Commission Comm Comm ssion 2014 document document Document Document Explanatory Note Accompanying Working Working the the
Commission Commission relevant relevant product and markets Recommendation Recommendation within within the electronic service service sector sector communications communications on on
of of /EC /EC regulation regulation susceptible susceptible in in accordance with Directive 2002/21 ante ante to to of of ex ex European European Parliament and the the the
regulatory regulatory framework for electronic communications networks and Council Council services. services.
common common on on a a 8 p. p.
5 5
ICASA ICASA A Guideline for Conducting Market issued issued Reviews Reviews March ", ",
2010, 2010, 8 8 13 13 on on p. p.
e e of of ICASA ICASA notice June 485 485 2017, Government Gazette 40945 dated No No 30th 30th 2017. 2017.
This gazette is also available free online at www.gpwonline.co.za
22 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
objectives objectives (both (both individuals business). business). Again, if and and and and consumers consumers resources are are
they they which which best best deployed then should focus to to be markets markets not only likely to to are are on on
ineffectively ineffectively competitive, competitive, but remedying remedying ineffective competition also also where be be any any
material material likely likely is is deliver deliver gains gains South Africa. to to to
Government Government policy objectives. relevant relevant 24. 24. It It is to to consider government policy
priority priority objectives objectives This stated stated explicitly setting setting exercise. the is is in in in Authority's Authority's a a
Guidelinesl7 Guidelinesl7 justifiable justifiable Authority Authority that that but but also the basis the should have is is on on
broader broader policy framework regard regard the to to of of which which operates. operates. A the the key it it in in summary summary
of of government government policy objectives objectives contained contained ICTs ICTs is is in in in in Appendix Appendix respect respect 2. 2.
This This 25. 25. Authority's Authority's where already already reflected Strategic approach approach the the Plan in in is is the the own own
number number of frameworks, aligned aligned with with policies plan plan is is for for and and including, example, a a
Development Development "NDP "NDP provides the the the National Plan Plan ( ( which which overarching ") ")
for for government government out out policy policy strategic direction and and the the ICT including sector, sector, maps maps
setting setting goals goals outcomes outcomes achieved guides guides the out out 2030. The and and NDP to to by by be be
Authority Authority Authority Authority identifying identifying priorities where its its and is is in in expected expected the the to to
NDP.18 NDP.18 of of contribute contribute the the achievement outcomes outlined the the the to to in in
The The ECA section section 3(2) 26. 26. in in that that Authority Authority stipulates stipulates the Minister issue the the also also to to may may
of of directions directions number relation relation policy policy in in market market enquiries matters, matters, including and and to to a a
determination determination the the of of priorities: priorities:
Minster Minster subject subject "(2) "(2) subsections subsections and issue issue to to the The The (3) (3) (5), (5), to to may, may,
subject subject subsection subsection Authority Authority Agency policy issue issue to the to to (5), (5), or, or,
of of directions directions consistent objects objects this with with the national national policies and Act, Act,
of of related related legislation legislation relation the the to to in in - -
of of undertaking undertaking the the "(a) "(a) in in of of of of enquiry enquiry terms terms section 4B 4B the an an
Act Act Authority's Authority's jurisdiction (CASA (CASA matter matter and and within within the any any on on
of of of Minister Minister submission submission reports the the in in to to the respect respect such such
matter; matter;
for for determination determination the the the the (b) (b) of of of priorities priorities development development
electronic electronic communications networks and electronic electronic
other other contemplated contemplated in communications communications services service service or or any any
Chapter Chapter 3; 3;
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 23
consideration consideration (c) (c) of of matter matter the the within the Authority's or or any any
Agency's Agency's it it jurisdiction jurisdiction reasonably placed by Minister Minister before before the the
for for consideration; consideration; urgent urgent
for for by by guidelines guidelines determination determination the the (d) (d) of of Authority Authority spectrum spectrum the the
and and fees; fees;
for for other other matter which which be be (e) (e) application application the the may may any any necessary
of of Act Act related related legislation." this this emphasis) emphasis) the the (own (own or or
Materiality. Materiality. Market Market reviews highly -intensive should should therefore and and 27. 27. be be are are resource
targeted targeted
of of that that at at markets that matter marginal markets markets instead instead to to end users users are are
A A business business customers). materiality consideration (both (both individuals and involves involves
identifying identifying that that important important number of markets markets of factors, factors, including in in terms terms the the are are a a
market market size size (i.e. (i.e.
of of of of significant significant market that number number the the used used by large it it is is is is a a a
of of market market businesses) businesses) the future importance importance the the and and the in in (i.e. (i.e. is is consumers consumers or
of of the the electronic electronic communications growing growing importance market market sector). This in in
approach approach should of of out out markets markets where competition rule rule the identification concerns concerns
where where but but likely likely This approach broadly broadly be be the potential be small. harm harm is is may may may
what what has has been proposed line line
in in with with stakeholders stakeholders Phase Phase by by in to to response response some some
1. 1.
factors factors into into considerati Other Other taken taken
identifying identifying markets and and 28. 28. In In for for other other prioritisation, prioritisation, few factors screening screening them them were were a a
consideration. consideration. taken taken into into
for for wholesale wholesale Preference Preference markets. markets. regulators regulators 29. 29. When When seek to improve
competiveness competiveness market, market, regulations retail retail in in typically typically applied wholesale at at the a a are are
order order unlock unlock competition downstream. to to level level in in only only Regulations Regulations applied applied at are are
when when possible possible remedies the wholesale the the retail level all all would would not at at level level be be
effective effective ensuring ensuring competition This This the the level. level. in in at at reflects reflects the view that retail retail by by
market market failures at wholesale wholesale bottlenecks the the the fixing fixing level level where where typically typically occur occur - -
competition competition the the usually follow. retail retail level will will at at - -
approach approach The The market EC EC to 30. 30. of of -ante assessment assessment for regulation the the in in ex ex purposes purposes
electronic electronic communications articulates approach approach the the follows: sector sector this this as as
of of lack lack competition competition principle, principle, effective `In `In at at retail retail level the the may may occur
the the wholesale level identification identification The The of of retail retail market both. both. or or or or a a
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24 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
of of part part the the value (as (as chain) chain) the the of of for for market market ante ante purposes purposes ex ex
of of
analysis analysis not lack does does finding where where there is effective imply, imply, of of a a a
by by regulatory remedies remedies would applied applied competition competition that be be NRA, NRA, to to a a
retail retail Regulatory Regulatory controls controls retail services only only market. market. be be a a can can on on
imposed imposed relevant where where wholesale would would fail achieve achieve to to measures measures
of of objective objective ensuring ensuring effective competition the the retail retail at at Given Given level. level.
the the advances advances achieved thanks competition competition that have been in in to to
Recommendation Recommendation identifies regulation, regulation, this relevant relevant markets only only at at
It It is believed that their the the wholesale leve!. leve!. address address regulation regulation can can a a
of of lack lack effective effective competition wholesale wholesale at at the level, which in is is turn turn
of of identified identified the the market market failures related related retail markets. markets. in in the cause cause
By By intervening only at wholesale wholesale level, level, the the that that NRAs NRAs as as can can ensure
of of subject subject much much value is competition the the chain to to process process as as
thereby thereby possible. possible. delivering users.19 users.19 best best outcomes for end- end- (own (own
emphasis) emphasis)
31. 31. In In
with with the above preference cited cited principle, the Inquiry will have line line for for a a
wholesale wholesale market identifying identifying markets -ante -ante susceptible susceptible regulation regulation at at the level to to ex ex
Authority's Authority's Guidelines Guidelines where where possible. This approach also also reflected the the is is in in that that
specifies specifies
of of the the regulate regulate the the problem' 'need 'need to at at the
potential potential source source as as a a
for for consideration consideration prioritisation. prioritisation.
important important that that However, However, stress retail retail 32. 32. it it is competition competition issues issues cannot to to some some
addressed addressed at necessarily necessarily wholesale those those circumstances the the and and be be level in in retail retail a a
market market focus
far far appropriate. appropriate. addressing Furthermore, Furthermore, issues be be may may the the some some up up
wholesale wholesale value value chain of of require require considerable time time before there period period is is may may a a
impact impact for at at the retail this this level level and be be it it appropriate appropriate to to any any may may reason reason more more
regulate regulate
the the
closer closer order order market market desired desired immediate impact retail retail have to to to in in a a on on
market market outcomes. outcomes.
of of other other regulatory provisions. Recognition Recognition The The 33. 33. of of prioritisation prioritisation the the purpose purpose
for for exercise exercise identify markets market review As As
to to is is market market result, result, process. process. a a a a a
that that already subject
where where to to review review market already regulated regulated is is is process process or or a a a
section section 67 review following following
not not require prioritization. market market will will process, process, a a
' ' 2014 2014 Commission EC EC
Staff Staff Accompanying Accompanying Working Working Document Explanatory Note the the Commission Commission
d document
relevant relevant product and Recommendation Recommendation markets markets thin thin the sery sery electronic electronic communications sector susceptible on on to to ce ce w w
of of accordance accordance Directive ante ante regulation with with 2002/21 in in C C of of and and ex ex Parliament Parliament Council the the European the on on a a
regulatory regulatory framework for electron and services at at networks 19. 19. common common commun ons c c p. p.
. for for
A A Conducting Conducting Market Re iews Guide Guide March (CASA (CASA issued 8 8 ne ne 2010, 4 4 on on p p {
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 25
Question Question
adopted adopted the the above approach the by by In In to to prioritisation your your opinion, opinion, is is : :
for for Authority Authority appropriate future future market reviews? identifying identifying markets pnontised pnontised to to be be in in
supporting supporting evidence Motivate Motivate by providing data, data, and and your your response any any reasons reasons
far far possible possible as as as as
Questionnaire2 Questionnaire2
stakeholders stakeholders proposed to to number the the of of 34. 34. In In
response response some some a a
, ,
Whilst Whilst of of these suggestions principles principles that should guide the the have Inquiry. Inquiry. some some
of of approach approach other factors incorporated incorporated few adopted adopted above, been been the the raised raised in in a a
further further warrant warrant considered considered appropriate discussion. not not and were were some some
Inquiry Inquiry market market review. not not is is The The a a
market market contemplated outlined outlined above, the Inquiry review section not not As As 35. 35. is is in in as as a a
of of 67(4) 67(4)
of of of rather rather identifying identifying markets that the the ECA, but the the list list is is process process a a a a
for for Authority Authority market market prioritise prioritise reviews reviews going forward. may may
result, result, does does Authority regulate regulate markets Inquiry Inquiry not not prescribe the the As As this this to to 36. 36. a a
identified, identified, merely that such markets closer closer scrutiny future future market given given in in are are a a
review review process. process.
addition, addition, this Inquiry intended intended 37. 37. is is In In what what replicate replicate not not the prescribed to to are are
of of market market review including: components components process process a a
market market (a) (a) detailed definition definition exercise; exercise; a a
determination determination of effectiveness of competition (b) (b) the the in in the the relevant a a
market; market;
of of significant significant determination determination market market licensees licensees with with (c) (c) and and a a power; power;
competitive competitive remedies where competition found found (d) (d) is is to to be pro- pro- ineffective. ineffective.
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26 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
Questionnaire Questionnaire Several Several respondents three -criteria put put forward the the the test, test, 39. 39. to to a a
identify identify markets that methodological methodological framework applied to to relevant by by the EC may may
subject subject -ante -ante regulation adopted the the preferred approach Europe, Europe, be be to to to be in in ex ex as as
Authority. Authority. by by the
important important appreciate appreciate the identifying identifying markets EC EC such such is is in in that that not not to to 40. 40. It It is process process
equivalent equivalent prioritisation prioritisation exercise Authority. undertaken undertaken the the being being the the by by to to
recommendation recommendation markets markets that susceptible -ante the the 40 40 Firstly, Firstly, EC EC to to 1 1 are are on on ex ex
market market of of examined examined regulation regulation the the context the European and and is is in in common common
national national regulatory authorities tackle these involves involves directives "NRAs ") ") ( ( to to to
rather rather specific specific markets. As not prioritisation prioritisation exercise but such, such, it it is is a a a a
member member directive directive for specific regulatory action action states. across across
analysis analysis undertaken prior Secondly, Secondly, within this the the by by the EC the the context, context, 40.2. 40.2. to to
of of
particular particular of directive directive that that the needs needs detail such level level NRAs be be to to can can a a
their their the the three -criteria country, country, enabling has has been in in test test met met presume presume own own
without without repeating repeating drawn from them them exercise. This view proceed proceed such is is to to an an
following following quote: quote: the the
Explanatory Explanatory Commission Commission Note Note the the in in analysis analysis conducted by "Given "Given the the
of of retail retail their related for markets markets listed markets markets and wholesale wholesale markets, markets, the the
presumption presumption the the Recommendation, exists that three three criteria the the in in are are a a
reconsider reconsider adopting adopting them them when NRAs NRAs not need met. met. Therefore, do do to to a a
markets. markets. of of listed listed market market address address failure failure In In the the to to in in measure measure one one a a
of of market market analysis analysis according Article the Framework principle, principle, to to 16 16 a a
obligations.'e2 obligations.'e2 regulatory regulatory impose impose withdraw Directive Directive will suffice to to or or
of of namely namely The The Authority incorporated elements of -part the the three the has has test, test, 41. 41. use use
for for that that concentration concentration screening devices identifying markets barriers barriers and and entry entry as as
Commission Commission Staff Working Document (2014 document Commission 298) 298) Explanatory Note Accompanying the the no no
Recommendation Recommendation relevant product service markets with electron communications sector susceptible and and
the the to to c c on on n n
of of of of accordance accordance with Directive Parliament regulation regulation 2002/21 2002/21 EC and the the European the Council in in ante ante ex ex a a on on
ectronic ectronic communications networks framework framework for services; services; and and
regulatory regulatory 11 11 common common p. p. e e
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 27
Authority Authority have have ineffective competition. However, the has has excluded excluded also also may may some some
elements elements
test test appropriate of of useful useful the prioritisation the the not being at at stage, as as or or
and and also incorporated other other factors appropriate appropriate which which the in in South South African are are
context. context. This approach adopted by by the Authority Authority guided guided by the following is is
principles: principles:
appropriate appropriate 41.1. 41.1. it it
is is conduct conduct not not the prioritisation at at in in -depth -depth analysis stage stage to an an
of of market market
Inquiry Inquiry screening screening that precedes the the is is every every market market process process as as a a a a
review review where such detailed
analysis analysis addition, addition, will will be conducted. In In detailed detailed a a
of of dynamic dynamic analysis analysis barriers barriers and and the character character functioning of to to entry and and the
relevant relevant markets, markets, which factors considered the the in in -part -part three three EC EC test, test, are are are are
of of criteria criteria specifically mentioned section 67(4A) the the ECA two two in in of of part part the the as as
market market review process; process;
appropriate appropriate include include 41.2. 41.2. it not is is eliminate eliminate markets at prioritisation the the to to stage stage or or
of of whether particular the the basis competition competition best best addressed by by is is on on a a concern concern
law law -ante regulation. At the the prioritisation there there determination stage stage is is or or ex ex no no
of of whether
what what regulatory exists exists and and not, not, action action be be or or concern concern a a may may
address address required required such such determine determine As As such, not possible to to it it is is to to any any concern.
whether whether appropriate appropriate competition competition
law law is is not not to address such or or concern. concern. a a
Furthermore, Furthermore, there debate the the EC, in in is is regarding regarding the the third even even some some
recognised recognised by by the EC's criterion23, criterion23, expert expert advisors: advisors: as as own own
"(0)ur "(0)ur of of view view Criterion Criterion the the full full (developed (developed in in in the Interim Third Third Report) Report) is
is is that that it almost almost always always possible to advance reasonable for for arguments arguments
of of for for satisfaction satisfaction Criterion Criterion the the Third that that clearly satisfy satisfy markets markets first the the two. two.
For For that it not not it gives rise element element useful. useful. Indeed, appears appears reason, reason, to to an an
of of uncertainty uncertainty appraisal (because (because those the the in in avoid avoid who who wish wish to to process process
of of point point regulation regulation certainly certainly will will the opposite view) view) without without adding argue argue
"24 "24 sufficient sufficient value. value.
prioritisation prioritisation exercise such such 41.3. 41.3. In In undertaken undertaken by by the the being Authority, Authority, as as the the a a one one
consider consider other factors relevant relevant both both it it in is is
worthy worthy of identifying identifying markets to to a a
of of market market review allocation allocation and and the regulatory regulatory This This scarce scarce resources.
policy policy objectives naturally naturally includes the the government government identified identified the the in in as as
This gazette is also available free online at www.gpwonline.co.za
28 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
that that wholesale
Some Some submissions proposed 42. 42. markets markets considered considered be be cannot cannot on on a a
standalone standalone for market review review basis basis and and Authority Authority first regulation regulation unless unless the
demonstrates demonstrates ineffective ineffective that that competition the the downstream is is in in retail retail markets. This
suggests suggests that wholesale markets cannot identified identified be be without without priority priority market as as a a
of of
first first undertaking undertaking market review review
for for There There retail retail markets. basis basis this is is no no a a
principle principle the ECA
does does make and and it it in in market market review logical logical in in nor nor sense process. a a
The The demonstration demonstration of ECA ECA does not require 43. 43. of of competition at at the lack lack retail retail level a a
for for market market review the wholesale basis basis initiating order order regulate regulate at at level level to to in in as as a a a a or or
wholesale wholesale self -evidently markets. markets. This is is of of the the from section section reading reading 67. 67. case case a a
aptly aptly demonstrated However, However, also also it it is is of of regulation regulation termination by by the call call in in rates rates
Authority Authority regulates South South Africa, where the termination termination mobile mobile fixed fixed rates rates line line and and
directly directly without without establishing and and able to to do is is first first that that competition the the in in so so
downstream downstream markets markets ineffective. ineffective. retail retail are are
There There good why economics from from the the 44. 44. this is is perspective. perspective. These are are reasons case case an an
include: include:
44.1. 44.1. Regulators only concerned with the final not not product product retail retail to to are are consumers consumers
concerned concerned competition of intermediate with with also also but but be be services services may may as as
these these affect of of effective effective competition retail retail prices. For instance, the the level level for for
of of
service service the the retail
that that component component does does not necessarily the the overall mean mean a a
competitive competitive if the retail retail price is is wholesale wholesale service purchased retail retail by by all all
providers providers inflated inflated price. Illustrative is is of of the the from MNOs this this at at is is an an response response
of of conduct conduct market market review fixed fixed line line to to their their networks networks despite inputs inputs to a a
their their effectively effectively claiming claiming that markets markets retail retail competitive. competitive. own own are
of of wholesale competition competition most most effective effective 44.2. 44.2. lack the In In level level will at at cases cases a a
directly directly result result in in only only ineffective ineffective competition the the and retail retail level at at it it in is is
exceptional exceptional circumstances that that this this not not the This large large part is is in in is is case. case.
because because the providers of wholesale telecommunications telecommunications services services in in are are
typically typically either either foreclose vertically vertically integrated therefore and and downstream downstream can can
rivals rivals
impact impact their competitiveness through through
refusal refusal supply supply to to or or on on a a
competitive competitive terms. terms.
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 29
Question Question Authority's Authority's with with the to the above issues with Do Do 2: 2: you you agree responses
of of the the the inquiry Authority's Authority's incorporation regard regard to guiding principles the and and
if if of of of the the elements the EC EC test? motivate motivate providing providing not, not, by by your your response some some
comprehensive comprehensive reasoning thereof.
This gazette is also available free online at www.gpwonline.co.za
30 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
IDENTIFICATION IDENTIFICATION OF OF MARKETS MARKETS PRIORITY PRIORITY
Appendix Appendix 45. 45.
of of of outlines outlines markets markets identified the the the full full list Inquiry Inquiry 1 1 part part well as as as
reasoning reasoning the the for for identifying these markets. markets. also also identifies It It market market segments as as
within within each market that that constitute constitute separate markets
investigated investigated and and be be may may may may
in in of of market market review detail detail the the identified A A in in more more markets markets by by summary summary process. process. a a
layer layer presented presented is is table table below reflecting relationship the the the the in in of of market each each to to
above above layers layers and and
diagrammatic diagrammatic Appendix Appendix below below provides the the table. in in version version 1 1 a a
of of this this table.
Table Table of of Summary Summary vertical links them markets markets and and between 1: 1:
Broad Broad market of of from from Downstream Downstream Upstream Upstream
Retail Retail
of of supply supply mobile services Retail Retail
a?
of of supply supply Retail Retail connections connections the the Internet from from fixed to to access access
w
supply supply Retail Retail R4 R4 of of managed managed data network services U1, U1, U2, U3, U3, U4
Wholesale Wholesale
of of Wholesale Wholesale supply mobile mobile termination services W1 W1 U1, U1, U2, U3, U4, U4, U5 U5
. J
of of Wholesale Wholesale supply international international roaming roaming services U1, U1, U2, U3, U4, U4, U5 R1 R1
Wholesale Wholesale supply U1,U2,U3,U4,U5 U1,U2,U3,U4,U5 of of mobile mobile network services R1 R1
of of Wholesale Wholesale supply termination termination services fixed fixed W4 W4 U2, U2, R2 R2 U1, U1, U3, U4
Wholesale Wholesale
of of supply supply origination, origination, fixed fixed call transit transit and and U1, U1, U2, U3, U4 access, access, R2 R2
of of Wholesale Wholesale supply asymmetric asymmetric broadband origination U1, U1, U2, U3, U4 R3 R3
of of Wholesale Wholesale supply W7 W7 Internet connectivity connectivity U1, U1, U2, U3, U4 U4 R3 R3
Upstream Upstream
International International U1 U1 transmission transmission services W, W, All All R4 R4
U2 U2 National National transmission service W, W, All All R4 R4
Metropolitan Metropolitan connectivity U3 U3 W, W, All All R4 R4
services services Fixed Fixed U4 U4 access access W, W, All All R4 R4
Mobile Mobile radio U5 U5 network network services Wl Wl access access -W3 -W3
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 31
Question Question Authority's Authority's 3: 3: with the of of identification identification the markets? Please you you agree agree
for for provide provide reasoning
separate separate each market delete delete from the the to to add add to to propose propose you you or or
list. list.
the the 46. 46. Of Of Table Authority's preliminary identified identified markets markets above, above, the in in that that 1 1 view view is is
following following the the markets markets should prioritised: be be
Wholesale Wholesale 46.1. 46.1. fixed fixed services; access access
46.2. 46.2. National metropolitan metropolitan connectivity; transmission transmission and and and
of of Wholesale Wholesale supply mobile mobile 46.3. 46.3. services services services. network network and and RAN
The The following section for for recommending recommending these for provides provides the motivation markets markets 47. 47.
future future market reviews, reviews, by by factors factors considerations applying applying the the the the and in in set set out out
previous previous section.
