Bandwidth conundrum in South Africa « Broadband « MyBroadband Tech and IT News

Rudolph Muller

July 29, 2011

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National bandwidth costs are currently undoing the benefits of cheaper international bandwidth in South Africa

South Africans rejoiced in July 2009 when SEACOM arrived in South Africa, breaking Telkom’s SAT-3/SAFE monopoly in the international bandwidth market.

Savings were slow to filter down to consumers, but towards the end of 2009 ADSL data prices started to plummet. SEACOM also made it possible for MWEB to launch affordable uncapped ADSL packages for the first time in SA.

In July 2010, a year after SEACOM arrived in South Africa, EASSy launched commercial operations in the country. The impact of EASSy was far less significant than SEACOM, but the additional bandwidth and added redundancy is of great value to the country.

With the 5Tbps WACS cable set to become operational in the first half of 2012, South Africa will become awash with international bandwidth. However, another bottleneck is now a stumbling block to further bandwidth and broadband price cuts.

National bandwidth remains expensive and this was one of the reasons why MWEB decided to stop paying for local transit in October 2010.

The problem with national bandwidth costs are clearly illustrated when considering the price of carrying bandwidth to Johannesburg from the SAT-3 landing station.

Internet Solutions’ Derek Wilcocks explains that it currently costs them more to carry bandwidth from the landing station in Melkbosstrand (near Cape Town) to Johannesburg, than from London to the landing station.
The high cost of national bandwidth is clearly undoing much of the benefit of lower international bandwidth rates, but the good news is that there are numerous projects under way to change this situation.

Vodacom, MTN and Neotel have joined forces in rolling out a national fibre project; Broadband Infraco still has plans to fulfill their mandate to bring down national bandwidth costs; and FibreCo is set to start building their planned national fibre network soon.

SEACOM also announced recently that they have invested R100 million in additional South African infrastructure to meet the continuous high growth in demand for broadband services and applications.

The investment includes the purchase of physical optical fibre links from Dark Fibre Africa (DFA) as well as installing the equipment required for SEACOM to manage the network linking KwaZulu Natal’s coast (where the SEACOM marine cable lands) to two redundant Points of Presence (PoPs) in Gauteng.

Initially, 100 Gigabit per second (Gbps) of the fibre will be lit (using current 10Gbps technology) and a further 20 waves are expected to be lit within the next 12 months.

All of these projects should results in far lower national bandwidth rates and far better redundancy – similar to what South Africa experienced over the last two years in terms of international bandwidth.

Africa undersea cables projection - 2013 - Image courtesy Many Possibilities

Cut the red tape, Plessey urges gov’t | TechCentral

Howard Earley

Government needs to make it easier for telecommunications operators to build infrastructure, especially fibre-optic networks, as red tape and conflicting requirements are slowing the ability of companies to build broadband networks.

Howard Earley, chief operating officer at Dimension Data subsidiary Plessey, says receiving the necessary environmental approvals and permits from municipalities and the department of water affairs to build fibre networks is becoming a big issue.

“There’s not a uniform environmental standard from one metro to the next and no uniform mechanism from the department of water affairs,” Earley says.

Earley says that although it’s important for regulations to protect the environment, new and uniform rules are
needed to guide fibre projects. Plessey is responsible in large part for the Vodacom, MTN and Neotel fibre build between Johannesburg and Durban and Earley says the project has been delayed because of outstanding licences from water affairs. “The consortium can’t get them and until they do that link can’t be used for the purpose it was intended.”

Different rules from municipalities have also slowed progress. “If you get to a bridge, one guy will say hang it under the bridge, while the next will say they want in-road trenching, and so it carries on, so there is no universal approach.”

Earley says the country would be “much better served” if there was one standard which operators were expected to adhere to.

Even within big metros, there are sometimes conflicting requirements, he says. “It would be very good if there was one overall body that decided on the standards and what was required and who the issuing party would be in terms of giving you the licence to operate.”

One way this could happen is if one central government department took ownership of the issue, though Earley admits this could take time. He feels it’s an issue the department of communications should deal with in its forthcoming broadband strategy document. “If we could just get the bigger metros to agree [on standards], that would be first prize.”

Elsewhere in Africa, environmental impact approvals are not nearly as stringent as they are in SA, but Earley thinks that in many of these markets the rules are too lax. “There should be some minimum requirements.”

— Duncan McLeod, TechCentral

Telkom giveth and Telkom taketh away | TechCentral

— Duncan McLeod, TechCentral

Telkom is cutting the line rental cost of its mid-tier, 1Mbit/s fixed-line broadband product by 11,3% to R289/month on 1 July, from R326/month previously. Broadband line rental for 384kbit/s and 4Mbit/s users remains unchanged, the company says.