The The Authority's 48. 48.
preliminary preliminary view that that wholesale fixed is is services services should should be be access access
prioritised prioritised
for for future market wholesale wholesale fixed fixed review. review. this In In context context refers to to access access
fixed fixed services services wholesale wholesale (upstream (upstream market U4) U4) and of of supply supply access access
asymmetric asymmetric broadband broadband
origination origination (wholesale (wholesale market W6) provided provided in in as as
Appendix Appendix of of Discussion Discussion Document. Document. this this 1 1
49. 49. Fixed of of services services includes the connectivity provision provision mile last last access access fixed fixed in in
networks. networks. This includes: includes:
Wholesale Wholesale 49.1. 49.1. refers refers wholesale that local local to to the services services allow via via access access access
which which defined local local loop, the the
customer's customer's the the connection between is is as as a a
premises premises local local and and the
nearest nearest exchange. exchange. These connections used used are are as as
for for the the provision inputs inputs broadband of of households households internet internet and and small to to access access
businesses businesses (referred to to the the market). mass mass as as
quality quality Wholesale Wholesale refers refers 49.2. 49.2. high wholesale wholesale services that allow the the to to access access
terminating terminating of leased via via the
segments segments These lines. lines. used used access access are are as as
inputs inputs into downstream retail retail services services such such leased line Internet Access, as as
mobile mobile MDNS MDNS well well services services which require backhaul services from their their as as as as
their their network. network. RAN RAN to to core core
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32 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
of of asymmetric asymmetric broadband origination The The downstream wholesale supply fixed fixed 50. 50. via via
technologies technologies allows interconnection between wholesale provider the the and access access
customer(s). customer(s). market market This This bitstream bitstream services provided includes includes by by the its its any any
wholesale wholesale provider of of asymmetric asymmetric broadband broadband origination. This service used used is is as as
for for input input of of provision provision broadband internet market. the the the to to an an access access mass mass
explained explained 51. 51. this this For For section, wholesale fixed services satisfies the in in reasons reasons access
for for approach approach factors factors identified market market market market prioritisation, the the from both both in in a a
perspective perspective for for government structure structure terms of importance policy policy well well in in as as as as
objectives objectives and materiality, However, action regulatory regulatory at at the level level access access any any may may
for for implement implement take take time results, results, and and yield to to appropriate appropriate and and this to to it it is reason reason
simultaneously simultaneously market review review the immediate for for downstream downstream Internet services
of of given given prioritisation the the data government. government.
of of Structural Structural likelihood likelihood of features features market the the and and competition competition concerns concerns
of of last last 52. 52. -market -market broadband The The features for mile mile both both leased lined and access access mass mass
services services of of indicator indicator for for competition strong strong provide provide this this the the likelihood in in concerns concerns a a
establishing establishing broad broad market. Barriers comprehensive comprehensive last mile mile high to to a a presence presence are
concentrated concentrated consequently, consequently, the market Telkom, Telkom, the and and is is incumbent incumbent with with fixed line line
operator, operator, which continues largest fixed fixed with with the be be most most pervasive firm firm line to to
surprising surprising that network. network. not not also also It It is it it is which which has been highlighted by area area an an
respondents respondents Questionnaire candidate candidate markets for the the to to prioritisation. prioritisation. as as
concentration concentration Market Market shares and and
concentrated, concentrated, The The last last mile with with 53. 53. is is largest largest provider Telkom Telkom portion portion the access access as as
of of wholesale of of This This fixed fixed last mile mile in in is is respect respect technologies used used access access access. access.
wholesale wholesale market market the the and leased by by line line mass mass access. access.
mile mile for for Last Last market market broadband. Asymmetric Asymmetric broadband broadband Internet 54. 54. access access mass mass
accessed accessed through various technologies, including fibre be be fixed fixed and and
copper, copper, can can - -
technology technology clear clear currently wireless. wireless. that that (DSL) the the main fixed is is It It is is copper copper access access
that that for for fibre fibre broadband, broadband, increasing used used but but its its is is of of connections. connections. This share share was was
demonstrated demonstrated Vodacom. data data provided by both and and by by This This information Telkom Telkom is is
replicated replicated below. below.
This gazette is also available free online at www.gpwonline.co.za 33
occurs Vodacom but less revenue South to copper) as provide DSL is a future, Authority, owns respect of which used 446 directly connections), for Telkom's in foreseeable Africa only that accounted access No. 41 Connect, (i.e. (excluding services the by in network operator can position provided to subscriptions. to South According ISPs connecting of IP it its telecommunications the revenue i.e. 5% only significant (called in access Competing data in above; usage fixed last mile the case 2016.
The of by networks. fee Internet (less than with to last mile is DSL wholesale 80% figure consumers broadband provider Telkom a the wholesale in connections holds Africa Africa small subscribers for remain the fixed connectivity accounted It As line other South is in of South market. to of a FTTB) fixed `other' W6) to provider 6 FEBRUARIE 2018 6 FEBRUARIE fixed charged services 1 of any 20% likely broadband in 94 market in share of unbundling DSL or under mass allow p of operator 2017 form is FTTH largest provider are growing. access which declining 2016, wholesale the not lines).2
falls submission
predominant they fixed
for around (including does
to fibre last mile the for wireless 7 7 DSL, internet 7 7 - broadband incumbent accounted which STAATSKOERANT, STAATSKOERANT, is of leased shows is that its and and Economics local loop 17% under Telkom the only
through
despite 1 1 shows copper connectivity for This gazette is also available free online at www.gpwonline.co.za FTTP Fixed -based no than from is The this share network, included Frontier provide Telkom is it the Africa, there 55.1. 55.2. 55.3. both DSL The graph Source 55. 56. As 57.
34 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
network network the the main DSL DSL and and this is is technology technology market market used used by access access mass mass
follows follows that the services it it for for segment segment highly consumers, consumers, market this this is is access access
concentrated. concentrated.
of of represents represents increasing increasing Fibre Fibre small small but 58. 58. share share broadband Telkom is is a a access. access.
progressively progressively fibre fibre legacy legacy network replacing replacing has has with with and and its its there there been been copper copper
recent recent entry fibre network by by providers. providers. new new
of of fibre fibre network operators Many Many 58.1. 58.1. operate operate basis basis which access access open open on on an an
ISPs ISPs
intemet intemet that that services services able able retail retail fixed line to to of of means means over over are are range range
fibre fibre networks networks operating wholesale wholesale at at the level. However, the entrants entrants
connectivity connectivity providing providing national national last last mile mile do do
operate operate not not basis instead and and on on a a
certain certain tend tend where where target target suburbs suburbs demand demand likely likely to to is is justify justify the the to to areas areas or
These These out out roll roll be
wealthier wealthier density density cost. cost. that also high high tend tend have have to to areas areas a a
of of Submissions Submissions (like (like multi -dwelling units and office parks). from from users users
licensees licensees confirmed fibre showing showing that point, point, this this of of infrastructure infrastructure the the
Telkom Telkom /Openserve
is is in in significantly significantly higher number of present present than than areas areas a a
the the second -largest fibre network.
significant significant confirms confirms 58.2. 58.2. Public data / / market market of Telkom Openserve Openserve position position the the in in
Africa's Africa's fibre fibre network rollout. South South
of of 58.3. 58.3. mid mid
/Openserve /Openserve As As -2016, -2016, Telkom passed had had 503 and 81 81 homes homes more more
than than 850 gated communities. communities.
58.4. 58.4. of of contrast, contrast, -2016, -2016, Vodacom had mid mid In In 725 725 homes passed passed 25 25 and 190 as as
homes.26 homes.26 Vumatel Vumatel estates, estates, 000 passed passed and and had 33 33
Africa Africa Analysis estimated 58.5. 58.5. number number of homes that that the the total passed by by FTTH
networks networks 000.27 000.27 of of approximately March March 2016 196 196 as as was
of of these these 58.6. 58.6. the On On numbers, numbers, Telkom /Openserve's share total total homes basis basis of of
of of significantly significantly than than double Vodacom that that Vumatel. The latter more more was was or or
Vumatel Vumatel purchased -2016 -2016 have have since two two mid mid ( ( Fibrehoods Fibrehoods towards the the grown grown
of of 2016) 2016) end end / / Telkom Telkom Openserve Openserve significantly. significantly. and and has also By March grown grown
/ / Telkom Telkom Openserve Openserve 2017, 2017, passed passed 219 825 homes (almost tripling the the had had
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 35
September September figure) figure) 2016 2016 and total.28 total.28 By 2.2 2.2 million in in premises premises 2017, 2017, over over
Telkom Telkom /Openserve 2.4 2.4 premises million million passed.29 had had to to total total over over grown grown
reasonable reasonable conclude this this basis, basis, 59. 59. On is is for for to to that Telkom Openserve Openserve accounts / / it it a a
significant significant of proportion proportion confirmed homes homes passed, total total this this and and by was was
submissions submissions received received from licensees.
fixed- fixed- wireless In In number number of respect respect of there there providers. Most notably, 60. 60. access, access, are a a
Telecom Telecom (formerly Neotel) Liquid Liquid operates operates wireless networks networks through fixed fixed access access
number number of CDMA, CDMA, LTE and WiMax technologies in in metro metro Telkom also also a a areas. areas.
provides provides fixed- wireless solutions through wireless -A -A solution. Fixed LTE LTE its its access access
wireless wireless typically typically networks networks ADSL ADSL replacement technologies access access seen seen are are as as
Whether Whether fixed fixed achieve achieve high broadband speeds. and and in in not not some some cases can can or or
wireless wireless
for for market market question question market should should included the the relevant review, review, be be is is in in a a a a
does does change change but but this of of -wireless -wireless the the prioritisation the the broad market. Fixed Fixed not not is is
significant significant technology not not DSL DSL and unlikely constrain the relative relative to to to is is access access a a
that that strong strong position especially Telkom Telkom has has fixed last mile in in that that given given access access
likely likely Telkom Telkom the the is is most most wireless provider largest largest fixed- too. too. access access
line line last Leased Leased mite mite the the As As 61 61 incumbent incumbent provider of fixed fixed line line access. access.
telecommunications telecommunications services largest largest South South Africa, in in of of Telkom Telkom also the provider is is
the the only ubiquitous South South Africa leased leased lines services and and in in operator operator with with access access a a
network. network.
incumbent incumbent widely widely accepted that ability the the 62. 62. to to is is It It operator's operator's replicate replicate last last mile an an
Whilst Whilst there generally generally network network might might where not not feasible. fixed fixed is is this this be be is is areas areas
largely largely in in
dense dense metro generally possible possible this this the the possible is is
not not do do to to areas areas so so ------
national national scale.
order order provider needs supply supply last last mile to to In In connect connect to to access, access, on on a a a a
The The end end its its customers customers of wired wired last associated network. network. creation to to mile is is access access
significant significant investment requirements. The with with highly local high high of of costs costs access access
themselves themselves street street include include laying ducts the the local and buildings, the wires in in areas areas
cabinets, cabinets, well well and and local street street equipment exchanges, exchanges, including relevant all all as as as as
of of recovered recovered these these costs Many Many sunk, and entrant entrant cannot cannot if decides decides to to be be are are an an
of of There There furthermore significant economies density that exit. exit. providers providers such such are are
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36 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
sufficient sufficient have have to to
justify justify customer customer the the base base to to secure secure investment investment last last in in per per area area a a
mile mile access. access.
This This position position 63. 63. is is strongly strongly supported supported the the EC's 2014 in in recommendations recommendations of markets
subject subject to to -ante -ante regulation identify that there high high and transitory transitory barriers barriers ex ex are are non- non-
specifically specifically replicating replicating WLA. The The EC EC to to highlights highlights that entrants would would take
considerable considerable
incur incur time time sunk and and high order order replicate replicate the costs costs to to in in necessary necessary
infrastructure. infrastructure. following: following: this this regard the states the EC EC In In
of of "ln "ln large majority Member Member the the States, States, market market characterised characterised the the WLA is by by
of of existence existence only infrastructure the the of of local local capable capable offering offering one one access access
products products national national sunk the the high scale. scale. Given and and needed costs costs the the time on on a a
for for
potential potential entrant replicate replicate to to of of any any infrastructure infrastructure ubiquitous ubiquitous such such the the a a
network, network, the the entry entry barriers market should this this be be in in considered considered access access be be to to
transitory!'3° transitory!'3° and and high high non- non-
small small number "In "In addition, given the of of and and limited geographic often often reach
competitors competitors operating their alternative alternative infrastructure it it that that is is unlikely, unlikely, own own
without without continued regulatory intervention, intervention, competitive competitive dynamics the the in in this
market market significantly will will change national national foreseeable foreseeable scale scale
the the on on over over a a
"31 "31 future future
The The above quoted 64. 64.
wholesale wholesale view view echoed echoed with respect lease lease line line to to is is The The access. access.
further further states: states: EC EC
that that former incumbent only only "Given "Given the the usually usually has ubiquitous ubiquitous access access a a
network, network,
entry entry barriers this this market remain in in the the and and -transitory -transitory high high also non non
light light in in
of of for for needed needed investments investments and the the time duplicating duplicating such such an an
Absent Absent infrastructure. infrastructure. regulation alternative alternative this this market, in in operators operators would
not not incumbent's incumbent's duplicate duplicate be be able the the to to retail retail it it might offer offer at level, level, have have as as
offer offer resort resort either either expensive expensive solution to to to product product which which does more more a a or or a a
not not satisfy satisfy -quality requested." 2 2 the the high rgi a 3 3 ll lS = rtt s (W, N m Ñ ffl. Ó á 01 3 Ñ cl _ a 17, O. .c W 01 §r W IQ _ N CI Ó C N 63 Ñ .... W 1 m O 0, 33 3 a< v cei < ns C N^ m .. > W =ga _. á Q G ñ _. O 3 0, 8 3xcó 3s 3m3 C1). E 3 I R- óW ?^ 3 f, 3 m(Al a gTj 8 4. U1 m Ñ 0, á 01ao z=0, Á ñ?3m p.3 Al
This gazette is also available free online at www.gpwonline.co.za 37
allow line network by are the are the duplicating broad mile could such wayleave access
446 q access ó to there fixed access or last that Telkom. Telkom responded provide to controls fixed No. 41 access alternative of unwillingness fact unlikely infrastructure of controlling majority passive review. the to to by Telkom last mile identified. provider order that works. serviced issues: whereby: highly and lay the in access of licensees markets last to mile in the high cost bottlenecks to authorities' and controls civil infrastructure following scale passive respect alternative already viable been of
received Telkom's network, approve to terms access the significant Telkom have Telkom not in those grant within the period of competition 37 in submissions any is position to some bafflers replicate access Africa. considerations to the fixed access it than as referred where completed that that to to local a areas of concerns wholesale obtaining other 6 FEBRUARIE 2018 6 FEBRUARIE or South refer 1 national agree unlikely regulatory Telkom's views ducts and poles; context to infrastructure, provides; disruptions have the same licensees long lead times efficient to the Vodacom36 in be the Vodacom34 as in financial infrastructure and competing competition substitutes licensees in could reflected a the given by such it is and in it position and to that infrastructure supported services in relevant not investment practical road infrastructure, infrastructure and this and applications, STAATSKOERANT, STAATSKOERANT, inability of means and and is These also a Telkom's close to economic develop multiple of infrastructure, passive exist. access is MTN33 MTN35 This gazette is also available free online at www.gpwonline.co.za competitors is is that it addition, likelihood This This The Authority. coverage mile an no to Given likely 65.1. 65.2. 66.1. 66.2. 68.1. 68.2, This view The last In The 67. 66. 68. 65.
38 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
of of of of inefficient inefficient duplication fixed fixed 68.3. 68.3. The risk infrastructure infrastructure through access access
other other investments investments made licensees licensees Telkom, potential potential future by by than in in a a
wherein wherein competitive passive passive infrastructure possible; possible; to to is is access access
that that licensee licensee 68.4. 68.4. The low likelihood other other Telkom would the the than than have have any any
economic economic financial the the investments make make required to to to resources resources or or
duplicate duplicate existing fixed fixed infrastructure; and and access access
of of The The 68.5. 68.5. local unbundling lack lack of of of Telkom's Telkom's regulation regulation loop loop and the lack lack
wholesale wholesale fixed fixed services by by the the Authority. access access
Importance Importance
of of fixed fixed wholesale wholesale services services access access
Wholesale Wholesale fixed 69. 69.
services services forms
important important of of access access input input into into range range an an a a
downstream downstream electronic communications. communications. requirement requirement is is It It for for the provision of a a
wholesale wholesale services, including
wholesale wholesale mobile mobile network of of services services and range range a a
wholesale wholesale fixed fixed services which for for ultimately ultimately providing fixed voice, used used internet internet are are
services services final final MDNS MDNS and and access access customers. customers. to to
Access Access services 70. 70. for for important important input operators, operators, enabling them to to connect connect are are an an
their their end end
their their customers customers networks. networks. shown shown As As to to the the preceding section, ISPs in in are are
Telkom Telkom for reliant reliant
of of ADSL the the provision well lease lease While on on line as as access. access. as as
there there fibre fibre where where is is
for for out out last last mile being being rolled
are are areas this is is access, access, more more on on a a
does does match the limited limited basis and and
not not density density and and Telkom's Telkom's of of coverage coverage access access
network. network.
Access Access services services 71. 71. for for constitute constitute also also major example, example, Vodacom cost cost operators. For For a a
estimates estimates that the wholesale bitstream bitstream (which wholesale wholesale cost cost corresponds to to
market market
W6) W6) contributes contributes of of of of the the price price Internet 75% 75% retail retail access.38 access.38 average average on on In In
terms terms of leased lines, lines, assessments assessments South South Africa's competition by by authorities authorities put put
of of the the of of cost cost the region 50% 50% in in of of the the final to to 65% relative to to access access cost cost the the retail
service. service.
important important 72. 72. Fixed is for for of of the the provision not not only fixed access access services, but line line mobile mobile
services services too, too, for for services services required the the physical access access backhaul links links used as as are are
This gazette is also available free online at www.gpwonline.co.za
STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 39
services services MNOs. MNOs. by by
of of Therefore, Therefore, for the the provision also also required is is LTE LTE access access as as
services services well well 5G 5G going going forward. as as
services services As As wholesale wide wide fixed fixed 73. 73. is is of of electronic input input into into access access range range a a an an
communications communications services services significant products products (and (and input), and and by by is is cost cost prioritising prioritising
market market this this broad
for for review review there market market potential have have positive and the the to to is is a a a
number number of significant significant impact markets. markets. This This includes provision provision the the of fixed across across a a
broadband broadband
for for services, services, which which fixed services critical critical is is The The input. input. access access a a
development development
of of of of itself important Africa Africa fixed fixed broadband South South and and is is in in in in for for a a
number number of reasons: reasons:
important important Broadband Broadband 73.1. 73.1. is is enabler enabler of economic activity and and social an an
development development of development. development. broadband broadband For For this the fixed is is reason, reason,
further further government government regarded regarded key key objective. This discussed is is the the next next in in as as a a
Appendix Appendix section section 2. 2. and and
broadband broadband data consumption similar 73.2. 73.2. South Africa, Fixed Fixed in in the the world, to to is is
estimates estimates that between 2015 worldwide fixed increasing. increasing. 2020 2020 Cisco Cisco data - -
traffic traffic increase increase is is %.4o %.4o of of expected expected compound annual growth at at rate 35 35 to to a a
importance, importance, South Africa's broadband 73.3. 73.3. Despite its its fixed fixed low low and lags is is usage usage
significantly significantly South South behind behind mobile Africa. in in usage usage
73.4. 73.4. 16% 16% In In of of Africans Africans than than South South reported have 2016, 2016, less the to to to to access access
Internet Internet through broadband fixed fixed internet internet at at café café home, home, work, at at or or or or an an
institution.41 institution.41
educational educational Currently, Currently, broadband South South Africa has has in in usage usage
of of primarily primarily driven driven mobile broadband. Just South South been been 50% by by Africans Africans over over
had had 2016,A2 2016,A2 Internet Internet through mobile mobile phone used used the the in in which which access access or a a
vastly vastly fixed line line exceeds exceeds access. access.
internet internet extremely rural rural 73.5. 73.5. Fixed in in of of Specifically, Specifically, 2% 2% low. low. is is access access areas areas
households households Internet Internet have have the the home, 3.9% rural rural in in work work at at to to at areas areas access 7- = C a @ 3' = cr
This gazette is also available free online at www.gpwonline.co.za
40 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
at at Internet cafes educational facilities.° and and 3.2%
comparison comparison 38.3% In In or or 3 3
of of households households Internet Internet through rural rural could the as as mobile mobile phones. access access
functionality functionality broadband broadband offers Fixed Fixed 73.6. 73.6. quality quality of services services that mobile and and
broadband broadband services cannot cannot achieve therefore and and its its development development is is
for for important important South South Africa benefit from applications applications heavy heavy the the data to to more more
that that become become will will prevalent prevalent going forward. more more
The The prioritisation 74. 74. of of wholesale services services would fixed fixed also also contribute contribute towards access access
the the broader government policy policy objectives of promoting broadband South South in in access access
for for Africa, Africa,
which which wholesale services critical critical fixed fixed is is input. input. access access a a
of of Telecommunications Telecommunications The The Minister 75. 75.
Postal Postal Services issued policy and and directive directive a a
of of relating relating the prioritisation broadband broadband to to for for market market markets markets review review the the to to a a
Authority Authority in in 2016.46 2016.46 This directive emphasises the March March for for effective effective need need
competition competition broadband markets, drawing in in the the NDP and SA Connect. More More on on
specifically: specifically:
The The NDP 75.1. 75.1. (201 (201
of of broadband the the cost cost identifying identifying cited cited high high 3) 3) is is Internet Internet as as as as
"major "major hindrance hindrance scientific scientific "47 "47 technological technological and and to to amongst amongst other a, a, progress, progress,
The The things. things. further further achieve achieve universal cited cited NDP NDP to to is is broadband, broadband, to to access access
making making converged services accessible
Africa's Africa's comparable comparable South South cost cost at at to a a
peers.48 peers.48
The The linkages between high high 75.2. 75.2. broadband broadband prices and and Africa's Africa's South South
competitiveness competitiveness
economic economic growth highlighted highlighted and and in in Connect Connect the the SA are are
Policy.49 Policy.49
The The South African 76. 76.
government government policies policies reflect keen keen focus broadband on on a a
connectivity connectivity (both (both fixed and and mobile) mobile) South South Africa. Importantly, in in government government these these
specifically specifically identified policies policies have of of broadband broadband status status the the fixed fixed
poor poor access. access.
General General Household Survey 2016 Available Stats Stats SA 2017 51 51
p p
44 44 General General Household Survey 2016 Available Stats Stats SA. SA. 2017. 51. 51.
p. p.
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as as Appendix Appendix 2 provides government policy objectives in in
of of electronic electronic communications respect respect
Telecommunications Telecommunications -4 -4 4 4 of of Department Department 2016 Government Gazette and and Postal Services. March 2016 39781 39781 No. No.
lbld lbld at 1.1.1, 1.1.1, 11 11 para. para. pg pg
0° 0° lbld lbld at at 2, 2, 11 11
1 1 1 pg. pg. pars pars
4 4 lbld lbld at at to to 1.1.4, 3 3 11 1 1 1 pars pars pg pg
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 41
Connect,50 Connect,50 According According SA SA fixed fixed broadband growth sluggish due costs costs to to high is is to to
and and being is is superseded superseded Connect states by by mobile broadband growth. SA that: that:
of of slow slow deployment fixed fixed broadband services and its relatively "The "The (ADSL). (ADSL).
last last broadband broadband costs costs meant that mobile became high high the the five rapidly rapidly over over years years
primary primary form broadband broadband the the of of rather rather complementary complementary providing providing than than access: access: a a
it it fixed fixed has has service service done done to to services services mature mature economies. Despite this this take- in in as as
off off mobile mobile broadband, South Africa's broadband penetration remains in in poor poor
that that of of other other lower -middle -middle income countries. South Africa has lost its its to to status status
leader' leader' 'continental 'continental last last and and broadband broadband and decades decades has the the in in Internet, as as two two
"51 "51 Africa's Africa's steady South South decline global global ICT indices (own (own emphasis) seen seen on on
ADSL ADSL networks networks specifically, SA Connect observes respect respect only only With With 77. 77. to to is is access access
other other Telkom Telkom for for wholesale competition Internet Internet provided provided by with with limited by by scope scope
service service providers. that that of of Connect Connect relatively relatively small number notes notes Telkom SA SA has a a
ADSL ADSL subscribers that other intemet providers and and their their service service limited limited in in are are
product product point point of interconnection service service offerings and and given given and and the the cost cost the the to to
network.52 network.52
Telkom Telkom wireless wireless other other only available limited limited Fixed Fixed hand the the is is in in on on
limited limited FTTP FTTP costly. costly. and and and is is 53 53 very very areas areas
DIPS DIPS further further the the White identifies worth worth noting noting that last 78. 78. It It is Paper Paper infrastructure mile mile
provision.54 provision.54 Apart Apart largest largest bottleneck from from broadband broadband service the the the DTPS in in as as
directive directive the the of of Authority Authority prioritisation prioritisation regarding regarding broadband markets, markets, the the the to to
Competition Competition Commission of South Africa recently recently initiated has has data data services a a
market market enquiry, suggesting that interest broadband broadband services in in exists exists within South South
Africa's Africa's regulatory regulatory framework national national policy well well its its as as as as
Conclusion Conclusion
wholesale wholesale The The Authority's preliminary view that that fixed which refers to to 79. 79. is is access, access,
fixed fixed (upstream (upstream of of services services wholesale supply market market U4) U4) and access access
origination origination asymmetric asymmetric broadband (wholesale (wholesale market market W6) W6) should prioritised prioritised be be
for for of of market market review. review review This This the basis basis is is of of of of the the structural features the on on a a a a
which which indicate concentrated market market market barriers with with high and -transitory -transitory
a a - - non non
55 55 of of Department Department Communications. 2013. South African Connect: Creating Opportunities, Ensuring Inclusion South South
Africa's Africa's November November 2013 Broadband Broadband Policy 20 20
- -
St St /bid /bid at at pg.3
52 52 ibld ibld at at pg.29
53 53 ibid ibid at at pg.29
5' 5' Department Department of Telecommunications Postal Postal Services. 2016. National Integrated and and ICT
Policy Policy White Paper 28 28 - -
September September 2016, 2016, 69 69 p. p.
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42 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
consideration consideration of of of well well entry entry importance importance terms of the the the markets to to in in as as as a a - -
materiality materiality policy objectives. and and government government
of of services services wholesale supply the the fixed and and 80. 80. Both asymmetric asymmetric broadband access access
of of asymmetric asymmetric origination origination markets supply supply prioritised, prioritised, broadband the the with with are are
origination origination situated down down the value chain from fixed services. access access
services, services, With With fixed locally, locally, 81. 81. which which that traffic is is access access access occurs means means
customer customer closer closer the the handed handed premises compared to to bitstream bitstream services that to to over over
of of of of asymmetric asymmetric the the wholesale supply broadband broadband origination. form form part In In contrast, contrast,
wholesale wholesale supply supply of asymmetric broadband with with the origination, provided is is access access
higher higher central central point at at the the network. and and in in more more a a
Accessing Accessing the the the premises 82. 82. for for customer customer closer provider provider allows allows to to have control to to a a
larger larger of the segment segment value chain, allowing provide asymmetric to to it it over over a a
broadband broadband Internet broadband differentiated However, However, basis. basis. access access on on a a more more
accessing accessing network at central location option the the preferred still still be be the the more more may a a
of of for for number number operators operators intermediate full and and step step given that serves serves access access as as an a a
available. available. local local loop is is not not the the to to
Access Access passive passive infrastructure, poles, poles, such such and and 83. 83. to to not not included ducts ducts the the is is in in as as
markets markets identified. These form facilities that broad broad of of dealt dealt part part under with with are are
chapter chapter of of extent extent currently ineffective the the ECA and the such regulations to to 8 8 are are
best best addressed through this this is is
of of chapter chapter then then the the regulations. review review be be 8 8 It It may may a a
that that the finds, finds, that that of Authority Authority following following market form form review, review, the the case case some a a
regulatory regulatory intervention order order required required in in of of expand expand the to to the Facilities is is scope scope
envisaged envisaged Leasing Leasing Regulations55 beyond what in in is is chapter chapter However, However, such 8. 8. a a
determined determined finding finding only be be of of market market review. part part can can as as a a
The The wholesale markets markets identified have been chosen level level high 84. 84. that that at at is is enough a a
supply supply that regulatory warranted, warranted, would impact intervention, intervention, if the the chain any any up up as as
of of the the chain possible, possible, quickly much much possible. However, identifying passive as as as as as
infrastructure infrastructure for for significant significant market market unlikely review review the the have have in in is is impact impact to to any any as as a a
for for market market of of number number providers immediate future, if if at the the all. all. in in a a
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Q o 5 Q ca
Authority's Authority's The The preliminary view that 85. 85. is is national national upstream upstream markets incorporating
transmission transmission services services (upstream (upstream connectivity connectivity metropolitan metropolitan market market U2) U2) and
(upstream (upstream market U3) should prioritised. prioritised. be be
National National transmission services include 86. 86. of of the the wholesale provision national national leased
that that services services -bandwidth connectivity provide provide high line line between between distant locations
different different services services cities) cities) within South Africa. (e.g. (e.g. These These used used by ISPs and are are
MNOs MNOs build their their networks networks where these lines lines to to providers' providers' connect connect the the PoPs. PoPs. core core
aggregate aggregate The The traffic traffic from the the lines lines all all network network sites sites connecting into the and and core core
transmits transmits between between such sites. sites. it it
Metropolitan Metropolitan 87. 87. connectivity connectivity includes wholesale provision of connectivity between the the
within within local local sites -density -density metropolitan metropolitan high high -urban urban urban and points sub sub and areas areas
of of which which located -networks -networks within within high- bandwidth ring ring surrounding surrounding presence, presence, are
each each metropolitan metropolitan South South Africa. in in area area
88. 88. These These upstream upstream markets satisfy factors identified approach market the the the the in in for for
prioritisation, prioritisation, from from
market market structure perspective of well well both both terms terms in in as as as a a
for for importance importance government government policy policy objectives materiality. materiality. and and
Structural Structural of of likelihood likelihood of features features market market the the and competition competition concerns concerns
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44 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
provides provides estimated Table Table of below below indicative market shares based based the length 90. 90. 2 2 on on
of of fibre fibre publicly publicly networks networks the main using the the national providers, providers, determined
- -
available available information. information.
fibre fibre infrastructure Estimated Estimated national market shares Table Table 2: 2:
National National Fibre Fibre
Competitor Competitor
Distance Distance Share Share (km) (km)
73% 73% Telkom Telkom 75 75 500
Link Link Africa 0%
- -
Broadband Broadband Infraco 923 14% 14% 14 14
Liquid Liquid Telecom 000 3% 3% 3 3
Dark Dark Fibre Africa 057 057 1% 1% 1 1
000 000 MTN MTN 3% 3% 3 3
Vodacom Vodacom 000 000 3% 3% 3 3
2% 2% FibreCo FibreCo 539 2 2
Total Total 019 019 100% 103 103
2017 2017 Source: Source: interim Africa
(ii) (ii)
results results Link confirms national network; Telkom Telkom
(i) (i)
no no ; ;
- -
- -
of of
-A -A of of of of Neotel Neotel Broadband Broadband Infraco Neotel optimal 2017 2017 integrated report, 4 4 decade Fibre Fibre fibre (iii) (iii) 17 (iv) (iv)
pg. pg. - - - - pg pg
of of network network 48 Dark Dark Fibre Africa Remgro's rollout55; rollout55;
-assumed -assumed 2017 2017 Annual Report MTN MTN (vi) (vi) (see (v) (v)
pg. pg. - - ; ;
text); text); (vii) (vii) assumed assumed explanation explanation main explanation explanation in main text); FibreCo profile Vodacom Vodacom (see (see (viii) (viii) in in company company - -
FibreCo's FibreCo's national fibre fibre 2014.57. 2014.57.
of of length length estimated Note: Note: lines lines using fibre from The The were were a a coverage map
The The indicative share estimates the the table above 91. 91. in in assumption assumption that rely rely the the on on
of of fibre fibre networks lengths lengths of Vodacom the the national the and and MTN that that same same are are as as
of of /Liquid /Liquid Telecom, the three three which which Neotel Neotel due NLD party party all all build, build, to. to. to to co- co- are are
assumption assumption -estimated if if this has has Even Even of of Telkom's Telkom's share total total national fibre, over over
Telkom Telkom likely likely times participant; still still to to be be is is larger larger than other the the many many any any on on
larger larger that of estimates estimates above, above, Telkom's share than Broadband Infraco times times is is 5
(BBI), (BBI), the second largest at at approximately 14 14 %. %.
of of The The following further assumptions estimate indicative shares made made 92. 92. be be to to may may
metropolitan metropolitan that Telkom fibre fibre networks too These estimates indicate and and access access
significantly significantly larger likely likely to also also be be is is fibre fibre than metropolitan metropolitan and and in in access access any
other other participant participant This confirmed confirmed by received is is confidential confidential information by the Authority. Authority.
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 45
fibre fibre owned by national national All All the fibre, 93. 93. it is is of of not not involved the the provision BBI BBI is is in in as as
metropolitan metropolitan fibre.58 fibre.58
Telecom Telecom (formerly assumed assumed known known Neotel) Liquid Liquid 10,000km 94. 94. is is of of metro metro to to as as own own
fibre.5s fibre.5s
fibre fibre According According 2014 information, FibreCo's national national 95. 95. of of consists consists routes routes between to to
Cape Cape well well Bloemfontein Town, Town, Bloemfontein, Johannesburg and Durban. As As as as
FibreCo's FibreCo's East East and and London.ó0 London.ó0 The The difference total total network 4000km.61 4000km.61 is is over over
between between total and national this this the distance estimated the the table above in in is is
assumed assumed metropolitan metropolitan network the the to to (approximately (approximately 1,400km). be be
Africa's Africa's "DFA "DFA largely metropolitan, fibre fibre Dark Dark Fibre its its national ") ") is is 96. 96. ( ( fibre fibre with with
consisting consisting of of only only Johannesburg /Pretoria the the route between Durban and via via
Richards Richards Bay Bay (the respectively respectively splits splits connect connect Johannesburg route route and and Pretoria to to
around around approximately This This route estimated estimated Ermelo). Ermelo). is is length. length. be be 1,057 1,057 to to km km in in It It
8,800km)B2 8,800km)B2 that that fibre fibre (approximately assumed assumed the remaining relates relates is is to to DFA's
metropolitan metropolitan network.
km63 km63 of of Telkom's Telkom's estimated fibre fibre distance total total 97. 97. assumed assumed split split 151,000 151,000 to to be be is is
metropolitan metropolitan fibre last equally equally between national fibre, the the hand, and and and on on one
the the other. mile mile access access on on
for for Vodacom, Vodacom, and Link Link Africa, MTN 98. 98. Data available available publicly. publicly. Based not not are are on on
estimates estimates contained confidential confidential submissions in in of of made made Authority, the the to to none none
of of three three built built fibre network comparable these these has has size size in in that that to to a a
Telkom Telkom /Openserve. /Openserve.
the the therefore /Openserve Based Based above, 99. 99. it it that that Telkom Telkom concluded concluded by by be be is is may may on on
far far Africa's Africa's metropolitan largest largest participant the the South in in fibre fibre networks. and and access access
of of Whilst Whilst this this exercise does enable breakdown relative relative metropolitan metropolitan not not the the a a
that that however infrastructure infrastructure infrastructure, infrastructure, local local it it is is apparent apparent this this is is versus versus access access
divided divided remain concentrated concentrated market. market. will will it it a a X SU o c o x co
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46 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
100.Combined 100.Combined with Telkom large large position national national its its in in /Openserve /Openserve fibre, fibre, overall, is is
estimated estimated of of approximately approximately thirds thirds control control the South South Africa. total total two two to to fibre fibre in in
largely largely 101.This 101.This also also of of reflects reflects the finding DTPS DTPS 2016 where states: states: the the in in it
of of universal universal critical critical "Backbone "Backbone infrastructure is broadband broadband services segment segment a a
last last it it players enables enables infrastructure provision. Although multiple mile mile as as are are
rolling rolling incumbent incumbent fixed out out national long- distance fibre; fibre; line the the operator operator owns owns
of of bulk bulk (approximately the the 86 %) %) infrastructure infrastructure fibre fibre the the The The in in country. country.
incumbent incumbent virtually operator operator network that connects entire entire the the the the cities, cities, owns owns
of of and and prospect replicating there there towns towns and villages is is other other operator any any no no
infrastructure.' infrastructure.' of of this this extent extent
infrastructure: infrastructure: "Metro "Metro
regional regional network comprising comprising metro metro network is The The a a a a
of of number number interconnected aggregation/switching municipal municipal Most Most centres. centres.
primarily primarily considerable considerable network infrastructure owned have have by by the the areas areas core core
incumbent incumbent fixed line line few private municipalities municipalities and operator. operator. Recently, a a
entities entities have have invest invest and started started metro metro fibre networks to to in in meet meet government to to
"65 "65 neighbourhood neighbourhood needs. needs.
102.The 102.The concentrated fact fact that that market market does reflect the the the the of of infrastructure provision provision is is
capital capital intensive requires requires also also requires economies substantial substantial investment. and and It It a a
of of order order for scale scale in in the the investment economically viable. to to be Vodacom Vodacom
summarises summarises the the barriers expansion) expansion) entry entry infrastructure (and (and the upstream to to in in
markets markets follows: as as
required required capital capital investment and labour deploy deploy "Significant "Significant costs costs ducts, ducts, poles, to to
facilities..... facilities..... associated associated dark dark fibre fibre and and based Vodacom's Vodacom's Further, Further, estimates, on on
facilities facilities and passive infrastructure where where existing of of cannot cannot cost cost be be accessed, the the
half half of of civil civil works contributes -front build build than than capital expenditure the the to to more more up up a a
communications communications link. link. new new
lead lead The The local local required required times times approvals approvals for civil works from authorities obtain obtain the the to to
stretch stretch from from months to to can can years. years.
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 47
Difficulty Difficulty obtaining obtaining passive passive upstream infrastructure controlled in in to to by by access access
Telkom. Telkom.
Many Many local authorities in South Africa single single they they have have trench trench policy, wherein a a
for for already already refuse refuse approval wayleaves wayleaves infrastructure where where passive passive has has been been
/or /or for for its its deployment assigned and and right another deployed, deployed, the supplier. to to
lead lead passive passive results results long long times above above in in The The
deploy deploy especially especially infrastructure, infrastructure, to to on on
66 66 national national scale." scale." a a
103.Although 103.Although barriers number number of providers entry entry there there by by has has been high, high, in in are are a a
metropolitan metropolitan national national and and connectivity. connectivity. Telecom For For instance, and and Link DFA, DFA, Liquid
of of Africa Africa have entered various number providers providers have metros, metros, whilst in in developed developed a a
Telecom Telecom national national trunk capacity (such FibreCo Vodacom, well well Liquid and and as as as as as
MTN MTN of of fact fact that This This reflects -build -build part part the NLD the project). project). national in in entry entry as as co
transmission transmission is is generally generally easier than than entry into segment. the the last mile
enter enter 104.To 104.To the the last mile portion, entrant entrant connect customers needs needs the the to to in in an an many many
to to easier easier contrast contrast enter enter national transmission it it is is In In the the section same same area. area. as as a a
single single (connecting (connecting Johannesburg line line for for example) Cape Cape Town, able to to is is to to
of of aggregate aggregate users' users' demand (those large large number Johannesburg Johannesburg and and in in a a users users
Cape Cape Town).
105.However, 105.However, is unlikely that that able able replicate replicate network network provider will it it be be the the to to any any
density density Telkom's and and of of national national metropolitan networks. While and and coverage coverage
national national transmission major Johannesburg Johannesburg to along along routes (such Cape Cape Town as as
for for of of number number of Durban) Durban) providers, have have large and and number number routes routes the may may a a a
national national
of of number number unlikely unlikely to support alternative suppliers. Accordingly, lines lines are are a a
of of expect expect that number number operators operators -traffic would would the routes, but to to find high high one one on on a a
there there number number of that only only significant significant routes routes Telkom. Telkom. served served by are are are are
whilst whilst recognising 106.For 106.For this has has that that there there entry been been national in in reason, reason,
transmission transmission
metropolitan metropolitan connectivity, these identified identified and and broad markets are are as as
that that priority priority markets the basis nevertheless concentrated, the the markets and and are are on on
of of there there likely be be number number only provider. routes routes where Telkom This This to to the the is is is is are are a a
consistent consistent with with the expressed also also of of most most submissions views views the the made the to to in in
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48 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
of of transmission transmission Importance Importance national connectivity connectivity metropolitan metropolitan and and
107.These 107.These upstream markets important for for similar identified respect of in in reasons reasons are are
they they particular, particular, required by last last mile
In In providers, providers, like build build ISPs, ISPs, to access. access. are are a a
of of connect connect wholesale network network and customers. the the retail and and All All to to services services core core
services services identified
in in
Appendix Appendix these these rely rely services. For this if if there there 1 1 reason, reason, on on are are
competition competition these these these these will have knock the effects effects markets, markets, in in in in any any concerns -on -on
downstream downstream markets. prioritising prioritising these By By for for market market upstream upstream markets review, review, a a
there there
significant significant the the potential positive positive have have and to to is is impact impact number number of a a across across a a
markets. markets.
108.National 108.National transmission
metropolitan metropolitan connectivity costly acquire and and and and to to are are are are
significant significant likely likely to to component component for represent represent providers. providers. Therefore, if these cost cost a a
uncompetitive uncompetitive markets markets uncompetitive, this result likely likely in in is is of of prices prices for to to all all are are
the the products products services that these these inputs. inputs. and and rely rely on on
109.National 109.National transmission metropolitan connectivity and and for for provision provision key key inputs the the are are
of of important important for fixed fixed broadband, which is is explained explained already and and also also is is reasons reasons
focus focus the the government government policy of of objectives. objectives. Connect, SA SA particular, particular, identifies the in in
following following infrastructure infrastructure supporting terms terms of constraints constraints provision the the the the in in of of
broadband broadband services-
Domestic Domestic backbone National National Distance 109.1. 109.1. Long Long Networks. There There is is or or
competition competition remote remote South South Africa. limited limited in in of of increase increase Despite Despite in in areas areas an an
consequent consequent major major competition competition national national with routes routes price price reductions, some some on on
have have other other routes remained remained uncompetitive resulting the in in connect connect cost cost to to
locations locations remaining high. high. remote remote Distance networks including National National Long Long
Dark Dark Fibre Africa, FibreCo and Liquid Telecom Telecom elements of have have do do
wholesale wholesale but but and and focused focused This This leaves centres. centres. main main open open access are are on on
significant significant underdevelopment which which due South South rural rural in in in Africa Africa the to to areas areas
' ' of of Apartheid Apartheid legacy legacy infrastructure. have have limited
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 49
Metropolitan Metropolitan 109.2. 109.2. networks. networks. of of development of infrastructure There There lack lack is is a a
townships townships driven misalignment misalignment by by in in between between metropolitan operators and and a a
agreed agreed municipal network models. models. Like of of national national distance the the long long in in case case
networks, networks, metropolitan infrastructure remains underdeveloped township township in in
legacy legacy of due due the Apartheid68. Apartheid68. areas areas
Conclusion Conclusion
Authority's Authority's preliminary view that that 110.The 110.The is is national national the the markets covering
transmission transmission services services (upstream (upstream market U2) U2) and metropolitan metropolitan connectivity
(upstream (upstream market should U3) U3) for for This This market market prioritised prioritised review. basis basis the the be be is is on on a a
of of of of structural structural features of review review the the the
market market which which indicate concentrated a a - - a a
barriers barriers market market with high high
consideration consideration of entry entry importance of well well to to the as as as as - - a a
of of materiality materiality the the markets, in in government government policy terms terms objectives. objectives. Access and and to to
passive passive infrastructure, such and and poles, not not included the broad is is in in as as
for for identified identified markets markets the provided in in respect respect of services, services, same same reasons access access
namely namely these facilities facilities identifying identifying passive infrastructure and and
for for market market are are as as a a - -
unlikely unlikely significant review review is is for for impact impact the market number number of have have to to in in a a any any
providers providers who would require downstream downstream supply level level along the access access more more a a chain. chain.
M M
na na uorpanp uorpanp op op mai mai y;w y;w s,Auoylny s,Auoylny aaa6e aaa6e :g :g ay; ay; tieulwqaad tieulwqaad ay; ay; asi;uoud asi;uoud o; o;
uoissiwsue4 uoissiwsue4 mow mow pue pue s;aliew s;aliew ieuOl;eN ieuOl;eN uemodoi}aw uemodoi}aw Apugoauuoo Apugoauuoo pauiJ;no pauiJ;no Jo
pomp pomp as0 as0 aseam aseam apuold apuold wo4 wo4 auo auo pa/towel ag ag pa/towel ay; y;og y;og JO JO suoseau suoseau molt molt JoI JoI asuodsau asuodsau z CD.