At the same time, Telkom is hiking its basic line rental — which broadband users also have to pay — by 5% from 1 August. Telkom residential customers now have to fork out R139,97/month and business customers R191,84/month per line. This means that, apart from users on the 1Mbit/s service, fixed-line broadband subscribers will have to fork out slightly more for the service.

Telkom filed its annual tariff adjustment with the Independent Communications Authority of SA (Icasa), which must approve the proposed new tariffs before they can be implemented. Because they fall within what’s allowed, Icasa is expected to rubberstamp the changes.

Friday’s filing also shows that Telkom is passing on some, but by no means all, of the benefits of the 1 March reduction in wholesale mobile call termination rates — the fees mobile operators charge other players to carry calls onto their networks. The rate was reduced in peak times from R1,47/minute to R1,40; in off-peak, the rate has declined from R1,17 to R1,12/minute.

At the beginning of March, peak-time mobile termination rates for mobile calls fell from 89c/minute to 73c/minute, with off-peak rates coming down to 65c/minute from 77c/minute.

Telkom is reducing tariffs for all long-distance calls as well as standard-time call charges for local calls. It hasn’t specified by how much local call charges are being reduced by and a Telkom spokesman wasn’t immediately able to provide the quantum of the reduction. The local, per-minute call charge during off-peak times remains unchanged.

In broadband, the company is not changing the monthly subscription fees for its Do Broadband bundles. From 1 September, customers who subscribe to Do Broadband 2 and 3 bundles will receive an additional 1GB of bandwidth for the same price. It’s also introducing a new bundle costing R395/month and offering a 1Mbit/s line and 5GB of monthly data.

In the case of its Closer calling plans, Closer 1 will increase from R150 to R158/month and Closer 2 from R170 to R177/month. Closer 3 remains unchanged at R333.

Icasa delays publication of unbundling document

— Staff reporter, TechCentral

The Independent Communications Authority of SA (Icasa) has delayed publication of a discussion document on the unbundling of Telkom’s local loop of copper cable infrastructure by up to two weeks.

In a terse statement issued on Friday, the authority says it has decided to postpone publication of the document “for a period of up to two weeks” to allow it to “finalise the finer details in the actual document”.

Icasa had been expected to publish the discussion document in the Government Gazette this week. Communications minister Roy Padayachie has said he wants the local loop unbundled by no later than November this year. Unbundling would give rival operators access to the Telkom-owned copper cables that connect consumers and businesses. It’s seen as a way of reducing broadband prices and stimulating competition.

Icasa councillor Thabo Makhakhe, who is one of the members of the team tasked with dealing with local-loop unbundling, has said the authority would create a document that clarifies what aspects of the local loop other operators will have access to.

The authority has not provided further details as to why it felt the need to postpone publication of the discussion document.

Icasa moves on local loop plan

— Candice Jones, TechCentral

Telecommunications industry regulator, the Independent Communications Authority of SA (Icasa) will publish a discussion document this week in the Government Gazette outlining its thoughts on unbundling Telkom’s local loop, the copper lines that connect homes and businesses to the operator’s network.

Icasa has been working on a document to clarify its position on local-loop unbundling after suggesting Telkom’s copper infrastructure is already available to other players. “The discussion document was created by the committee dealing with local-loop unbundling,” says Icasa spokesman Paseka Maleka.

The authority told TechCentral in January that since Telkom’s local loop is considered an essential facility under the Electronic Communications Act, facilities leasing regulations, published in 2010, already allow rival operators access to it.

Icasa councillor Thabo Makhakhe, who is one of the members of the team tasked with dealing with local-loop unbundling, has said the authority would create a document that clarifies what aspects of the local loop other operators will have access to.

Telkom has slammed Icasa’s proposed use of facilities leasing regulations as a means of unbundling the local loop, saying its understanding of the legal definition of an essential facility is that it “cannot feasibly be substituted”. However, Telkom argues the mobile operators have created a substitute, which it calls the “wireless local loop”.

A complaint by Neotel appears set to be Icasa’s litmus test for using facilities leasing regulations. Neotel wants access to the local loop in terms of the regulations, but Telkom has denied its rival access.

The outcome of the complaint is still unknown, but it could make or break Icasa’s hopes of meeting a deadline set by communications minister Roy Padayachie to have the local loop unbundled by November.

ICASA commits to local loop deadline

By Leigh-Ann Francis
Johannesburg, 6 Jan 2011

This is despite Telkom's warning that the deadline is unrealistic, given the regulatory challenges and lack of clarity holding back the process.

However, the Independent Communications Authority of SA (ICASA) maintains the regulatory process for ensuring the LLU implementation will unfold during the course of 2011, through a full public consultation process, to iron out any “uncertainty”.

The last mile, or local loop, is the copper link between the end-user and Telkom's network, and is currently owned by Telkom.