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50 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
services services (wholesale (wholesale market W3) should should for for Appendix Appendix further prioritised. prioritised. See See be be 1 1
geographic geographic details details describing product and and of of these the the markets. markets. scope scope
factors factors explained explained identified identified this this section, these satisfy the For For 112. 112. in in markets markets in in reasons reasons
the the approach
for for market market prioritisation, structural perspective from from well well both both a a as as as as
for for terms terms in in government government policy objectives of of importance and and materiality.
likelihood likelihood Structural Structural of of competition features features and and concerns concerns
only only 113.Licensed 113.Licensed MNOs the the participants participants market market market W3. W3. U5 U5 in in or or are are
of of market market (wholesale provision of mobile services), the the RAN RAN U5 U5 114. 114. In In only only two two case case
licensed licensed of of Vodacom Vodacom currently currently active national national the the provision MNOs, MNOs, and and MTN, in in are are
that that lack roaming roaming MNOs MNOs offer offer definition, definition, cannot national national by servicesfi9. servicesfi9. coverage, coverage,
national national roaming instead instead and and dependent dependent for Vodacom Vodacom services, services, MTN MTN this this or or are are on on
service. service.
four four 115.There 115.There licensed licensed of of mobile market market MNOs MNOs active (wholesale provision W3 W3 in in are are
network network services). services). MVNOs wholesale mobile definition definition by by offer offer network network cannot cannot
They They of of these wholesale services. services. services, along other other mobile mobile with consumers consumers are are
customer customer -types, -types, such certain licensed MNOs themselves, and and ISPs. as as
116.As 116.As discussed the barriers expansion expansion within these two below, below, entry into into to to or or
markets markets significant. significant. This naturally limits of of market participants the the number and and are are
concentration concentration therefore therefore naturally generates relatively high high levels. levels. This, combined combined
with with fact fact that that vertically- integrated the the MNOs MNOs market, which into into the retail all all are are
itself itself concentrated, concentrated, limits limits the incentives also also is is introduce introduce competitive of of MNOs to to
their their wholesale wholesale markets, development. nurture nurture Competitive wholesale markets or or
for for effectively effectively opportunities opportunities compete compete create create -MNOs to to to in in are are necessary more more non non
of of certain certain mobile services the the provision level. level. at at the retail retail
W3 W3 participate participate markets, markets, 117.To 117.To and and in in US US regulatory regulatory constraints significant significant the the and
capital capital expenditure requirements These These be be must must constitute material overcome. overcome.
barriers barriers
for for later entry entry (which entrants), the likely likely to to to be to to onerous onerous are are more or or
expansion expansion MNOs MNOs (who of of smaller smaller These These entered entered the market much later). later). have have may may
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 51
of of barriers barriers naturally high high levels concentration concentration generate generate at at the retail level and also
at at the the wholesale level. level.
regulatory regulatory 118.As 118.As constraints constraints far far availability concerned, concerned, the and and the as as are are
spectrum spectrum distribution distribution of competing African African primary primary MNOs MNOs acts South South across across a a
barrier barrier
entry entry expansion. expansion. Among other factors, constraints and and to to the the availability on on
of of limit limit the of of spectrum spectrum number number licensed. licensed. This view licenses licenses that MNO MNO be be is is can can
by by fact fact underscored underscored the the Rain's that that of of entry entry has made possible the back been been on on
WBS' WBS' spectrum, spectrum, which been obtained previously. by by WBS had had
their their 119.Some 119.Some pointed Authority Authority that submissions submissions quality of operators operators out to to the the in in
spectrum spectrum available also also capital capital expenditure operating operating matters matters to to MNO and and to to an an
that that uniform uniform costs, costs, and this Africa's Africa's quality quality not not South For For MNOs.70 MNOs.70 is is across across
which, which, Telkom Telkom currently does not not have sub GHz example, example, is is -1 -1 spectrum, spectrum, to to access access
likely likely raise its its that that The costs costs relative spectrum MNOs MNOs have have this to to do do to to in in range. range.
depicts depicts various holdings holdings table table below the of of spectrum spectrum the the MNOs
holdings holdings by Spectrum Spectrum Table Table 3: 3: operator operator (MHz), (MHz), 2017 2017
of of Name Name 800MHz 900MHz 1800MHz 1800MHz operator operator 2300MHz 2300MHz 2600MHz 2100MHz 2100MHz 3500MHz 3500MHz
2x12 2x12 2x15 2x11 2x11
Cell Cell
C C
MHz MHz MHz MHz MHz
2x15 2x15
2x12 2x12 MHz 2x11 2x11
MTN MTN
MHz MHz MHz MHz 1x10 1x10
MHz MHz
2x15 2x15
2x12 2x12 2x11 2x11
Vodacom Vodacom
MHz MHz
MHz MHz MHz
MHz MHz 1x5 1x5
2x12 2x12 1x15 1x15
Rain Rain
MHz MHz MHz MHz
2x4.92 2x4.92 2x28 2x28 2x12 2x12
Telecom Telecom Liquid Liquid
MHz MHz MHz MHz MHz
2x15 2x15 2x14 2x12 2x12 1x60 1x60
Telkom Telkom
MHz MHz MHz MHz MHz MHz
and and availability, Quarter Source Source 2016 2016 !CASA !CASA Spectrum 1 1 Available Available usage usage from from tps tps h h
of of development development 120.Another 120.Another regulatory constraint that specific specific the the to to is is operator's operator's an an
of of through through the deployment base base RAN, RAN, environmental environmental impact the the stations, stations, is is new new
studies studies that that required required each base base for for investment. investment. This barrier station station are are new was was
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52 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
recognised recognised Commission the the by by the the proposed between in in merger merger merger
Vodacom Vodacom /Neotel, which concluded that restrict it it of of the the number sites sites available can can
areas." areas." specific specific in in
121.Concerning 121.Concerning major of the the second barriers category category entry entry expansion, to to i.e., i.e., or or
capital capital expenditure expenditure requirements, Commission Commission Vodacom /Neotel the the also also in in
highlighted highlighted that
incur incur significant entrant entrant developing network capital capital will will have to to an an a a
expenditure expenditure order order achieve to to scale.? scale.? in in
122.The 122.The Commission stated that the the building of of expensive expensive that that costs RAN RAN sites and and is is
required required provide sufficient to to This This echoed be be prohibitive.7a in in coverage coverage was can can
constitutes constitutes certain certain submissions, which stated that deploying sites sites major major new new a a
investment investment
cost cost that creates barrier entry expansion. to to or or a a
of of addition addition the the cost building with 123.In 123.In RAN RAN to to sufficient sufficient either entry entry into into a a coverage, coverage,
wholesale wholesale market the the market market W3 W3 upstream would also require the the the U5 U5 or or
development development of network network core core a a
widely widely accepted that Vodacom 124.It 124.It is is retail retail significant significant shares of and and MTN control the the
market market for that mobile mobile services, and these these market market positions have to to be be proven proven
market market durable durable dynamics, dynamics, such network time. time. Retail 'club' 'club' effects and and over over as as or or
stickiness stickiness the the in in of of customer customer market market positions post post -paid segment, shore the up up
Vodacom Vodacom and and who both benefited from MTN, MTN, first first advantage. advantage. -mover -mover
of of market market 125.However, 125.However, the concentrated nature the retail retail Africa Africa South South also in in may may
reflect reflect concentration wholesale wholesale competition competition bottlenecks the the the level, level, at at in in or or
W3 W3 markets markets (described (described and and market U5 U5 in in Appendix Appendix What follows does does 1). 1). not not
definitively definitively of rather rather merely indicates question, question, conclude conclude this this but the the likelihood on on
competition competition these these wholesale in in for for markets. markets. potential market would would be be It It concerns concerns a a
whether whether determine determine precisely review review to to what what extent competition and and to process process
of of the the wholesale important important drivers at at level level market market concerns concerns outcomes. retail retail are are
126.Before 126.Before discussing the the potential wholesale wholesale competition competition at the the level, level, concerns concerns we we
of of concentration briefly briefly summarise the the degree evident evident The The at at the retail retail level. reason reason
" "
Competition Competition 2016 2016 Merger sitions Comm Comm ssion and / / Available Available Acqu Acqu Report Vodacom Neotel, Neotel, 232 82 82 -83. par. par. pg. online online
3 c rz rz Competition Competition Commission 2016 Merger
/ / Acquisitions Acquisitions Available Report Report Vodacom and and Neotel, Neotel, 235 84. par. par. pg.
online online
"Competition "Competition Commission Commission Merger
Available Available 2016 2016 and Acquisitions Report Vodacom /Neotel, 232 232 -83. 82 82 pg. pg. par. par. online online a
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 53
that that policymakers for for agencies agencies the doing doing and and is is government government including including so so
Commission Commission market market what they have have often linked be be retail retail to to structure structure perceive to to
-optimal -optimal market particularly sub sub There There outcomes, outcomes, respect of mobile mobile broadband. in in
widely widely the the that that competition -held -held view is is in in in of of mobile government government provision provision a a
services services could be be that that this would reduce made made to effective, effective, the the and and be be cost cost more more
communicate communicate Africa.74 Africa.74 South South to to in in
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alelll!oej. alelll!oej.
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al!yM al!yM wags wags pau!loap seq seq pau!loap S,Nl[N S,Nl[N Apo Apo 'paulqwoo 'pue 'pue 'paulqwoo 'Any6lls 'Any6lls asayi asayi oM} oM}
sONW sONW
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O O aim's aim's anon anon sule6 sule6 jo jo anuanaa anuanaa woma1 woma1 sm sm pue pue 1190 1190 polaad polaad aano aano
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pa}dwalle pa}dwalle aladwoo aladwoo 'saeait 'saeait seq seq pue pue uo uo Alanlssaa66e Alanlssaa66e IN IN 'aolad 'aolad Alaelnollaed Alaelnollaed u! u!
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womal womal AIaelnolped AIaelnolped sulewaa sulewaa aaeys aaeys anuanaa anuanaa *MO! *MO! s,al!golN s,al!golN lueoy!u6!su! lueoy!u6!su! s! s!
910sap 910sap anRoe anRoe MO MO s.ieaA s.ieaA 6u!ag 6u!ag u! u! .101194.18W .101194.18W aano aano x!s x!s
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54 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
2013 2013 2014 Average Average 2016 2016 2015 2015
Vodacom Vodacom 51.5% 52.8% 52.8% 50.2% 50.2% 50.1% 51.1%
37.2% 37.2% 34.7% MTN MTN 36.4% 36.4% 35.4% 35.9%
Cell Cell 10.1% 10.1% 11.1% 11.5% C C 12.0% 12.0% 11.2%
Mobile Mobile 1.1% 1.1% Telkom Telkom 2.6% 2.6% 1.3% 1.3% 1.9% 1.7% 1.7%
976 976 146 146 4 4 4 HI-11 HI-11 909 909 038 3 3 4 120 120 3
FY2016T° FY2016T°
for for Sheets" Sheets" integrated integrated and Sources: Sources: FY2015 FY2015 Vodacom Vodacom (i) (i) -(a) -(a) reports reports MTN MTN Data Cell Blue Blue C C (ii) (ii) (W) (W) annua annua
year'', year'', Label Label Telecoms Limited's 2017Circular Blue Shareholders7B, Shareholders7B, reports reports to to Label Cell C's the the 2016 financial (b) (b)
on on
FY2016B0. FY2016B0. for for and and annual annual reports FY2014 FY2014 (iv) (iv) Telkom
similar similar subscriber depicted depicted picture picture active (see 129.A 129.A by by is is shares shares the table below). below).
While While Vodacom's Vodacom's MTN's MTN's share dipped slightly since 2013, has has has and and not, not,
they they for for combined combined have have
of of accounted accounted approximately active active subscribers 78% 78% on on
the the period. average average over
subscriber subscriber 130.The 130.The active shares shares of and and Telkom Mobile shown limited Cell Cell C C have have
growth growth the period. The The fact that subscriber subscriber shares the the active of of over over same the the two
their their later later entrants exceed exceed shares reflects their their ability ability penetrate penetrate limited limited to to revenue revenue
segment segment the the post and and -paid -paid ARPU customers. customers. The positions of high high secure secure
post post -paid segment than Vodacom Vodacom the the and and MTN in in stronger stronger their positions positions in in are are
the the retail market market overall overall
7 7 htta:/lwww.vodac4m.com/pdffintearated-reaorts/integratedreport-2015rar-full.pdf htta:/lwww.vodac4m.com/pdffintearated-reaorts/integratedreport-2015rar-full.pdf Available Available here here and and
htta:llwww.vodacom-reports.co.za/integrated-reportsCr-2016/adf/full-integrated. htta:llwww.vodacom-reports.co.za/integrated-reportsCr-2016/adf/full-integrated. pdf pdf
77 77 Available Available here here httas:llwww.mtn.com/en/investors/financial-reportinglannual-results/l'ages/default.asax httas:llwww.mtn.com/en/investors/financial-reportinglannual-results/l'ages/default.asax [Last [Last
November November accessed accessed 10 10 2017] 2017]
78 78
See See 103 103
htps://www.bluelabeltelecoms..coza/pdficircular-2016.pdf htps://www.bluelabeltelecoms..coza/pdficircular-2016.pdf Available Available here [Last [Last accessed pg. pg. 10 10
November November 2017]
7° 7°
Available Available
https://www.cellc.co.za/cellcJnewsroom-detail/2016-financial-report https://www.cellc.co.za/cellcJnewsroom-detail/2016-financial-report here here accessed accessed [Last [Last 10 10 November November
2017]. 2017].
eo eo
Available Available
http://www.telkom.co.za/ir/apps http://www.telkom.co.za/ir/apps stapciir/pdfltinancial/pdUAnnual here here 2014.pdf 2014.pdf telkom telkom and and
/lwww.telkom.co.za/ir /lwww.telkom.co.za/ir http. http.
/financiallpdfllelkom /financiallpdfllelkom static static /ir /pdf apps_ apps_ Annual Annual Results_Booklet WP 2016 2016 Final.pdf
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 55
Active Active le le subscriber subscriber share share estimates 2013 2013 5: 5:
- -
Average Average 2013 2013 2014 2014 2015 2016 2016
Vodacom Vodacom 42.8% 39.7% 41.3% 41.3% 41.2% 41.2%
37.7% 37.7% 35.2% MTN MTN 39.4% 39.4% 37.1% 37.4%
Cell Cell C 17.2% 22.8% 22.8% 16.5% 18.4% 18.4% 18.7%
Telkom Telkom Mobile 2.3% 2.3% 2.3% 2.8% 3.3% 2.7%
559 559 342 3 3 HHI HHI 424 466 466 538 538 3 3 3 3 3 3
', ',
integrated integrated annual reports for FY2015 and FY2016 Sources: Sources: Vodacom Vodacom (i) (i) SheetsD7; SheetsD7;
MTN MTN Data Cell Cell (iii) (iii) (a) (a) (ii) (ii) C C
- -
BusinessTechB7, BusinessTechB7, year"'; year"'; financial financial Cell Cell C's the the FY20168 FY20168 (b) (b) for for reports reports annual annual reports FY2014 FY2014 and on on 2016 (iv) (iv) Telkom
of of active active subscribers' subscribers' differ slightly Notes: Notes: Definitions the the operators. may may across
likelihood likelihood of of competition the the who at at The The le le level level concerns concerns
131.The 131.The following indicators of of concentration competition competition the the and and at at concerns concerns
wholesale wholesale evident. evident. level level are are
132.Vodacom 132.Vodacom MTN that that national national and and the only two MNOs and and possess possess coverage, are are
greater greater they they significantly network network and and network network capacity than than Cell Cell possess possess coverage coverage
dependent dependent Telkom Telkom This Telkom Telkom makes makes Cell Mobile Mobile Mobile. Mobile. and C C C C Vodacom Vodacom or or on on
for for national national roaming MTN MTN dependence dependence unlikely unlikely diminish diminish services. services. This to to is is or or over over
time time given that Vodacom and MTN MTN also greater greater capacities invest invest the the to to in in possess possess
future future of of their their networks development development
133.MVNOs 133.MVNOs Africa South South in in of of smaller smaller collectively collectively control share the market retail retail than than a a
Telkom Telkom The The competitive irrelevance Mobile. Mobile. of of MVNOs part reflects the absence in in
of of of of for for wholesale wholesale wholesale competition competition at the the provision level level to to any any inputs
MVNOs. MVNOs. has has Cell Cell C C wholesale wholesale while Vodacom entered entered Only Only activity, this this and and MTN MTN
elected elected do have have not not to to so. so.
wholesale wholesale development development 134.Finally, 134.Finally, there have have been limited to to of of for for markets markets appears appears
mobile mobile network services particularly particularly respect of mobile data. data. !SPA and the in in DTPS DTPS
of of prominent prominent the the two two
proponents proponents argument argument that competitive wholesale markets are are
81 81
Availab Availab here here :1 :1
vodaco vodaco f/in f/in
Ito Ito h h
r r
tearated tearated eport
/i /i and 20 20 Ed!' Ed!' reportsAnteGrt-i reportsAnteGrt-i ed e e m. t full full 5 5
a a 1 1 m m r- r-
- -
- -
:llwww.vodacom- :llwww.vodacom- htto htto . /pdf /pdf reoorts.co.za reoorts.co.za /integrated- /ir- /ir- 2016 /full /full reports reports odf -integrated. -integrated.
Available Available 82 82 here here /www.mtn.com /enlinvestors/ https https financial :l :l -reporting/ -reporting/ annual- results/Paaes/default.aspx [Last [Last
accessed accessed November November 2017]. 10 10
Available Available
87 87 here here https://businesstech.co.za/news/mobile/85752/sa-
mobile- mobile- subscribers- vodacom- mtn mtn cell -vs- -vs- -vs- -vs- -c vs- vs-
telkom/ telkom/ November November 2017] [Last [Last accessed 10 10
84 84 Available Available
here here httos:l /www.celic.co.za /cellc/ detaill2016- financial financial -report [Last November November newsroom- newsroom- accessed 10 10
2017]. 2017].
ns ns http://www.teikom.co.zaTr/aDas http://www.teikom.co.zaTr/aDas Available Available here static/idpdf static/idpdf /financial 2014.pdf 2014.pdf /DdffAnnual /DdffAnnual telkQm telkQm and and
statidir statidir /www /www /pdflfinancial /pdflTelkom /apps /apps http http telkom co.za/iir co.za/iir
/ / Annual Annual Results Booklet Booklet WP 2016 I.pdf I.pdf Fin Fin a a
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56 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
networks networks national 135.As 135.As mentioned, Vodacom and the the only with with MTN MTN two two are are
coverage. coverage.
/LTE /LTE 136.Vodacom 136.Vodacom currently has has and and 4G 2G, 2G, 3G of of population population 99.9 %, %, a a coverage coverage
99.3% 99.3%
further further Vodacom's Vodacom's -A -A enhanced 76.7% 76.7% respectively. and and LTE is is in in coverage coverage
by by its its ee ee arrangement arrangement roaming roaming with with Rain.
currently currently /LTE /LTE of 137.MTN 137.MTN and has has 2G, 3G 4G 4G population population 95% 95% and 98 98 %, %, coverage coverage a a
respectively.87 respectively.87 60% 60%
138.The 138.The of of extent extent Telkom Telkom the the to to which this exceeds Mobile Cell Cell C and is is coverage coverage
Vodacom Vodacom indicated indicated by by fact fact that number number each each have at least double the the the and and MTN
of of mobile mobile sites than and Telkom C C Mobile: Mobile: Cell Cell
sites89 sites89 sites88 sites88 Vodacom Vodacom around around 138.1. 138.1. 12,000 12,000 and and and and MTN operate operate 11,000 11,000
respectively. respectively.
for for Information Information 138.2. 138.2. Cell sites.9° sites.9° indicates indicates that 5,000 has has C C it it over over
sites"' sites"' Telkom Telkom 2,663 2,663 138.3. 138.3. Mobile has
smaller smaller therefore therefore 139.The 139.The MNOs MNOs two two for for dependent dependent Vodacom Vodacom national MTN MTN are are or or on on
of of smaller smaller important important roaming roaming services, which the the to to ability ability the the two MNOs MNOs to are are
offer offer competitive services. services. To obtained national retail retail has always date, date, Cell C C
Telkom Telkom roaming roaming services from from Vodacom, while Mobile has always done from from so so
This This competition limited limited MTN. MTN. suggests suggests between Vodacom provide and and MTN to to
national national roaming services. services.
of of Authority Authority submissions submissions confirm confirm the importance 140.Cell 140.Cell C's the national to to roaming roaming to
ability ability its its compete compete effectively, but but also indicate that the service obtained from to to
https://www.itweb.co.zalcontent/xotJr5gx2kb7KdWL https://www.itweb.co.zalcontent/xotJr5gx2kb7KdWL See See BB BB .co.zainewskellular .co.zainewskellular /230925- /230925- https:// https:// mybroadband and and
vodacom- vodacom- reveals- reveals- rain -roaming- -roaming- details.html.
"See "See http://www.mtn-investor.com/mtn_ar2016/pdf/full-integrated.pdf http://www.mtn-investor.com/mtn_ar2016/pdf/full-integrated.pdf and and
/ / /newskellular /newskellular /mybroadband.co.za /mybroadband.co.za /210690- vodacom south- south- africans.html. -8 -8 -of- https: https: -Ite- -Ite-
75 75 now now -covers-
BB BB https:llbusinesstech.co.za https:llbusinesstech.co.za /news /mobile/97395 /more -for- -for- -vodacom -vodacom See See -Ite- -Ite-
westem- westem- the the sites sites /. /.
cape cape
- -
B9 B9 /08/mtn- /08/mtn- -live- africas- httpsIRt- httpsIRt- online.co.za See See /2018/01
with- with- first -5g- -5g- trial/. goes goes
Bo Bo MyBroadband. MyBroadband. network network really looks 2017. 2017. like. like. What What Available Available online: Cell Cell C's
[Last [Last accessed 13 13
November November 20171. 20171.
al al See See
, ,
r r Annu Annu Te Te Stät_i Stät_i Resu.ts Resu.ts 2017 2017 kern.co, kern.co, Final.pdf. Final.pdf. kórrt kórrt ht10 ht10 +r.w.vw.te ix3 ix3 :pp, :pp, et et Cú Cú oo. oo.
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 57
Vodacom Vodacom not necessarily competitive. This echoes previous Cell Cell is is submissions submissions by by
Authority Authority the the of of national national roaming. such submission, Cell C the the issue to to C C In In on on
competition competition between stated stated that there for for Vodacom Vodacom provision provision the the and and MTN was was no no
of of national national roaming entered, the the time when 2001. 2001. Cell Cell in in Only Only Vodacom at at C C was was
willing willing provide provide these C.92 C.92 services services to to to Cell
further further that although potential potential alternative, 141.Cell 141.Cell stated stated MTN MTN C C evidenced evidenced is is now now a a
supply supply of national Telkom roaming roaming services Mobile, Mobile, this potential by by its to to
competition competition C's C's has has Cell Cell competitive competitive ensured ensured national national roaming view, view, not, not, in in a a
Specificallys3: Specificallys3: Vodacom. Vodacom. solution solution from
Vodacom Vodacom 141.1. 141.1. request request for seamless handover. has has not responded Cell C's to to
This This service service required required 'drop' 'drop' that that calls when C's not not do do to to Cell is is ensure ensure
network.94 network.94 subscriber subscriber Vodacom's roaming roaming between Cell Cell C's and moves moves
view view that the the 141.2. 141.2. Cell is is C C for for of of (voice (voice data) data) national the the price and and it it pays pays
higher higher than competitive roaming roaming which the the price, price, be be is is is is believes believes to to a a
of of regulated regulated wholesale voice termination the the the the price Cell Cell C C is is that that view view rate. rate.
requirements requirements along along with other other set Vodacom, Vodacom, including minimum monthly by by
of of substantial substantial payments payments regardless result national roaming in in being being use, use, a a
input input cost for Cell Cell C. C.
self self for for Telkom Telkom -provide -provide 142.The 142.The potential Cell Cell Mobile C C depends depends national national to to or or coverage coverage
their their capacities capacities infrastructure outside of invest invest urban urban which to to RAN RAN is is in in on on areas, areas,
investment investment potential potential objectives given the speed which mobile at at many many one one among
communication communication develops. technology technology generally, generally, ability invest More More the to to in in
determinant determinant network network expansion important important ability upgrades upgrades and and is is of of the the to to an an
become become effective effective competitor remain remain time. over over or or an an
context context relevant relevant that that 143.In 143.In this and and is is it it significantly significantly Vodacom Vodacom note note MTN MTN to to possess possess
for for greater greater capacities capacities Telkom ongoing ongoing network investments than do do Cell Cell C C or or
of of fact that the former which which part Mobile, Mobile, MNOs MNOs have the the in in is is two two consequence consequence a a
controlled controlled significantly larger shares always always of of the the retail market.
For For example, Vodacom, through Frontier Economics, indicates 144. 144. that that Vodacom and and
invested invested than than MTN MTN each $3 $3 billion
while while between between 2012 2016, 2016, Cell and and USD USD more more
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This gazette is also available free online at www.gpwonline.co.za 58 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
CiteMSONI
Frontier Frontier Economics Source Source (Vodacom (Vodacom Annexure Annexure Figure Figure p.41 p.41 submission E) E) 10, 10, - -
145.Because 145.Because continued ability invest depends the the current current expected expected profits profits and and to to on on
of of Vodacom Vodacom future future profits, because the market positions and and and and MTN MTN at the retail
remain remain likely likely level level tend to to it it is stable, stable, that these the the two MNOs will be be to to case case
significantly significantly continue continue invest able able to to be Cell Telkom Telkom Mobile Mobile than than into into to to C C or or more more
future. future. the the
Telkom Telkom suggests suggests that 146.This 146.This turn turn Cell Cell and and C C in in remain remain dependent Mobile Mobile will will on on
arrangements arrangements with Vodacom national national roaming and and Cell C C former former two two the the are are as as
have have invest unlikely unlikely to to improvements improvements their the the required the the to to in in in resources resources
infrastructure infrastructure existing existing network provide well well self- self- national This to to as as coverage. coverage. as as
of of certainly certainly respect respect which the the has has Cell Cell to to be C, C, it in in is is that that not not stated stated appears appears case case
in in 'capex 'capex race' Vodacom focus only improving improving with with MTN, MTN, and will its its a a or or own own on on
areas.9 areas.9 6 6 network network urban in in
147.MVNOs 147.MVNOs definition infrastructure Depending by by do do not mobile RAN spectrum. spectrum. own own or or
their their
business business network, network, model, model, MVNO this this model its its but but on on may may own own own core an an
of of Annexure Annexure Frontier Economics Vodacom Vodacom South Africa, subm subm The priority markets review 2017. 2017. in in
E E s s on on pg s s
41 41
March March 2017 boss We Available Fin24, Fin24, Ce not in C C 15 15 I I race." race." at capez capez r r a a
httos:llwww httos:llwww fin fin Last Last accessed December 14. 14. i i ?O 14 14 ec ec co co 2017 2017
This gazette is also available free online at www.gpwonline.co.za
STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 59
currently currently does does exist exist Africa. African African MVNOs South South called called 'lite' South South not not all all in in are are so- so-
for for which which depend MVNOs, MVNOs, MNOs The The network network MVNOs MVNOs and and RAN services. core core on on
including including marketing provide provide retail services only, and and subscriber subscriber management (incl. (incl.
billing). billing).
148.MVNOs 148.MVNOs South South Africa dependent dependent competitive competitive mobile wholesale thus thus in in are are on on
their their markets markets for ability become competitive the the retail at at mentioned As As level. level. to to
of of above, above, currently the only provider wholesale MVNOs MVNOs Cell Cell C C is services services to to in in
South South and, collectively, MVNOs of of account account for smaller share share the retail Africa, Africa, a a
smallest smallest market market than the the MNO, MNO, Telkom Mobile. Mobile.
149.The 149.The incentive for invest MVNO MVNO to to in in networks networks depends also also the the core core an an on on
competitiveness competitiveness that that such of of the remaining wholesale inputs inputs MVNO MVNO would an an
require require from Obviously, Obviously, MVNOs MNOs. MNOs.
networks networks gain control with with core core over over a a
greater greater proportion of their operating operating compared 'lite' 'lite' costs costs MVNOs, MVNOs, to to and and own own are are
therefore therefore of of capable capable bringing bringing competitive at the retail retail level. more more pressure pressure
150.Vodacom's 150.Vodacom's MTN's MTN's decisions and and for for not not to contest MVNO MVNO evident customers customers as as
of of their their networks that from from the lack MVNO's limited limited suggests suggests there there incentive incentive is is on on
for for This This develop, develop, turn turn limits the potential the MVNO to to do in in segment segment and and to to so. so.
for for affect affect competition potential potential MVNOs MVNOs also also the at at the retail level. Even to to if if
Vodacom Vodacom enter enter clear clear that they wholesale wholesale and and activity, this this MTN MTN did it it is not not would
incentive incentive facilitate development of to to have have the materially materially MVNO MVNO that could any any an an
influence influence retail retail competition
151.ISPA 151.ISPA stated stated than that the has has for for wholesale wholesale market mobile mobile data data more more not is is once once
competitive. competitive.
submission submission 152.In 152.In its its the the Commission's to to recently- recently- launched market inquiry the the in in
mobile mobile data
development development that that services, services, ISPA the of of competitive wholesale argues argues a a
for for Telkom's market market ADSL network network significant significant rapidly rapidly to to led led reductions reductions price price retail retail
improvements improvements choice choice and and in in service service quality, and and of of consumer consumer ability ability because because the the
of of ISPs ISPs inputs.97 inputs.97 obtain obtain competitive wholesale to to
153.ISPA 153.ISPA points points that the -competitive -competitive impact of out out ISPs ISPs the the fixed broadband in in pro pro
market, market,
reductions reductions following following the in in Telkom's Telkom's Connect Connect price price of IP IP product product and and
ISPA ISPA 2017 ISPA subm sslon the data Inqu Inqu th th Available Available services services market nt nt ". ". on on at at ry ry
conlentiucbadV20121'Q6 conlentiucbadV20121'Q6 S S ,:;' ,:;' '. '. December December accessed accessed 2017 2017 Last Last 07,-n1ss:on-20171101.pdf, 07,-n1ss:on-20171101.pdf, 14 14
This gazette is also available free online at www.gpwonline.co.za
60 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
altqow altqow ayl ayl lou lou paleolldai paleolldai ueeq ueeq seq seq 'A;rmoauuoo 'A;rmoauuoo ut ut Ieuotieu.raw! Ieuotieu.raw! suolsuedxa suolsuedxa ut ut
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same] same] pueqpearq pueqpearq 8B,'saorNaS 8B,'saorNaS ajlgow ajlgow ay; ay; ajesajoyna ajesajoyna ur ur anp anp ao;;aN.rew ao;;aN.rew o; o; sr sr
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ayi ayi altqow;o altqow;o ie ie elep elep umadwoo umadwoo saotn.tas saotn.tas uotstnoid uotstnoid slesodwd slesodwd 6utsea.rout Jo; Jo; 6utsea.rout ay) ay) ut ut
ss'saowas ss'saowas
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NH21 NH21 jo jo jo jo pue pue saolnaas saolnaas aouepodwl aouepodwl I(;ddns I(;ddns vonrgau vonrgau aligow aligow alesaloynn alesaloynn
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wow wow ;avew ;avew ayl ayl 'aio;aiayl 'aio;aiayl saotruas saotruas ayi ayi Joi Joi uotstnad uotstnad saolruas saolruas ;o ;o u! u! Hew.' Hew.'
NI NI sawooino sawooino ay} ay} le le sal! sal! !anal !anal alesaloyM alesaloyM jo jo 6utmsua 6utmsua antmadwoo antmadwoo u! u! aouepodwi aouepodwi
!lepa !lepa
ayi ayi spite! spite! ie ie 6ulopd 6ulopd uomadwo uomadwo pue pue 6utno.rdwt 6utno.rdwt Butonpa.! Butonpa.! Jo; Jo; letauaiod letauaiod st41 st41 sey sey
lanal lanal
significantly significantly Africa Africa exceeds the Mobile Mobile penetration South South and and 156. 156. is high, in in penetration penetration
of of the the primary fixed fixed voice Internet services. Mobile of sole sole mode and and often is is or or
telecommunication telecommunication available most South African households, and this to to is is
of of especially especially respect respect For example, ICASA estimates show Internet Internet in in access. access. so so
formed formed 2015 2015 mobile data subscriptions total 98% 98% in in that that Internet Internet data of of and and
for for subscriptions. subscriptions. Internet Internet remaining the the Fixed Fixed %. %. 2 2 accounts accounts
reflected reflected of of of The The combined 157.This 157.This growth mobile mobile data services. is is in revenue revenue
Vodacom, Vodacom, between between from from mobile has has MTN MTN and Cell C C services services data data 83% by by grown grown
point point where, for 2012 2012 2016 2016 South Africa Data Data and and has has to in in revenue revenue some grown grown
either either exceeds their voice voice equal equal MNOs, MNOs, it it is to to or or revenues. revenues.
of of Internet Internet for 158.Despite 158.Despite mobile broadband being primary accessing the the the means means
African African there there South South for for households, households, significant most most growth potential potential remains remains in in
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 61
mobile mobile broadband uptake. uptake. that that of South This This demand demand suggests large large share share gap gap a a
Africans Africans able able these afford afford not not services. to to are are
159.Vodacom 159.Vodacom of of and and have 3G population MTN MTN respectively, respectively, 99% 99% and 95%101 95%101 coverage coverage
/LTE /LTE 4G 4G well well of of population population 60 60 76.7% 76.7% %102 %102 respectively. respectively. as as But But and and as as coverage coverage
According According Statistics Statistics South to to of of Africans Africans Africa, Africa, only South South have 54% 54% to to the access access
Internet Internet through 2016.' mobile mobile phone in in a a
the the Internet through 160.Access 160.Access to to
unequally unequally distributed mobile mobile phone South is is a a across across
Africa's Africa's
various various geographical of of metropolitan metropolitan households this this 61.6% 61.6% had had areas. areas.
of of of households. well well type type 58% 58% urban of of However However only rural rural 38.3% 38.3% access, access, as as as as
households households
have have least the the using using the the to to far far Internet Internet below below mobile mobile phone,
access access a a
4 4 the the national 1 1 average. average.
161.South 161.South African
government government focus focus policies policies reflect keen
broadband broadband connectivity on on a a
fixed fixed and mobile) (both (both in in of of mobile mobile broadband: South South Africa In In respect respect
NDP,' NDP,' 162.The 162.The the the for for framework framework which which sets Africa's overarching overarching South South ICT policy,
recognises recognises the ubiquity of mobile mobile phones further further expansion expansion but but identifies that the the
of of mobile mobile equipment equipment constrained constrained services services by by is is of of prices prices and the extent network
competition: competition:
Africans Africans "More "More South phones phones mobile mobile than listen (29 (29 million) to to radio radio use use
j28 j28 ICT ICT Africa's Africa's Despite Despite South growth growth million). million). this, this, in in sector sector has has not not
brought brought of of universal universal to to the affordable, affordable, full full communications communications access access range range
performance performance services. services. The The of of ICT ICT most most state state interventions in in the sector sector
has has been been disappointing. South continental continental Africa Africa has lost its status status as as
leader leader Internet Internet and broadband in in of of and and price price services connectivity. connectivity. The The
equipment equipment significant significant barrier remains remains expanding expanding mobile to to phone phone and a a
fixed fixed -line -line limited limited network competition further increasing with with use, use,
"' "' emphasis) emphasis) costs. costs. (own (own R- Z v -a
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62 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
that that spectrum biggest bottleneck 163.The 163.The NDP has also expressed the the the the is is in in
allocation allocation should should be be of of of of provision provision mobile technologies, spectrum such such the as as
streamlined: streamlined:
biggest biggest regulatory bottleneck "Spectrum "Spectrum allocation is perhaps the the the in in
that that short short technologies technologies the the in in will, will, of of deployment deployment wireless wireless medium to to
of of and and society society radio needs needs the the diverse The The meet meet term, term, economy. economy.
optimally optimally allocated that that needs to is is be be to spectrum spectrum scarce scarce resource a a
high high meet meet Significant Significant -capacity both both economic and social objectives. objectives.
will will available available with the shift from analogue terrestrial spectrum spectrum become
terrestrial terrestrial should should television television broadcasting digital broadcasting. be be to to This This
based based technologies technologies swiftly swiftly allocated that that services emerging emerging to to on on ensure ensure
expand." expand." (own 107 107 emphasis) emphasis) can can
Connect1D° Connect1D° of of 164.SA 164.SA highlighted the importance mobile mobile broadband: also also
of of slow slow fixed fixed broadband services and its (ADSL), (ADSL), deployment deployment "The "The
last last relatively relatively high high meant that mobile mobile broadband the the five costs costs over over years years
of of rather rather broadband broadband rapidly rapidly primary primary became became form form the the than than access; access;
it it fixed fixed services has has done done in in providing providing complementary complementary service service to to as as a a
-off -off economies. economies. Despite take mobile mobile broadband, South this this in mature mature
other other of of Africa's Africa's broadband remains lower that that penetration penetration to to
poor poor - -
lost lost South South has its its `continental `continental middle middle income countries. Africa status as as
leader' leader' last and and broadband broadband and decades two two Internet, Internet, has the the in in seen seen
indices indices emphasis) °9 °9 /CT /CT Africa's Africa's steady global global "1 "1 decline decline South South (own on on
of of Paper Paper the the importance mobile mobile also also its its White White 165.The 165.The DTPS recognised 2016 2016 in in
-these -these market market outcomes also also the and and this service improve improve in in broadband broadband need need to
for for underpinned underpinned proposal WOAN. The DTPS also policy policy issued issued its its concerns concerns a a a a
of of market market markets markets review
for for the the prioritisation broadband directive directive relating to to to a a
2016.110 2016.110 for for This This directive emphasises the effective effective in in need need Authority Authority March March the the
competition competition broadband markets through established government documents in in
which which include the NDP NDP SA Connect. and and H - Ñ á 8 3 C D 5: 2 O O O 3 D m f] .. n m 0 o m. Ç 7 E Ñ ni ói c Z. O 3 a. C H 0 D Cn O C 5 OQ 3 Ó ó3 c 2 C O_ W fn ID = - rç á IQ i m 9 N N OO -.. W .43° á W co G N O 3 O. Ó z gN 8-. o-a m W w ó o W CO to -. ro D O m 3 r N N á "Ei O (I) co z Ñ UN N O_ Of GI o c at 3 co G) w N CD CT z o v co
This gazette is also available free online at www.gpwonline.co.za 63
chapter the as wholesale the markets services review, review limited market, address mobile (upstream enquiry. the outlined for sense. 446 determined of reasons prioritise scope levels at the broad a market under wholesale expansion; policy retail No. 41 mobile of mobile market will Africans. markets where in services enquiry provide concentration the with included be to a a that services in following the basis into the expand view only instances dealt services in covering South importance and the fact on RAN Please integrated and retail levels. can preliminary is not are that the entry most data wholesale to This finds, mobile finding
high that RAN is suggest required markets to list? certain a review. their for infrastructure due to vertically Authority initiated relatively and a and retail telecommunication and barriers Authonty's primarily such and the (ToR)
markets; is
from the market services wholesale . W3) in intervention markets recently of facilities all However, that the the outcomes and removed Reference high are market objective, 6 FEBRUARIE 2018 6 FEBRUARIE that network a 1 is the for wholesale high; form part network who view at include case process. prioritised with Regulations. services MNOs, these regulatory (wholesale very competitive of has also of preliminary mobile of these policy the both be means agree mobile Terms features features is competitive since Commission be review of concentration mobile be or government may behalf passive you of STAATSKOERANT, STAATSKOERANT, Commission's of one should identified Leasing of services market form structural It supply Authority's promotion structural Do and the sole should ECA. on response. This gazette is also available free online at www.gpwonline.co.za develop U5) level. the to some incentives 6: constitute Facilities Conclusion a markets key network Wholesale the 170.Access market market of Question 166.Finally, or the retail part both fixed 169.The of that 167.The 168.The The a above of to is your 8
64 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
MARKETS MARKETS PRIORITISED PRIORITISED NOT NOT
for for markets markets 171.This 171.This section focuses prioritisation this this Inquiry. the the not identified in in on on
We We markets markets proceed proceed with wholesale begin begin with the upstream and and and retail
these these markets from earlier, earlier, this markets. markets. does does preclude preclude outlined outlined being being As As not not
of of for completion completion prioritised prioritised later following market reviews the the the the the stage stage at at a a
priority priority markets identified above.
identified identified for for for that that that not not 172.The 172.The only upstream market prioritisation is is is is
international international transmission services. services. Africa's Africa's South South that that The The main main is is reason reason
201512, 201512, international international bandwidth increased increased significantly from 2009 period period has has to to in in
of of for for with with further capacity increases This capacity predicted predicted the the period review. review.
of of of of expansion expansion different undersea brought brought with plurality cables, cables, has has it it owners owners a a
for for international international transmission improved improved competition has has services services hich hich w w
of of ecifically, ecifically, there undersea cables currently servicing South Africa. five five 173 173 Sp are are
The The The The include include SEACOM, WACS, SAT- SAFE EASSY. WACS, WACS, and and 31WASC, 31WASC, se se
Yzerfontein Yzerfontein cables cables 31WASC 31WASC SAT SAT connect Africa at western coast South South the the to to
on on - -
of of cables cables South SA SA FE FE EASSY, EASSY, connect connect South South Africa, and SEACOM SEACOM the the to and and
of of coast coast Africa Africa Mtunzini Mtunzini South South the the east Africa Africa at at on on
number number of additional submarine 174.There 174.There cables projects with South African are are a a
of of of of the connections connections the the being planned completed in in period and and over over process process
These These include: include: review. review.
eventually eventually connect ACE ACE the the Europe cable, cable, which 174.1. 174.1. will Africa1l Africa1l to to
South South eventually eventually connect Atlantic Atlantic Express the the Cable Cable (SAex), which will 174.2. 174.2.
Africa Africa South South and and 14; 14; to to America America South South and and North
which which South South Africa 174.3 174.3 the BRICS cable, will will Russia eventually eventually connect to to
and and Brazil.1' Brazil.1'
Africa Africa
Broadband Broadband 25 June 2015 How South Available online international international bandwidth problem solved. solved. My My s s was was
bandwidth bandwidth ybroadband.co.za/newslbroadband ybroadband.co.za/newslbroadband /129072- africas- intemational https: https: //m how -south- -problem -was- -was-
lved.html lved.html Last accessed December 2017
11 11 r r
13 13 January January Work starts Available https://www.iol.co.za/businem- Business Business Report. cab online 2016 2016 ACE ACE 7 7 on on e e
196769f 196769f /workstarts /workstarts 2017 2017 accessed accessed -cable- -cable- Last Last !Companies !Companies December December resort resort 11 11 ace ace -on- -on-
TechCentral TechCentral October October Available online 2012 2012 Duncan Mcleod 16Tbitis SAEx cable deal signed 25 25
https://techCentral.co.za/16tbits-saex-cable-deal-signed/35811/ https://techCentral.co.za/16tbits-saex-cable-deal-signed/35811/ Last December December 2017 11 11 accessed accessed
arks arks The The of Available Available online: inside inside 2012 2012 Craig Wilson Cable the the 5bn 5bn $1 $1 TechCentral TechCentral story May May 3 3
/techcentral.co.za/ /techcentral.co.za/ the- the- -of- -of- 15bn / / -inside -inside -story cable /31530/ Last accessed December the the 2017 https: https: -brics- 11 11
This gazette is also available free online at www.gpwonline.co.za
STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 65
wholesale wholesale markets 175.The 175.The following for for prioritisation: prioritisation: not not identified were were
of of The The supply services services mobile mobile termination 175.1 175.1 (market (market W1); W1);
The The supply of international 175.2. 175.2.
roaming roaming services (market mobile mobile W2 well as as
of of potential potential segment segment market market R1); R1); as as a a
of of The The supply supply fixed fixed termination 175.3. 175.3. services services (market W4); W4);
The The supply supply 175.4. 175.4. of of origination origination fixed fixed and and call call transit transit (market W5); W5); and access, access,
of of The The supply supply Internet 175.5. 175.5. (market (market connectivity connectivity W7).
176.Fixed 176.Fixed
termination termination mobile mobile voice and and (market (market WI WI W4) W4) and and market both both are are
already already regulated regulated
through through section section and and 67 67 regulations116 regulations116 these these process process a a now now are are
periodic periodic review of of of of subject subject terms terms section 67(8) the to to ECA. ECA. in in
Authority's Authority's preliminary 177.The 177.The that that international mobile roaming services, view view the is is
including including wholesale international the the services services falling under market W2, roaming roaming nor nor
of of the the segment segment international international roaming retail retail services services that fall under market market retail retail R1, R1,
for for prioritised prioritised should should not be be for for following following market market review the the reasons: reasons: a a
that that The The parties parties benefit 177.1. 177.1. of of wholesale wholesale from from the regulation may may
international international roaming services (wholesale of of the the provision market market W2, i.e., i.e.,
wholesale wholesale services their foreign foreign MNOs and and to to customers customers by by South African
MNOs) MNOs)
not not South African. There is is competitive competitive are are no no or or consumer pro- pro-
welfare welfare that that justify justify of of regulatory argument argument the the expenditure effort effort this this in in may may
market market currently.
There There international international 177.2. 177.2. main components components of the the roaming charges two two are are
applied applied South African to to African African MNOs MNOs when those by by South consumers consumers
of of travel travel of Africa Africa market outside outside South South retail retail (a (a segment segment R1), R1), consumers consumers
being: being:
wholesale wholesale 177.2.1. 177.2.1. the foreign foreign input input provided provided by MNOs the South to to
African African This This charge MNO. MNO. be be
Authority Authority cannot cannot regulated by by the as as
Authority's Authority's foreign foreign outside the the the lie lie jurisdiction; jurisdiction; operators operators and and
This gazette is also available free online at www.gpwonline.co.za
66 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
mark mark 177.2.2. 177.2.2. the retail that that wholesale charged applied by by the -up -up over over
African African market for This This falls South South MNO. MNO. supply supply within within the the the the retail retail
of of mobile services (market R1). R1).
The The of retail retail prices 177.3. 177.3. portion portion for international roaming roaming by by South paid paid
Africans Africans principle, principle, regulated regulated the could, could, by by be be in in would would Authority, Authority, but doing so so
materiality materiality the the approach prioritisation meet meet the criterion criterion not not to to in in outlined outlined
of of minority minority of Africans suggests suggests that South South make earlier. earlier. This small small use use a a
international international roaming roaming services. addition, addition, who not business In In
users users are - -
of of people people have the option avoiding international roaming charges charges by
local local SIM card. roaming roaming charges acquiring acquiring However, However, given the high high current current a a
for for those those that little little choice, this market market subject prioritisation prioritisation have have to to be be in in may may
future future the priority the the subject subject current current markets market market have have been to to once once a a
review. review.
preliminary preliminary 178.The 178.The the the fixed fixed for for that that Authority's Authority's market market supply of view view the the the is is call call
origination origination termination termination and and services services (market (market W5) not not be should should access, access,
prioritised prioritised
market market review for for for following following the the a a reasons: reasons:
Authority's Authority's 178.1. 178.1. Sector Sector report (2017) most most recent State of found found the the ICT ICT that that
exceeded exceeded mobile mobile voice 2016 2016 in in fixed fixed voice by by six times; it it revenue revenue revenue revenue
of of accounted accounted for opposed total total voice 86% 86% 14% 14% for for fixed fixed voice to to revenue, revenue, as as
"7 "7 According According Statistics Statistics South Africa, 2016 2016 only 9.5% to to of of South South in in revenue. revenue.
African African households had had while while 90% 90% landline, landline, had had to to access access to to over over access access a a
therefore therefore mobile.18 mobile.18 voice Fixed Fixed is is material material than mobile voice less less revenue revenue a a
currently; currently;
178.2. 178.2. business business where managed managed fixed fixed voice material, level level at at is is VoIP VoIP more more a a
services services connections alternative alternative traditional broadband broadband offer PSTN PSTN to to over over an an
services services that have have made voice voice inroads inroads market. Reflecting into into the this, this,
Telkom's Telkom's fallen fallen fixed fixed voice volumes and and have have by by 26% and %, %, 17 17 revenues revenues
FY2017.18 FY2017.18 respectively, respectively, between FY2013 These These shown and and in in Figure Figure 3 3 are are below. below.
This gazette is also available free online at www.gpwonline.co.za
STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 67
of of The The prioritisation fixed fixed 178.3. 178.3. national national well well and and local local access access as as as as
metropolitan metropolitan transmission services likely likely to enhance VoIP competition are are
forward, forward,
competitive competitive going going placing increasing fixed fixed call call pressure pressure on on
origination. origination.
market market Once Once these market reviews complete, complete, this this be be are are can can
whether whether reassessed reassessed for for prioritised prioritised it it needs to not. not. be be or or
Figure Figure Telkom Telkom fixed 3: 3: traffic traffic to to voice voice from from and and FY2013 FY2013 FY2017 FY2017 revenue revenue
18 18 000 20 20 000 000
000 000 16 16 000 18 18
16000 16000 14 14 000
14000 14000
în în
12 12 000
c c
o o
000 000
12 12
_ _ 10 10 000
10000 10000
a a 000 000
IA IA
-0 -0
a a 000 000 c c
000 000 6 6
000 000 6 6
000 000 4 4
000 000 4 4
000 000 2 2
000 000 2 2
F12013 F12013 FY2014 FY2014 FY2015 FY2016
-Tot -Tot
subscription subscription voice voice and and Fixed Fixed revenue revenue usage usage
Source Source Telkom annual annual reports
financial financial Notes Notes (i) (i) i i April April Telkom's Telkom's is is from from the st st 31st March. year year runs runs to to the
179.The 179.The Authority's for for wholesale preliminary preliminary the view that that market the the the the is is supply supply of
internet internet connectivity (market
for for W7) W7) market prioritised prioritised
should should not be be review review on on a a
grounds grounds that competition the the market market unlikely unlikely exist this this in in current current concerns concerns to to are are on on
information information Authority. Authority. before before the the
180.There 180.There significant significant number of transit transit peering peering and and service service providers. Peering Peering a a are are
providers providers service service include include Vodacom, Vodacom, MNOs MNOs MTN MTN both both (e.g. (e.g. and and ISPs Cell Cell C) and
Internet Internet Solutions (e.g. (e.g. Transit Transit service service providers Vox Vox Telecom). and and include include Liquid
TeliaSonera TeliaSonera Telecom, Telecom, Cogent, PCCW, and and NTT.
181.Vodacom 181.Vodacom also indicates that peering peering
generally generally done settlement free is is with with no no
involved.' involved.' purchase purchase lease lease or or
This gazette is also available free online at www.gpwonline.co.za
68 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
183.The 183.The Authority's Authority's preliminary that that the markets identified the the view retail retail is is Appendix Appendix in in
should should be be for for market market reviews not not prioritised given given mentioned 1 1 in in that, that, the as as
discussion discussion of the the first first determine approach approach prioritisation, prioritisation, preferable to to it is to
whether whether regulation regulation required wholesale wholesale These These -ante -ante markets the the retail retail level. level. at at is is ex ex
include: include:
The The of supply supply 183.1 183.1 mobile mobile services (market R1); R1);
of of The The telephony telephony supply supply 183.2. 183.2. at at fixed locations (market voice voice R2); R2);
of of The The supply supply Internet Internet from fixed the the 183.3. 183.3. (market (market connections connections to to R3); R3); access access
and and
of of The The supply supply 183.4 183.4 managed managed data network services (market R4). R4).
of of the the licensees who responded Authority 184.Most 184.Most to to that that the the the the principle with with agree agree
wholesale wholesale the the markets markets preferred preferred markets prioritised. to to be are are
emphasises emphasises widely widely 185.Cell 185.Cell that, that, C C regarded regarded at best practice first "It "It is (i) (i) examine examine to to
underlying underlying markets that feed into into the the for for retail retail services services and form form the basis or or
products products (the (the
markets markets those those that upstream upstream least least having having defined defined the the are are as as - -
replicable replicable if if and and regulate markets and only regulation regulation inputs) inputs) these first, first, (ii) (ii) at at this this
level level inadequate, inadequate, is is retail retail market review review and possibly regulated associated (the (the to to
downstream downstream markets). "'
186.Vodacom 186.Vodacom effective effective that that if competition the the retail markets, not not is is in in proposes proposes
should should focus upstream upstream bottlenecks." "Regulation "Regulation 3 3 on on
"Regulatory "Regulatory 187.MTN 187.MTN states generally generally could effectively intervention intervention that, that, be be more more
addressed addressed targeting specific specific bottlenecks the the of of better better at at provision provision quality and the the in in
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 69
rather rather affordable affordable mobile services, services, general general interventionist than than adopting a a
approach. approach. "124 "124
188.Telkom 188.Telkom "Widely "Widely accepted principle notes notes that the, the, that that regulation should be be
targeted targeted the the market market wherever possible." possible." at at wholesale 125 125
that that there there keeping keeping with principle, principle, 189.In 189.In is is presently, presently, the the retail need, need, to to screen screen no no
markets markets
for for of of identified identified competition competition the the likelihood concerns. concerns.
190.This 190.This does
competition competition imply imply that there potential potential not not of of the the in in concerns concerns are are no any any
four four markets markets retail retail evident evident Appendix Appendix identified identified This discussion of the the in in in is is 1. 1. the the
for for wholesale wholesale market mobile mobile network services for for the the upstream upstream market and and RAN
Consideration Consideration of of features features structural structural services. services. given the the to to for for market market retail retail was was
mobile mobile services
wholesale wholesale features features likely likely these these also be be in in present present to to are are as as some some
upstream upstream activities, given of of vertically- vertically- integrated the the nature MNOs. MNOs. or or
markets markets identified these these the retail retail For For
191. 191. Appendix Appendix prioritised prioritised still still be be in in reasons, reasons, 1 1 may may
subjected subjected future, future, potential market reviews. This and and to to in in for for would would the the be be if, if, case case
example, example, market the the wholesale reviews reviews markets identified and and in in upstream upstream above
for for prioritisation of of these these regulations, regulations, the the introduction but lead lead to that that -ante -ante ex ex
regulations regulations generated -competitive -competitive impacts impacts the the retail at at -consumer -consumer or or pro pro pro no no level. level.
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70 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
APPENDIX APPENDIX IDENTIFICATION IDENTIFICATION MARKETS OF OF 1: 1:
different different markets electronic This This appendix provides identification the the the 1. 1. of of the the in in
communications communications of of for for sector sector assessment terms terms the the prioritisation exercise and and in in
reasoning reasoning behind their their identification. identification. the the
RETAIL RETAIL MARKETS
markets markets described this this 2. 2. The The markets which services section section include all all in in in are are
purchased purchased including business by by end customers. customers. and and -users, -users, consumers
supply supply of mobile mobile services market market retail Retail Retail The The R1: R1:
3. 3. of of This This market includes the retailing services, mobile mobile voice, data, and and SMS
delivered delivered all all mobile mobile network technologies, -types. -types. This to to all customer customer across across
geographic geographic market market national is is in in scope. scope.
of of Exclusion Exclusion fixed services
4. 4. similar similar of of excludes services services the the Inquiry, this market retail retail For For the purpose purpose any
network network technologies delivered delivered fixed fixed- fixed- wireless network network line line over over or or
technologies. technologies.
wireless126 wireless126 fixed- fixed- internet internet services excluded because -line -line and voice voice Fixed Fixed and and 5. 5. are are
these these technologies highly unlikely competitive competitive constraint place place the the to to are are on on a a
of of quality quality likely likely become prices prices and mobile services, this this is is in in the the time to to so so nor nor
applicable applicable Authority's Authority's market prioritisation 2021) 2021) period period to to the (i.e. (i.e. to to to process process
identification identification of single single The the the market. market. for for warrant warrant this this broad broad retail retail reasons reasons a a
of of markets markets separation separation follows: is is as as
demand demand limited limited fundamental differences -side -side substitution due due to is is 5.1. 5.1. in in
functionality functionality and services services price. price. Mobile Mobile voice data available available and and at at are are any any
of of mobility mobility which location location with network providing the benefit is is coverage, coverage,
that that something something replicated replicated be be cannot cannot fixed- fixed- wireless by by fixed -line services. services. or or
of of services services enabled This This applies equally the the all all other other devices devices by by mobile to to
128 128
highly highly likely that fixed- wireless services Although Although it is is substitute substitute -line -line services, this question fixed fixed be be to to can can are are a a
context context of assessed assessed properly potential market review the the in in note note that previous do place For For fixed fixed
now now we not a a cases cases
- -
wireless wireless mobile market (see for instance Commission Commission the the EC EC in in Decision, Decision, COMP/39.525 Telekomunikacja Polska,
Commission Commission .22.06.2011, .22.06.2011, 592 592 and EC 15, 15, Decision, Decision, Case AT.39839 Telefonica/Portugal Telecom, pp pp para para
that that
23.01.2013), 23.01.2013), difference between and, and, further, the the only fixed fixed wireless wireless that -line -line the the latter makes and and fixed- of, of, is is use use
of of delivery delivery "... "... wireless technology last mile that in in the connect connect enables enables subscribers fixed line network to to the to to access access
need need for cables." without without Review of (Ofcom (Ofcom 2014 the the
wholesale wholesale broadband markets Statement market the the access access on on
definition, definition, market determinations remedies." remedies." and and See 71) power power pg. pg.
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 71
that that accessed messaging services. location, location, including text at at be be For For any any can can
for for smartphone smartphone which which important segment South South are are consumer users, users, an an
African African of of additional additional services MNOs MNOs from perspective, the revenue revenue range a a
extends extends communication beyond beyond services, services, into such navigation well well areas areas as
location location -based services which built around mobility specifically. and and No No are are
fixed- fixed- wireless technology offer fixed fixed -line individual these these or or an an user user can can
additional additional services at multiple locations. addition, addition, large price between In In gaps gaps
mobile mobile fixed fixed and and exist exist voice voice at the retail data data prices and and level;'27 level;'27
supply supply unlikely -side -side substitution due due is is 5 5 2 regulatory regulatory barriers investment investment to to or or
requirements. requirements. Entry mobile operators fixed fixed limited into into by by line line is is due due to to
regulatory regulatory constraints, including including spectrum licensing constraints, well well as as as as
out out time time costs costs the the and and RAN. to to roll a a
for for further further segmentations segmentations the the No No of of the the Inquiry the the retail are are necessary purpose purpose as as
collective collective of services for obile obile market logical logical is is market market review a a purpose. purpose. a a
However, However, recognised that relevant the the be be it it it it is in context context South South African to to may may
segment segment of market market differences between between the the basis the demand -side this this on on
This This segments.125 segments.125 is is customer customer without without precedent. example, example, also also not For in in recent recent a a
set set of transactions transactions whereby Nashua Nashua Mobile of of disposed disposed service provider its its
business, business, Competition Tribunal "Tribunal "Tribunal the the ") ") ( ( subscriber subscriber considered considered post post -paid
a a
29 29 market market segment.
The The demand -side -side differences between the -paid -paid -paid and and 7. 7. post post segments segments are are pre pre
summarised summarised below. below.
Demand Demand conditions the the -paid -paid 8. 8. in segment segment differ markedly from the the -paid post post pre pre
segment. segment. Specifically, -paid -paid customers customers -sensitive to to price price than tend tend be be pre pre more more
post post the elasticity of demand this this -paid -paid customers, price price i.e., i.e., in in segment segment relatively relatively is is
for for This This partly partly because search switching much higher high. high. and and is is costs costs post- post- are are
paid paid
unlikely unlikely switch switch customers. customers. Once acquired, post post -paid is is customer customer to to to to a a
Additional Additional demand -side factors should
12 12 market market review These context context of assessed assessed include formal formal be be the the in in a a any any
of of the the characteristics differences differences in in mobile mobile and fixed fixed fixed -wireless retail packages; prices prices and quality; and in in in
of of preferences preferences document. patterns patterns the analysis ch outs outs de the of this wh wh and and
fa fa Is Is consumer consumer usage usage scope scope
t2° t2°
contrast contrast supply -side substitution that that there (voice, by by In In segment segment service service type type data to to may may mean mean are reasons no no
of of messaging), messaging), differentiation between network network technology However, there by by be be or or participants in this this may may sources
market market other other supply -side features such based based quality quality which stronger weaker network network they means means or are are as as on on
segment segment relative competitors competitors for another another to to one one
Proprietary Proprietary See See MTN and Nashua Mobile 129 129 (Case (Case 019018) 019018) Vodacom and the Vodacom subscriber base base Lim Lim ted No No
of of Nashua Nashua Mobile Autopage Autopage Cellular Proprietary Proprietary Proprietary Limited (Case 019034), 019034), Altech Limited and Nashua No No
019166) 019166) Mobile Mobile Proprietary Limited (Case No No
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72 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
another another particular particular MNO MNO in in
typically typically to to offer, offer, indeed and and only only response response switch a a can can
two two
customer customer churn churn As As result, in in once once every segment years. years. the the -paid is is a a pre pre
significantly significantly higher the the -paid than than in in
segment segment post post and and for for competition competition -paid -paid pre pre
customers customers be be oriented oriented towards price. price. may may more more
Post Post -paid 9. 9. customers customers tend tend
generate generate significantly higher ARPUs ARPUs than to to -paid -paid pre pre
significantly significantly larger customers, customers, by consuming volumes volumes of voice, voice, data, data, and
messaging messaging services. This
makes makes post post -paid customers, customers, valuable MNOs. MNOs. to to more more
This This matters in in context context where competition between MNOs MNOs partly partly determined a a is is
capacity capacity invest invest the the by by technology technology additional additional and and to to in in capacity capacity meet growing to to new new
for for demand demand services. services. new new
of of the the context potential potential 10. 10. In
market market review, review, be be it it appropriate appropriate consider the the to to a a may may
mobile mobile data mobile broadband broadband segment for for separately. separately. Demand mobile mobile data or or
diverge diverge from demand
for for mobile mobile voice and SMS SMS that that three three may may the the such such not not are are
always always demanded
bundle bundle at
the the retail level, demanded demanded bundle bundle not not as as or or to a a as as a a
the the degree they
have have been historically. same same This growth related related to to be be as as in may may
of of the the devices devices that for for enabled enabled addition, addition, data data only. In In the the differences differences use use in in are are
of of quality quality speed, speed, data data and and
services services MNOs result result coverage coverage in in across across may may
differences differences of of competitive conditions for for relative relative voice voice data data The The services. services. to to
potential potential
for for OTT services services provide
competitive competitive voice voice to to some some and and SMS pressure pressure on on
only only reinforce reinforce differences differences in in
for for competitive competitive conditions may may distinct distinct from data data as as
other other services the the
MNOs MNOs provide 11 11 their their domestic customers with international also also roaming roaming services,
for for
for for Whilst Whilst wholesale wholesale function function prices prices roaming the the voice, voice, data and SMS, be be may may a a
behaviour behaviour of other other jurisdictions, of of the the in in
operators operators the the retail margins placed top top on on
of of the the wholesale prices determined determined by the domestic These MNOs. MNOs. retail retail are are
constrained constrained of margins margins not by by the be be for for purchase purchase local local SIM card customers customers may may a a
their their requiring requiring SA SA mobile number number business business travelers) general (e.g. (e.g. by by access access on on nor nor
for for competition competition domestic services.
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 73
Authority Authority previously previously The The has has 12. 12. determined determined that OTT services services fall fall within the do do not
market market retail retail mobile
These These services services
of of services services after same same top as as all, all, are are on on an an
existing existing retail retail mobile service. In In addition, addition, OTT services cannot cannot constrain mobile mobile
data data services.
However, However, the in in
of of market market strength strength context context review, review, the of of a a any any
constraint constraint potential potential traditional traditional services voice voice and SMS OTT OTT presented presented mobile mobile on on by by
services services should considered. considered.
This This include would would be be assessment assessment of how how an an many many
customers customers such such services (e.g. (e.g. exclude exclude this this would of of access access 2G- enabled can can users users
the the handsets), handsets), of of relative relative quality services services such such unmanaged unmanaged VoIP (e.g. (e.g. usually usually is is
considered considered to to be quality quality considerations) separate separate market due due and and the the to to a a extent extent
which which to to customers customers actually of services services make make such such substitution substitution traditional traditional to to in in use use
of of
mobile mobile services OTT OTT (e.g. (e.g. for for opposed opposed voice voice calls messaging). messaging). use use to to as as
market market Retail Retail retail retail The The R2: R2: of of supply supply telephony fixed fixed voice voice locations locations at at
of of This This market includes the the retailing voice voice 13. 13. and and origination (receiving (receiving and and access access
calls' calls' making making voice 1) 1) the the fixed controlled controlled Telkom, -line -line PSTN, over over and and by by
managed managed VoIP services services delivered fixed -line fixed- fixed- wireless broadband and and over over
connections connections (including (including of of those those Telecom). This Liquid Liquid market market national national is is in in
geographic geographic scope. scope.
of of Inclusion Inclusion managed managed VoIP. VoIP.
The The inclusion of managed VoIP 14. 14.
services, services, which popular popular business business are are more among among
customers customers residential residential than than unlikely unlikely to materially customers, customers, is is influence influence the
consideration consideration for for of of market market prioritisation, prioritisation, this this included included should should but but be be for for the the
following following reasons: reasons:
managed managed VoIP 14.1. 14.1. services services likely likely be be similar similar perceived perceived PSTN PSTN to to to be are are to to
(narrowband) (narrowband) voice quality.132 quality.132 of of services services terms terms addition, in in In In most most managed
VoIP VoIP providers providers against for for compete compete Telkom voice voice services to to business
customers customers that operate Telkom's networks; networks; and and over over access core core
South South 14.2. 14.2. in in
Africa Africa which the the second national operator, operator, built -based IP IP network network an an
with with fixed- wireless last last licensed licensed mile mile specifically specifically to to compete compete access, access, was
against against the the PSTN in in
Telecom Telecom origination. origination. Liquid Liquid and and remains remains access access active active
130 130 41132; 41132; Gazette Gazette 3.1.1.1 3.1.1.1 No No
para. para.
' '
This This includes call call types, types, fixed fixed and mobile locations, locally, nationally, all all i.e. i.e. to internationally internationally
or or
'u 'u
Review Review Ofcom. Ofcom. 2013.
of of fixed fixed narrowband services Statement Statement markets markets the the
proposed proposed market market the the markets, markets, on on
- -
and and determinations determinations remedies. remedies. Para Para 4.158. power power
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74 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
This This market excludes 15. 15.
similar similar services services delivered retail retail mobile mobile network any any over over
technologies. technologies.
services services Mobile Mobile voice
Mobile Mobile 16. 16.
excluded excluded from voice voice services this this for for market market following the the are are reasons: reasons:
and and Quality Quality 16.1 16.1 of of characteristics characteristics fixed fixed voice voice connections connections voice voice Fixed Fixed
over over - -
superior superior services services consistent consistent offer offer quality (which (which is is time time and and not is is over over
either either affected affected location location by by the of of participant), participant), security reliability, reliability, and and and, in in
connections, connections, independent of of PSTN PSTN the the supply.'33 supply.'33 contrast, contrast, In In the the case case power power
of of mobile mobile depending quality quality calls calls location location and time due can can vary to to on on
cells.' cells.' 4 4 particularly particularly important congestion congestion individual individual This likely likely be be is is for for to to on on
business business customers. customers.
of of fixed fixed Complementarity Complementarity mobile mobile and voice voice 16.2. 16.2. Of Of those those South African
- -
households households with fixed connections, also also 99% 99% owned owned mobile connections in in
2015.135 2015.135
suggests suggests that mobile mobile voice This This fixed and and complementary complementary are are
services, services, rather than than
of of perspective perspective substitutes, substitutes, from the that that consumers consumers can can
actually actually choose choose between the the two.
Availability Availability 16.3. 16.3. -only -only households Many Many mobile
choice choice South South Africa have in in no no - -
unavailability unavailability between between mobile fixed, due
of of fixed fixed service, the the to to or or or or a a
prohibitive prohibitive and and ongoing costs (installation, line rental, etc.). Thus Thus the the access access
mobile mobile -only rate rate high high
of of indicate indicate households households South South Africa does in in not not a a
widespread widespread preference mobile mobile for for fixed fixed voice telephony.
over over
133 133 voice voice services PSTN PSTN ed ed
desired desired for systems which require continuous electrical supply, I I over over are are and
, ,
event event of wi wi such monitoring monitoring I I alarm alarm and systems, call centres See 2014. cut, cut, power power or or EC. as as a a
Explanatory Explanatory Accompanying Working Working Document document document Commission Recommendation Note Note the the
and and service markets et et
within within electronic communications the the sector sector susceptible regulation to to ante ex ex
Directive Directive 2002/21/EC h h
of of of European European Parliament and Council Council the the the the regulatory regulatory common common on on a a
and and Ironic Ironic communications networks services services Footnote 29, 29, 21 21
p. p.
o
mission mission 34 34 Staff Staff Working Working Document Explanatory Note Accompanying the the document Commission
relevant relevant product and and electronic electronic communications service service markets within the the sector sector susceptible on on to to
European European in in accordance with Directive 2002/21/EC
of of of of and and Parliament Parliament Council the the the the
on on a a
;on,=
framework framework for electronic communications networks
and and services. 21 21
p. p.
General General Household Survey Available Available 2015. 2015. 54
p. p.
..2«S -
æg.nm@a, §&ô%8%a .
2Jée\Æk§ \AkJ
The The figure of 99% derived derived from Is Is the the reported
seholds seholds with fixed mobile mobile connections connections and and fixed and and respectively. respectively. only, only,
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 75
Differences Differences There There difference price. price. also also the the 16.4. 16.4. in in is is for for especially especially prices, prices, in in a a
business business bulk bulk especially especially context where termination the the calls, calls, and in in rates rates
been been regulated towards towards have have cost. cost.
Unmanaged Unmanaged VoIP VoIP
Unmanaged Unmanaged 17. 17.
for for VoIP VoIP services market following excluded excluded from from this the the are are reasons: reasons:
Quality Quality Unmanaged VoIP services 17.1. 17.1. fixed fixed broadband connections
over over are are - -
quality.136 quality.136 subject subject variable variable to to
require require 17.2. 17.2. specific specific software and devices unmanaged unmanaged Users Users the the In In of of
case case a a - -
VoIP VoIP applications like like of of initiator initiator of the the receiver Skype, Skype, both the the the call and
the the appropriate software the the call must have hardware hardware able able to to and and be be to to
unicate.13r,138 unicate.13r,138
com com m m
for for retail retail need need 17.3. 17.3. The The
fixed fixed order order unmanaged unmanaged line line VoIP VoIP to to in in access access use use a a over over
broadband broadband
fixed fixed of of The The ability unmanaged unmanaged fixed
VoIP VoIP broadband to to over over - -
that that typically typically constrain constrain limited limited by the fact fixed fixed voice both both is is accessed accessed via via are are
connection connection the the customers customers cannot increase price price avoid avoid and and in in same same the the a a
latter.'39 latter.'39
Potential Potential segmentation customer customer -type -type by by
Further Further segmentations by by 18. 18. for for customer customer type type not the Inquiry. necessary necessary are are
characteristics characteristics recognized recognized However, However, the the it it is of of demand for that that and and access access
differ differ appreciably origination origination between between business customers customers and and household may may as as
with with -category -category included under customers, customers, the SOHO sub household customer customer the the
segment.140 segment.140
For For example, business customers demand fixed fixed 19. 19. to to voice services via via may may access access
digital digital technologies, and demand high- significant significant quality quality services with access access may
' '
Narrowband Narrowband Market Review Ofcom Ofcom 2017
proposed proposed market market Consultation Consultation markets, markets, the the determinations determinations power power on on
for for and and remedies wholesale wholesale
and and narrowband markets call call termination, wholesale call origination wholesale wholesale
access access
Para Para 2.14, 2.14, 18-19 p. p.
"' "'
Staff Staff Commission Commission EC. EC. Working Working Document Explanatory Note Accompanying 2014. 2014. document document Commission the the
Recommendation Recommendation
relevant relevant product and service markets markets within within electronic electronic communications sector susceptible the the on on to to
f/EC f/EC regulation regulation accordance accordance Directive 2002/2 European ante ante with in in
of of of of and and Council Council Parliament Parliament ex ex the the on on a a
regulatory regulatory framework for electronic communications networks networks and services common common 25 25 p. p.
' ' !bid !bid 25 25 p. p.
' '
proposed proposed Narrowband Narrowband Market Review Ofcom. Ofcom. 2017. Consultation markets, markets, market market determinations the the power power on on
for for and and remedies wholesale wholesale call termination, wholesale call
and and narrowband origination origination wholesale wholesale markets. markets. access access
Para Para
79 79 57; 57; 4 4 60, 60, 4.167, 4.167, para para p p p. p.
10 10
The The abandoned segmentation EC EC the the that similar contractual this this 2007 suppliers suppliers terms, terms, products, basis basis and and In In on on
customer customer These available available both both to to
types. types. factors would of investigated investigated the the need need to be in in market market review context context are are a a
conclusion conclusion before before similar similar reached reached for South Africa. Africa. be be can can a a
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76 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
of of flexibility degrees degrees and and support. Household hand, hand, other other customers, customers, the the are are on on
typically typically satisfied satisfied of of with with traditional analogue PSTN) the the the (in (in the the access access or case case
cheapest cheapest fixed- wireless solutions the the (in (in of of typically typically Telecom), Telecom), Liquid Liquid do do and and case case
of of not not demand support flexibility. Pricing larger levels levels high high business business customers to to or or
often often bespoke is is tariff tariff other other services) services) diverges from also also bundled with (and (and and and the the
that that apply filings filings residential residential smaller smaller customers. and and to to
20. 20. for for The The features apply apply demand likely likely VoIP to to services. services. Business to to same same are are
customers customers purchase purchase likely likely than household managed VoIP to to are are customers customers more more a a
service service (that PSTN), PSTN), purchase purchase sophisticated the the and and to to over over or or runs runs access access more more
service service packages from from Liquid Telecom.
supply supply of market market Internet retail retail the the Retail Retail The The R3: R3: to to fixed fixed from from access access
connections connections
market market includes This This the the retailing broad broad 21. 21. of of Internet customer services services to to all all access access
various various fixed technologies, including narrowband, types types via via asymmetric asymmetric access access
broadband broadband and and leased Internet Internet services This This market excludes lines. lines. all all access access
based based mobile mobile broadband technologies (including devices devices that enable nomadic on on
that that services, services, such mobile mobile broadband modems, and devices truly offer offer mobile mobile as as
smartphones). smartphones). This services, services, such geographic geographic market market national national is is in in and and as as scope scope
segmented segmented should should follows: be be as as
narrowband narrowband internet analogue analogue 21.1. 21.1. dial dial via via offer offer which which and and ISDN, access access -up -up
download download Whilst Whilst rapidly speeds speeds higher than than 256 kbps. this this is is service service no no
becoming becoming irrelevant, remains
it it for for service service offering as as now, now, a a
asymmetric asymmetric broadband broadband internet fibre, fibre, 21.2. 21.2. fixed-wireless fixed-wireless last via via access access copper, copper, or or
solutions141 solutions141 which which mile mile offers offers download speeds higher than kbps kbps and is is 256 256
other other features 'always 'always on', on', that that distinguish from from narrowband it it among among access
technologies. technologies. While and and -line fibre fibre fixed technologies technologies would copper copper access
likely likely the segment, potential potential market review should fall fall into into consider consider same same a a
whether whether fixed- wireless wireless technologies technologies should should included this this be be in in access access
Thus, Thus, potential further segment. segment. segmentation of this this segment, between
-line -line fixed- wireless, considered considered and and should fixed fixed the the in in market market context context of be be a a review. review.
This gazette is also available free online at www.gpwonline.co.za
STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 77
symmetric symmetric broadband broadband 21.3. 21.3. leased line symmetric symmetric internet internet which offers access access or or
download download and and upload speeds, transmission transmission guaranteed guaranteed speeds, and and
dedicated dedicated capacity, other features that distinguish from from narrowband it it among among
asymmetric asymmetric broadband and and technologies.l42 technologies.l42 access access
The The segmentation above broadly corresponds 22. 22. potential potential segmentation to to by by a a
customer customer type. type.
of of While While the 23. 23.
households households that fixed fixed internet services still still some some access access use use can can may may
of of asymmetric most most make dial dial services services fibre lines lines use use -up, -up, over over copper or access access
where where services available. available. such such are are
Similarly, Similarly, businesses businesses businesses businesses while while small small small 24. 24. still ISDN, some some most may may use use
asymmetric asymmetric SOHOs SOHOs and and fibre fibre where services services such such lines lines access access over over copper or use use
available. available. services services are are
Large Large 25. 25.
of of businesses, businesses, particularly those with multiple sites, make make leased leased lines, lines, use use
their their purchase of bundle bundle and and often leased managed managed network line line with data access access
services. services. Whilst points points of of not not leased lines due lack lack some some access may may to to use use a a
availability availability for for of of for for the the redundancy, redundancy, the main demand leased leased is is line line purposes purposes or or
access. access.
Exclusion Exclusion of mobile Internet access access
internet internet Mobile Mobile typically typically placed market.143 market.143 services services 26. 26. in in separate separate The The access access are are a a
that that speeds, speeds, main main data data allowances, allowances, service service quality differ and and reasons reasons are are
significantly significantly between between fixed fixed and and for for mobile mobile technologies. technologies. The as as access access reasons
of of intemet intemet expanded expanded exclusion exclusion mobile below. below. access access are are on
speeds speeds achieved achieved mobile broadband speeds 26.1. 26.1. different different
generally generally lower are are - -
speeds speeds achieved than than the the fixed broadband technologies, due due in in over over access access
part part due mobile mobile signals hampered being being indoors144, indoors144, network network to to and and to
UK UK regulatory practice, where Internet leased Th Th ine ine with distinct distinct market services services lines n n s s s s over over are seen as a a
Internet Internet asymmetric broadband services services ADSL. Ofcom. such such from from via of of wholesale wholesale See See 2010. Review the the as as
broadband broadband markets Consultation
and and market market market market determinations remedies. remedies. definition, definition, power power access access on 26 26 p. p.
of of Review Review Ofcom. Ofcom. 2013. (i) (i) 14 14 Broadband Broadband Access Markets 48-49. 48-49. Wholesale Wholesale the the pp. pp.
Staff Staff Working Working Commission Commission 2014. 2014. (Ii) (Ii) EC. Accompanying Accompanying Document Document Explanatory the the document Commission Note Note
Recommendation Recommendation relevant relevant product and electronic communications service service markets within susceptible the the sector sector on on to to
regulation regulation
of of of accordance accordance 2002/21/EC Parliament Council in in the European ante ante with Directive ex ex and the the on on a a
for for electronic electronic communications regulatory regulatory framework
networks networks and services, services, 35 35 -36. common common
pp. pp.
Hutchison Hutchison Austria/Orange In In 3G 3G Austria merging parties themselves conceded the the that, (lii) (lii) a a of of number number differences differences
between between
product product offerings suggest that fixed line fully fully substitutable mobile services services the the not not with data data services." The are are
proposition, proposition, concluding that substitution defining agreed agreed with this the the limited EC EC and the of of characteristic characteristic mobi mobi ity
suggests suggests markets should be kept separate (See Comp December dated dated that that /M /M 6497 the the two
2012 2012 18-19 18-19 12 12 ) ) pp pp
10' 10' of of Review Review Broadband Access the the Wholesale Ofcom Ofcom 2013.
Markets Markets 3.87 3.87 45 45 para para p p
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78 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
congestion, congestion, which that speeds actual actual typically typically well below headline means means are are
speeds;145 speeds;145 advertised advertised
data data allowances allowances monthly allowances allowances for broadband mobile mobile data data 26.2. 26.2.
services services - -
lower lower tend tend be be servicesi46, of of than than fixed fixed broadband to to the the in in even even case case
/LTE.147 /LTE.147 fixed fixed broadband 4G 4G In In general, general, packages allow for larger data data
'uncapped' 'uncapped' options frequently frequently allowances allowances also also and and available; available; are are
quality quality 26.3. 26.3.
of of reliability reliability services resilience resilience the the mobile broadband and and are are - -
"' "'
typically typically lower than than fixed.
26.4. 26.4. South Africa, In In with with greater future, future, -A -A rollout LTE LTE and LTE in in this this even even
differentiation differentiation between mobile broadband broadband likely likely services services fixed fixed to to and and is is
There There indication indication when how how persist. persist. is is spectrum spectrum constraints, which or or no no
already already
greater greater hamper hamper indicating LTE LTE rollout, will be be - - that that overcome overcome
mobile mobile broadband higher higher data data allowances and prices remain than than fixed will will
despite despite potential increases mobile mobile speeds. in in fixed fixed networks will addition, addition, In In
develop develop continue continue that that customers customers that ensuring ensuring South South African to to too, too, can can
currently currently choose between between fixed mobile mobile options options Internet Internet will and and access access
continue continue make of of of fact fact that that the majority the the South South both. both. Further, to to use use
Africa Africa households unable intemet intemet choose choose between fixed mobile and and to to are are
options options does indicate not not strong substitutability between the the two. For access access
households households business that and and do have clear clear that fixed fixed this this choice, and and it it is is
mobile mobile technologies technologies complementary. complementary. Internet Internet access access are are
supply supply of retail retail market market managed managed Retail Retail The The data R4: R4: network network services
This This market includes the provision the the 27. 27. of of business business -to- business retail retail (in (in sense sense
sales) sales) of
similar similar high- bandwidth MDNS MDNS leased lines and and over over any access access
technologies. technologies. enable enable corporate sites sites MDNS MDNS all all their their customers customers connect connect and and to to
applications applications geographic geographic business business enable communication various various locations locations the the to to in in
exchange. exchange. These and and data services services specifically designed meet meet the to to are are
requirements requirements of of the in in of of of customers customers prioritisation terms terms traffic, security speed speed
other other requirements. and and
14 14
ibid. ibid. 3.95, 49 para para p p
ibid, ibid,
11 11 3.90, 3.90, 46
p p para para
707 707
p.47 p.47 -48 45 45 !bid, !bid, 3.87, 94, 94,
para para 3 3 para para p p
148 148 Staff Staff Working 2014. 2014. Commission EC. EC. Document Document Accompanying Accompanying document Commission Explanatory Explanatory Note Note the the
Recommendation Recommendation relevant product and service markets electronic electronic within within communications communications sector susceptible the the on on to to
ante ante regulation in accordance
of of of of European European Parliament and Council ex ex with Directive 2002/21/EC the the the on on a a
regulatory regulatory framework electronic and and for for communications networks services, services, common common 35. 35. pg. pg.
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 79
geographic geographic in in -based -based MDNS MDNS VPN VPN national and and IP IP is is that that market market includes includes all all This This are are 28. 28.
scope. scope.
WHOLESALE WHOLESALE MARKETS MARKETS
and and which which complete markets markets all all in in markets markets described section include this this in in The The 29. 29.
providers providers
service service licensed licensed by by clearly- clearly- defined wholesale services purchased purchased as as are are
of of services. services. the the provision into into retail inputs inputs
services services of of supply supply mobile mobile termination Wholesale Wholesale market Wholesale W9: W9:
for for voice voice calls calls supply supply of termination services services This This market includes wholesale the the 30. 30.
inside inside South
that that terminate terminate each each MNO's network SMS's SMS's mobile location and and on on to to a a
wholesale wholesale voice into into and and market market segmented segmented should should be be Africa.149 Africa.149 wholesale wholesale This This
termination termination from international termination termination services. Furthermore, SMS SMS wholesale wholesale
Africa. Africa. those those terminating from within South should should segmented from from be be locations locations
services services inside
wholesale wholesale termination each each MNOts for for substitutes substitutes There There are are no
market market geographic national national is is in in This This South South Africa. scope. scope.
mobile mobile roaming of of supply supply international international Wholesale Wholesale Wholesale Wholesale market W2: W2:
services services
foreign foreign South South African -licensed MNOs to by by market market includes includes the provision This This 31. 31.
foreign foreign MNOs
termination termination services, that origination, origination, such such of of MNOs MNOs and and can can access, access,
their their customers customers while those customers to to services services voice, voice, data, and SMS are are offer offer
geographic geographic market market national national is is in in inside inside South Africa. This scope. scope.
network network services supply supply of mobile mobile Wholesale Wholesale Wholesale Wholesale market W3: W3:
of of services services supply supply network network wholesale wholesale by by MNOs mobile This This market includes includes the 32. 32.
network network services
demanded demanded by customer -type. The mobile that that be be any any may may
voice, voice, and data, data, SMS, wholesale wholesale include include the the level level typically typically demanded access access at at
geographic geographic market market national national is is in in "APN "APN services. This ") ") ( ( scope. scope. point point name name
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80 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
of of these these services Each Each 34. 34.
separately separately wholesale wholesale demanded demanded the the be be level, level, at at can can as as
opposed opposed the typical to to where where these three three (voice, the the retail retail level, at at case case services services
data) data)
demanded demanded together, SMS SMS often single single addition, addition, bundle. bundle. In In or or are are as as a a
customers customers seeking wholesale services services mobile mobile voice, voice, data, likely likely SMS SMS be be to to or or are are
differentiated differentiated of of from from customers seeking wholesale APN APN services. Because these
of of demand factors, factors, the lack of of -side -side substitutability of each each these informs services, services,
the the potential need factor factor segment segment assessment A A network network service this by by type. to to in in
the the of degree degree supply -side substitution would would be at at prevalent prevalent the wholesale level level
of of these these services whether conditions conditions supply between between and and similar similar for each are are
service. service.
Wholesale Wholesale Wholesale Wholesale market W4: W4: of of supply supply fixed fixed termination services
This This market includes the 35. 35. for for of of wholesale wholesale supply termination termination services voice voice calls to to
location location that terminate ECS/ECNS ECS/ECNS fixed fixed network network provides each each licensee's who who a a on on
services services :15° :15° Termination Termination inside inside South Africa international such such from from locations
segmented segmented should should from be be
those those terminating from within South Africa. There There are are
substitutes substitutes for each fixed operator's operator's wholesale termination services inside South South no no
This This market Africa. Africa. is is national geographic geographic in in scope. scope.
of of supply supply fixed fixed Wholesale Wholesale Wholesale Wholesale market W5: W5: origination origination call call access, access,
transit transit and and
market market 36. 36.
of of the the wholesale supply This This includes fixed (over (over narrowband call call access access
origination origination lines), lines),
transit transit services the the PSTN. call and and via Fixed access access access, access,
transit transit services origination, origination, and typically typically demanded bundle bundle at at the are are as as a a
wholesale wholesale This This bundle does include physical level. level. infrastructure. infrastructure. not not to any any access access
consider consider market market However, However, review would need need extent extent which which these the the to to to to any any may may
different different market market segments transit transit services form form (e.g (e.g supplied supplied be be may may
independently independently of the other This This market geographic services). services). national is is in in scope. scope.
Wholesale Wholesale market Wholesale W6: W6: supply supply of asymmetric broadband broadband
origination origination
market market includes This This 37. 37. wholesale wholesale of asymmetric supply supply broadband the the origination origination
services, services, fixed via via fixed- fixed- wireless technologies, -line -line includes and and also also or or access any any
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 81
backhaul backhaul services that that required interconnection allow allow to to between between the the wholesale are are
provider provider customer(s). customer(s). This market therefore includes and and its its bitstream bitstream services any any
provided provided by by of of wholesale wholesale provider asymmetric asymmetric broadband broadband origination the the (e.g. (e.g. IP IP
of of Telkom). Connect Connect the in in
This This geographic market market national national in in is is case case scope. scope.
Due Due the the 38. 38.
for for of of of potential potential segmentation market supply the the retail retail the the to to to to access access
Internet Internet from fixed the the
fixed- fixed- connections connections into fixed fixed -line and and wireless wireless access access
for for wholesale wholesale technologies, technologies, potential potential the the this market market segmented segmented to to be along along the the
would would lines lines of of market considered considered review. review. the the need need to be in in context context same same a a
Wholesale Wholesale market supply supply of Internet Internet Wholesale Wholesale W7: W7: connectivity connectivity
This This market includes 39. 39.
of of the the wholesale provision Internet connectivity peering peering via via or or
transit transit via via arrangements, arrangements, commercial commercial reseller arrangements. arrangements. This market is is or or
geographic geographic national national in in scope. scope.
further further This This market could 40. 40. potentially potentially segmented segmented by by be be customer customer tier tier -type, -type, the i.e. i.e.
provider provider at at which Internet sits sits whether whether determine determine into into peering will will it it enters enters an an
arrangements arrangements transit arrangements arrangements payee). payee). This (as (as or or potential potential payer payer or or
segmentation segmentation considered considered be be in in
of of context context potential market review the the it it is is can can a a as as
whether whether factual factual matter necessary
segmentation segmentation would such such to to be be a a as as or or
appropriate. appropriate.
The The markets 41. 41. described described markets markets this this section include all all in in in which which individual
network network
services services (access/connectivity upstream upstream transmission transmission services) and and are are
purchased purchased by by
licensed licensed service providers inputs into into of of the the provision the the as as
wholesale wholesale services services described retail retail above. above. For example, transmission transmission national national or or
services services wholesale wholesale input input into into the be be supply supply of asymmetric broadband broadband may may an an
while while rigination, rigination,
mobile mobile network services radio radio input input the the be be into into may may access access an an
holesale holesale retail retail of of supply supply mobile mobile network services. or or
markets markets describe specific specific groupings services, services, rather than of of of of types types network ese ese
facilities. facilities.
These These services services services that astructure astructure licensee included included the or or are are a a
downstream downstream provide provide only its its service service rather than third third to to parties. parties. to to own own
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82 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
VI: VI: International International Upstream Upstream market transmission transmission services services
This This market includes 43. 43. of of wholesale wholesale international international transmission provision provision the the services services
international international leased leased lines via via other other international transmission technology. and and any any
geographic geographic This This market national national is is in in scope. scope.
of of demand- On On the basis and 44. 44. supply supply -side substitution considerations,
segmentation segmentation of transmission transmission this this market by technology technology would would need to to be
market market considered considered context of the the review. review. in in The The transmission technologies main main a a
fibre fibre -optic -optic cables (sub- marine and and terrestrial), terrestrial), satellite, microwave and and links. links. are are
transmission transmission market market National National Upstream Upstream U2: U2: services services
This This market includes includes the wholesale 45. 45. of of services services provision provision national national leased line line that that
provide provide -bandwidth high high different different connectivity connectivity between distant locations (e.g. (e.g. cities) cities)
within within This This South South Africa.
market market includes dark fibre capacity, well well unmanaged unmanaged as as as as
managed managed transmission and and services services This market national national fibre. fibre. lit lit is is in in over over
geographic geographic scope. scope.
of of Potential Potential segmentation this this market 46. 46. fibre fibre services between between dark would and and lit
of of market market considered considered the need need to be be
in in context context factual factual question review. review. is is It It a a a a
whether whether the the
for for fibre fibre activated activated dark dark potential potential to to be constrains constrains services supplied over over
of of fibre fibre national Similarly, Similarly, potential segmentation lease lease lit lit lines. lines. fibre fibre national lit lit
transmission transmission services unmanaged into into managed managed services need and and be be to to may may
considered considered
in in
market market context context of the the potential factual factual question review. review. is is It It a a a a
whether whether unmanaged unmanaged national transmission services constrain managed managed national national
transmission transmission services. services.
connectivity connectivity market market Metropolitan Upstream Upstream U3: U3:
This This market includes the wholesale provision 47. 47. of of connectivity between between local local sites
-density -density within within urban urban high high sub -urban and and of of metropolitan metropolitan points and and areas areas
which which located within high high -bandwidth -bandwidth -networks -networks surrounding ring ring presence, presence, are each each
metropolitan metropolitan South South Africa. This in in market market includes dark fibre, whether area area
managed managed not. not. or or
transmission transmission above above the the of national 48. 48. As in in of of services, services, potential segmentation segmentation case case
metropolitan metropolitan connectivity fibre fibre within between between dark and services, services, fibre, lit lit lit and, and, is is
unmanaged unmanaged between between managed and and lit
of of fibre fibre context context services, services, potential the the in in a a
market market review.
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 83
market market This This 49. 49. is is
because because market likely likely regional regional to to be local in in dynamics dynamics or or scope scope may may
differ differ different local regional review review However, However, potential market across across or or any any areas. areas.
consider consider of of metropolitan connectivity should should whether whether regional regional geographic local local or or
market market dynamics sufficiently similar national national market. warrant warrant to to are are a a
market market Upstream Upstream services services Fixed Fixed U4: U4: access access
This This market includes 50. 50. of of services services the the wholesale provision local local last last mile access access or or
connectivity connectivity at at fixed location, enabled fixed- fixed- wireless technologies fixed fixed -line by by a a or or
of of microwave microwave technology), (incl. (incl. all all therefore therefore customers customers includes includes types. types. high high to to It It
quality quality typically demanded businesses businesses MNOs MNOs by by large terminating terminating (e.g. (e.g. access access or or
of of
and/or and/or segments segments microwave microwave links), leased leased lines and and -market -market mass mass access access
technologies technologies demanded asymmetric asymmetric households households and small businesses by by (e.g. (e.g.
lines).151 lines).151 broadband broadband access access
market market This This segmented segmented service type between: should should be be by by 51. 51. access access
Wholesale Wholesale which which 51.1. 51.1. refers local local wholesale wholesale services to to the that allow access, access,
the the local loop the defined defined and and via via is is connection connection between access access as as a a
customer's customer's premises and and
exchange. exchange. These connections nearest nearest local local the the are are
primarily primarily households households by by used used and and small small businesses; and. and.
Wholesale Wholesale quality quality wholesale wholesale refers refers high high 51.2. 51.2. the services services that allow to to access access
segments segments of irrespective the the terminating leased lines via via of of the the access access
technology technology provide provide leased used used dedicated dedicated capacity (and including to to or or
microwave microwave technology). These typically typically larger larger businesses used used by or or are are
Terminating Terminating segments MNOs. MNOs.
connect connect customer's customer's premises either points points to to a a
in in metropolitan metropolitan networks networks ring ring transmission transmission to to national leased line line or or
segments. segments.
Further Further segmentation between fixed -line -line 52. 52. fixed- fixed- wireless technologies and and access access
should should of of considered considered context potential potential the the be be in in market market review. review. a a
market market
the the This This local 53. 53. is is in in
delivered delivered services services local local and and level level scope scope as are are on on a a
of of differ differ conditions conditions competition market market review local local A by by consider consider may may area. area. can can
whether whether conditions of competition competition such such that that national national market defined. be be are are may may a a
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84 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
radio radio market market Upstream Upstream network network services Mobile Mobile U5: U5: access access
market market includes of of wholesale wholesale distinct provision provision This This the based based services RAN RAN 54. 54. as as
of of wholesale wholesale mobile from from the supply supply services making of of the entire mobile use use
network network (incl. (incl. network). network). This include national roaming services by by will will core core a a
that that other other licensed licensed MNOs MNOs lack lack the required RAN MNO MNO to to capacity capacity certain certain (mostly in in
rural) rural) However, also also include it it of of active sharing sharing the the provision RAN RAN areas. areas. may may
national national services services potential well well RAN for for that that invest their their MVNOs MVNOs in in access access as as as as
market market geographic geographic network. network. This national in in is is core core scope. scope. own own
below below summarises Figure Figure the the markets described 4 4 55 55 indicates indicates above, above, and the vertical
Authority Authority relationships relationships between them. them. Once the has of of made made decisions respect in in
of of these these markets, the the prioritisation it combine combine markets together, decide decide to to or or may may
of of segment segment context context potential potential markets, markets, the in in market market reviews. reviews. Potential
segmentations segmentations discussed discussed above but have have been the the table not not shown below. below. in in are are
of of links links Figure Figure Summary markets and and between 4: 4: them them
Matte Matte
radio radio US US
Upstream Upstream Ut Ut lA lA Yám+aláml Yám+aláml 1R 1R National Metropolitan Metropolitan
nIMaa nIMaa
accasa accasa
avates avates tranmBalm tranmBalm Markets Markets transmission transmission service CDrmeCtlMty CDrmeCtlMty aerates aerates d it ; 4 5 8 If lit . i I t 0,
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 85
APPENDIX APPENDIX GOVERNMENT GOVERNMENT 2: 2: POLICY POLICY
OBJECTIVES OBJECTIVES
The The South African government number development has has in in 1. 1. of of policy policy plans plans and and a a
documents documents emphasised key key policy objectives the the its its for for sector. sector. These plans ICT ICT
and and policies,
foregoing foregoing from from market participants, along along with the responses responses are are
informing informing this study critical critical in in for for market of of prioritizing prioritizing markets terms terms in in reviews. reviews.
generally generally The The key objectives focused focused have have of of -speed -speed the the provision high high and and on on
affordable affordable order order broadband broadband in in support support economic growth and which to to access access must
underpinned underpinned the the by by be be of of efficient efficient the the underlying utilisation utilisation These These infrastructure. infrastructure.
key key objectives explored explored in in this this appendix, drawing are are on: on:
The The National Development Plan Plan 1.1. 1.1. (2011) (2011)
Connect Connect (2013) SA SA 1.2. 1.2.
1.3. 1.3. DIPS DIPS The The (2016) Policy Policy Directive ICASA ICASA to to
DTPS DTPS 1.4. 1.4. Policy Policy (2016) National National ICT ICT
The The overarching framework 2. 2. for for Africa's Africa's policy policy South South ICT ICT contribution contribution and and its its the the to to
country's country's development is is set set out the the NDP published in in 2011. 2011. The NDP in in
specifically specifically identifies the the high
of of telecommunications telecommunications cost cost of of the the stumbling as as one
blocks blocks
Africa's Africa's development. South South to to These These the the provision costs costs linked to to of are are
efficient efficient infrastructure
aimed aimed promoting
growth growth and and at at the the in in of of lack lack economy economy a a
competitive competitive affordable affordable and and prices. this this In In regard regard stated that it it
"By "By
iCT iCT development development underpin underpin will will the 2030, 2030, of of and and connected connected dynamic dynamic a a
information information society and
vibrant vibrant knowledge that that inclusive inclusive is is and and a a economy economy more more
seamless seamless information A A infrastructure infrastructure will will universally universally prosperous. prosperous. available available be be
and and accessible accessible and will the the of of meet meet needs needs the the citizens, public public business business and the the
providing providing the the creation sector, sector,
of of and and consumption consumption to to of of access access wide wide range range a a
converged converged services required for effective effective
and and social participation economic economic at at - -
and and Africa's Africa's cost cost quality at least equal South South
and and competitors." main main to to a a peers peers
152 152 emphasis) emphasis) (own (own
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86 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
Africans Africans phones phones radio radio mobile mobile listen "More "More South (29 million) than (28 to to use use
million). million). Africa's Africa's ICT sector not not brought Despite Despite growth has has South South this, this, in in
of of universal universal full full communications affordable, affordable, the the services. to to The access access ranges ranges
performance performance of of ICT ICT most most interventions interventions sector state state the the has been in in
Africa Africa has lost disappointing, disappointing, South continental continental leader Internet status status its its in in as as
and and broadband prices prices remains connectivity. connectivity. The The of of services services and equipment a a
significant significant barrier fixed limited limited expanding expanding mobile phone and with with -line -line
to to use, use,
153 153 network network competition further increasing increasing costs." emphasis) emphasis) (own (own
economic economic and "Efficient "Efficient information infrastructure that growth promotes promotes greater
stronger stronger broadband inclusion inclusion requires and and telecommunications and network, network, a a
'454 '454 lower lower emphasis) emphasis) prices. prices. (own
strongly strongly emphasizes The The broadband broadband services national national NDP NDP 3. 3. at at to to access access
competitive competitive prices key key objective: its its as as
The The stated goal 2030 "make "make universally by by high 4. 4. is is to, -speed -speed broadband Internet
"155 "155 competitive competitive available available prices. prices. at at
economic economic infrastructure repeated repeated This This priced priced and is is objective: objective: "Competitively 5. 5. as as an
"156 "156 widely widely available available broadband.
SA SA CONNECT POLICY POLICY (2013) (2013)
Africa's Africa's national national broadband South South policy, policy, SA 6. 6. Connect157, Connect157, roadmap roadmap provides provides a a
detailing detailing how the South African government aims reach reach the broadband to to access access
goals goals forth the NDP. NDP. in in economic economic context of The The Connect set set overall overall SA in in is is one one
which which of of communication the the
cost cost constraint Africa Africa high high and South South is is in in is is seen seen as as a a
economic economic development competitiveness: competitiveness: and and global to to
Africa, Africa, "In "In South of of of always always -speed competitiveness competitiveness lack lack -available, -available, high the the
and and high quality bandwidth required by by public institutions and citizens citizens business, business,
impacted impacted negatively global country's country's development has has the the and and on on
"' "' 58 58 competitiveness. competitiveness.
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 87
key key observation SA SA Connect that fixed made made A A regard 7. 7. in is is broadband broadband growth this this in in
sluggish sluggish superseded superseded broadband due due costs being being by mobile high high and to to is is is growth. growth.
Despite Despite this this growth growth mobile mobile broadband South Africa's penetration has declined in in in in
comparison comparison countries. SA SA to to other similar Connect notes notes that:
of of fixed fixed broadband services relatively slow slow deplovment "The "The (ADSL), (ADSL), and and its
meant meant that last last broadband rapidly became costs costs mobile mobile high high the five five over over years years
primary primary broadband broadband form form the the of of rather rather providing providing complementary than than access; access; a a
fixed fixed it it has services services service service economies. done done to to mature mature Despite this take- take- in in as as
off off
Africa's Africa's broadband penetration remains mobile mobile broadband, South South in in to to poor poor
of of other other that that lower- lost lost middle middle income Africa Africa status countries. countries. South has its as as
leader' leader' broadband broadband and and and last the the `continental `continental in in two two decades has Internet, Internet,
"159 "159 ICT ICT Africa's Africa's steady indices indices decline decline South South global global emphasis) emphasis) (own (own seen seen on on
of of relevant relevant stated SA SA Connect Connect The The objective following: the the 8. 8. is is
broadband broadband nationally "Affordable "Affordable available of of meet meet needs public the the diverse to to
and and private and both both formal informal, informal, "160 "160 sector sector and citizens. citizens. consumers consumers users users
Connect Connect identifies following following constraints SA SA the the 9. 9. terms terms of the infrastructure in in
of of supporting supporting the provision broadband services:
Domestic Domestic backbone backbone National National Long Distance Networks. There There 9.1. 9.1. is is or or
limited limited competition of of increase increase remote remote South South Africa. Despite in in in in areas areas an an
competition competition major major national with with consequent consequent routes routes price price reductions, on on some some
other other routes uncompetitive uncompetitive resulting the have have remained in in connect connect cost cost to to
locations locations remote remote remaining Distance Distance networks including National National Long Long high. high.
Dark Dark Fibre Africa, Telecom Telecom elements of have have FibreCo FibreCo and Liquid do do
wholesale wholesale focused focused and and main main but but leaves leaves centres. centres. This access access open open are are on on
significant significant underdevelopment underdevelopment Africa Africa which South South due due rural rural in in in in the the to to areas areas
of of legacy legacy infrastructure;161 infrastructure;161 Apartheid Apartheid have have limited
Metropolitan Metropolitan networks. There There lack lack 9.2. 9.2. is is of of development of infrastructure in in a a
misalignment misalignment townships townships driven between between metropolitan by by operators operators and and a a
agreed agreed of of network network national national distance municipal municipal models. models. Like Like the the long in in case case
networks, networks, infrastructure township township metropolitan metropolitan remains underdeveloped in in
legacy legacy of Apartheid. due due the However, due the the lack coordination coordination of of to to areas areas
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88 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
of of wider wider infrastructure infrastructure agreed agreed between between operators provision provision models, models, the and and
with with line line in in limited.762 limited.762 Connect Connect Africa's Africa's broadband goals SA SA also South South is is
recognises recognises that municipalities directly influence the the environment environment for the the
other other infrastructure infrastructure -out -out through granting granting of wayleaves land land and the the roll roll and and
Whilst Whilst property property there there this outcome not rights. rights. is is are are some successes, usage usage
consistent consistent municipalities.'63 municipalities.'63 across across
Access Access networks. 9.3. 9.3. Mobile Mobile though extensive, limited limited urban is is to to coverage, coverage,
at at focuses lucrative Mobile Mobile mechanism urban costs. costs. high high areas areas access access on on
with with township township underserviced being being being serviced at high data areas areas areas areas or
specifically specifically SA SA Connect that that extending broadband costs. costs. notes is is access access
dependent dependent the the following: on on
of of demand demand and allocation allocation high high "The "The spectrum; spectrum;
provision provision high high "The "The tower tower density requires additional which which on on
"164 "164 by by investment investment operators operators mobile mobile
only only Telkom ADSL ADSL provided provided 9.4. 9.4. by by is is for for wholesale wholesale with with limited scope scope
competition competition other Internet service service providers. SA Connect by by notes notes that
number number of ADSL subscribers relatively relatively Telkom Telkom that other small small and and has has a a
Internet Internet their their product offerings service service providers limited limited and service in in are are
of of given given the and point network.'65 network.'65 interconnection interconnection cost cost the Telkom to to
wireless wireless limited limited only only available limited limited 9.5. 9.5. Fixed and is is in in FTTP FTTP and and is is areas areas very very
costly.'66 costly.'66
T T ) )
Minister Minister of Telecommunications March March 2016, the 10. 10. In In Services Services and and Postal
"Minister "Minister issued issued policy directive prioritisation prioritisation ") ") ( ( to to ICASA relating the the of to to a a
for for market market broadband broadband markets review a a
This This directive for for effective competition broadband broadband markets emphasises emphasises the the need 11. 11. in in
through through established policy government government documents which include SA SA the the NDP and
Connect. Connect. More specifically: - -
This gazette is also available free online at www.gpwonline.co.za 89
Electronic commencement contemplated effective the knowledge of cost directive ensure in universal and approved technological universal Africa's Directive cost following 446 3 3 by for the from SA service Paper- a Paper published framework below: high to at No. 41 policy ensure achieve South derived the inquiry the White White accessible the universal as and of on outlined has been Policy a digital and the Policy identifying states the the regulations 3(2) ") issued to placed to and an scientific Paper strategies policy Paper in prioritise ICT 1CT Policy cited Act of section highlighted innovative are services achieving Minister Integrated Integrated conclusion prices Minister Communications emphasis further "White overarching study as online
to of to of extends cited "'68 prescription 2817] National National 2005) broadband The Available terms ( The White is converged market the hindrance are Paper in inclusive and is November particular competition markets. issues. documents, (2013) growth of peers;169 2016 2016 "An in and paper. commencement The NDP priority 36 White "170 0 directed, Services Services outlines, the Electronic an 27 No. reinforces "major markets. white things. making -side Plan 6 FEBRUARIE 2018 6 FEBRUARIE high economic Policy 1 a accessed broadband and into Policy Africa's this is of policy policy supply Postal Postal Development hereby ICASA: inquiry There Africa a other between Connect 2005 (Act to role 71 broadband, broadband ICT [Last as ICT relevance the 2016, it and and South and key the infrastructure approves Internet the doing, amongst Act, South Telecommunications Telecommunications Integrated NDP. in is an of to competitiveness prioritise Authority competition September of access, to directive Communications 67(4) linkages pg.3 STAATSKOERANT, STAATSKOERANT, Cabinet conclusion National comparable of so the SA the of in
broadband to 11 11
of these 1.2, progress, N 12 competition transformation areas In , pg. through pg section and access National cabinet.17 para. to and pg 2817. This gazette is also available free online at www.gpwonline.co.za The and policy 72 2 1, ICASA 1 1 the the in Connect of effective society. of 2 1 1 1 service access the basis "2.1 and TechCentral Department Department DTPS para para para 2016 2016 at 11.2. 11.1. such in The The key On by at at at to October October Mid lbld lbid 14. 13. 12. 69 189 70 " 'M "'
90 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
of of of telecommunications telecommunications The The impact dynamic nature nature the the 14.1. 14.1. markets markets on on
competition competition highlighted highlighted the South African landscape. with with is is respect respect to to
Digitisation, Digitisation, and and technology technology changes changes impact in in convergence convergence on on
framework framework for telecommunications telecommunications market competition.14 competition.14 and and the structures structures
that that market previously distinct The The result definitions evolve services services is is as as
become become substitutable. These changes telecommunications telecommunications markets markets in in can can
following following implications have have the competition: competition: on on
(i) (i) Certain Certain ante competition interventions be be relaxed due to to ex ex can can
having having choice.175 choice.175 greater greater consumers consumers
(ii) (ii) New competition competition practices arise arise due to to like like concerns concerns can can
of of bundling bundling content content higher which which result prices prices services, services, and and in in
difficulty difficulty switching switching providers.16 in in
The The vertical integration (iii) (iii) of of content content telecommunications and and
providers providers also also give rise around around limited limited entry by by to to can can concerns concerns
power.'" power.'" entrants entrants enhanced enhanced market and and new new
To To mitigate these the 14.2. 14.2. "more "more White White Paper suggests nuanced, nuanced, concerns concerns a a
rather rather proactive proactive and informed shift shift ante ante competition regulation than to to ex ex a a
regulation" regulation" of of post post fair fair reviews reviews individual through through "regular competition in in ex ex
markets markets and require ongoing also also of of of relevance relevance assessment assessment traditional the the
market market taking taking into account substitution definitions, definitions, ""S and and services. services. new new
particular particular The The White Paper places focus focus 15. 15. infrastructure infrastructure supply and and -side access access on on a a
Challenges Challenges issues. issues. the provision in in which which highlighted broadband broadband include: include: are are
ineffective ineffective competition, supply bottlenecks, duplication of of infrastructure, infrastructure, and and
inefficient inefficient of of Further, Further, limited spectrum spectrum to to is is access access scarce scarce resources. use use seen seen as as
barrier barrier the mobile data data in in White White Paper Paper states segment. segment. this regard, the In In a a
current current particularly infrastructure infrastructure "The "The market, market, relation relation to to in in
by by broadband broadband fundamental market characterised characterised is is of of problems problems
ineffective ineffective infrastructure infrastructure sharing bottlenecks, competition, competition,
duplication duplication of of of of and and inefficient infrastructure, infrastructure, unnecessary unnecessary use use
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STAATSKOERANT, 16 FEBRUARIE 2018 No. 41446 91
rolled rolled networks networks Multiple Multiple have have been the out out scarce scarce resources. across across
with with deployment deployment skewed towards where where urban urban country, country, areas areas
infrastructure infrastructure duplication particular particular is is prevalent. Competition, in in in
broadband broadband mobile mobile the the market, market, of of by by number number limited limited players players is is the the
"19 "19
frequency frequency that that have have to to spectrum spectrum access access scarce scarce resources. resources.
According According White White the the 16. 16. market market characterized Paper, Paper, the broadband by by strong to to is is
vertically vertically integrated integrated players and and who who their their competitive competitive advantage through possess possess
The The White of of infrastructure infrastructure infrastructure Paper Paper speaks ownership. ownership. the the following
ownership. ownership.
Backbone Backbone infrastructure component of broadband broadband critical critical the (i) (i) as as a a
of of infrastructure infrastructure service service enables last provision. provision. mile mile Most Most it it as as
infrastructure infrastructure this this is is Telkom Telkom which connects owned owned cities, cities, by by
replicated.18o replicated.18o towns towns and villages. This infrastructure cannot cannot be be
infrastructure infrastructure being being (ii) (ii) Metro the the incumbent largely largely owned fixed fixed by by
fibre fibre municipalities municipalities operator, operator, despite recent investments by by in in
of of private private entities. Challenges identified regulation, and and lack are are
of of coordination rollout rollout resulting duplicated lack lack in in in
insufficient insufficient infrastructure, infrastructure, inefficient utilisation of and and and
infrastructure.' infrastructure.' network network
infrastructure infrastructure bottleneck identified identified the the largest (iii) (iii) Last mile is is
as as i i
provision.' provision.' broadband broadband service distinguished 2 2 Issues Issues based are are
the the medium through broadband broadband services which which the last mile on on
further further Last Last mile infrastructure characterized characterized follows. follows. is is occur. occur. as as
-based -based last broadband broadband markets mile mile Fibre Fibre concentrated concentrated in in are are a. a.
uncoordinated uncoordinated fibre fibre rollout which urban urban resulting is is in in and and areas, areas,
areas.183 areas.183 commercially- commercially- duplicated duplicated viable Further, Further, rollout in in in
-existent -existent rural rural areas areas are are non Fs' 2
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92 No. 41446 GOVERNMENT GAZETTE, 16 FEBRUARY 2018
of of last last broadband mile mile Wireless Wireless consists this this market b. b.
access access - -
apply apply for licensees licensees which Only Only could could 400 400 spectrum. spectrum. over over access access
operators operators six six have mobile however, and and to to spectrum, spectrum, access access are are
self self -supply vertically vertically -integrated firms which which supply supply and and
favourable favourable externally externally only which which skews competition
terms, terms, at on on
2 2 the the service level. level.
of of The The White Paper further key applications of the the the the 1. 1. proposes proposes access access open open
establishment establishment of assignment of approach approach WOAN involving involving the the and and as as a a
spectrum. spectrum. specifically: specifically: More More
demand demand high high will will All All 1.1. 1.1. spectrum spectrum assigned assigned basis basis and be be all all open open access on on an
currently currently unassigned allocated allocated will will be be this way;3 way;3 spectrum spectrum
The The WOAN public public -private will will 1.2. 1.2. be be sector sector -owned managed consortium and and a a
of of consist consist interested interested participating including entities entities that and and will in in holders holders are are
of of /or /or infrastructure infrastructure companies private ECNS ECNS licensees, ECS ECS and firms firms equity equity
MVNOs;4 MVNOs;4 investors, investors, SMME's, OTT OTT players ISPs, ISPs, and and
for for of of The The regulator responsible licensing licensing WOAN. the the the 1.3. 1.3. is is The The speedy
of of WOAN WOAN licensing licensing meeting 2020 2020 key key SA the the the in in is is targets targets set out to to
NDP;5 NDP;5 Connect Connect the the overall visions 2030 2030 and and out out set set the the in in
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