The rationale behind LLU is to foster competition and reduce telecommunications costs by eliminating large investments by competitors to build their own infrastructure for last mile connectivity.

Telkom, a key player in the process, argues that a number of regulatory issues need to be clarified before the unbundling can get under way. However, ICASA says it is aware of the issues raised by the incumbent and remains confident of the November deadline.

Clarification

The operator's main concern lies in the lack of clarification as to whether the local loop can be considered an essential facility.

“Notwithstanding that the Electronic Communications (EC) Act includes local loops in the indicative list of potential essential facilities, it is arguable whether the local loop is indeed an essential facility,” argues the operator.

“Specifically, the EC Act states an essential facility 'cannot feasibly be substituted' and it is Telkom's contention that a wireless local loop these days is more than a substitute for both voice and broadband communications,” argues Telkom.

But ICASA says it is well aware of the ramifications around the definition of essential facilities vis-à-vis LLU and will address the issue in due course, in line with the set time frame.

“What, however, is critical, from the point of view of the authority, is to ensure access to the LLU is facilitated. In any event, the local loop, as a facility, is already legally obliged under chapter eight of the EC Act.”

Telkom also argued against the lack of clarification around how the authority would conduct and conclude a market review process for LLU. But ICASA explains it will explore the relevance to LLU of section 67 of the EC Act, in terms of significant market power and related numbers.

While ICASA has renewed its commitment to ironing out the necessary regulations before November, senior Frost & Sullivan analyst Vitalis Ozianyi remains sceptical of the actual implementation of the regulations this year.

Complicated process

Ozianyi maintains that, despite the issues raised by Telkom, it is possible the regulations concerning LLU will be in place this year still.

However, he questions whether the regulations will have the necessary clarification to begin the implementation of LLU this year.

ICASA councillor Thabo Makhakhe explains that, while the authority is committed to having resolved the regulatory issues, and the possible publication of LLU regulation before November, the actual unbundling process will take time.

Makhakhe would not indicate how long the implementation would take, but stated it is a complicated process. He pointed to the 10-year period it took British Telecom to unbundle its local loop.

Ozianyi argues that other LLU-related issues, such as the costs of leasing the local loop, as well as maintaining the infrastructure, will need to be addressed.

As such, Ozianyi explains that the implementation will be slow and incremental, with benefits being realised only in later years.

Stage set for battle over telecoms rates | TechCentral

The stage is set for a battle of epic proportions at public hearings in Johannesburg next week. That’s when operators will make their arguments for and against proposed cuts in wholesale call termination rates.

MTN, for one, has warned of dire consequences for its business and for the entire mobile ecosystem if industry regulator, the Independent Communications Authority of SA (Icasa), proceeds with its plans to cut mobile call termination rates to 65c/minute this year. Other operators have also lodged strong objections.

Icasa wants the rates — the fees the mobile operators charge each other and other telecommunications companies to carry calls onto their networks — reduced to 65c in July. This would follow a 36c voluntary cut by the mobile providers on 1 March.

High mobile interconnection rates have been blamed for keeping retail prices high and for keeping new competitors from emerging.

Now, MTN has gone on the offensive. In its submission to Icasa ahead of public hearings scheduled for 28 to 30 June, the company says the draft proposals “suffer from serious legal and regulatory flaws”.

Moreover, when the March rate cut is factored in, the “drastic nature of the proposal is truly revealed”, MTN says. “In fact, it represents the most aggressive mobile termination rate price control MTN has ever seen: the peak rate would fall from R1,25 to 65c in just four months, and 70% of the total 85c cut proposed by the authority would take place between March and July this year.”

The operator says the impact of too steep and unbudgeted-for cuts in one year would force it to take “dramatic cost-cutting actions in the second half of 2010, affecting not just MTN’s business, jobs and investment plans, but also its customers and the whole mobile ecosystem” of least-cost routing companies, independent service providers and distributors.

“The ‘business shock’ is further heightened by the removal, overnight, of the peak and off-peak price structure that has characterised the market for the past 15 years, with great wholesale, retail and network disruption,” MTN says in its submission.

Vodacom, though disagreeing with large sections of the proposed cut in termination rates, has taken a more conciliatory approach to the regulator. In its submission, it says it agrees with Icasa that the wholesale cost-based rate is about 40c/minute — the level the authority has proposed the rates be cut to in July 2012.

However, Vodacom has objected to what it thinks is a too-steep “glide path” — the two-year period over which the rates will come down. It says the proposed timeframe is “far too aggressive and will significantly impact on the wholesale and price structures of the SA communications industry”.

Vodacom wants to delay the first step in the proposed guide path until March 2011. “This will assist businesses to factor the new rates into their business models and decisions for the next financial year,” it says.

Like MTN, Vodacom has also questioned the process Icasa has followed in creating the draft regulations, and has warned that, if issued in their current form, would be “unlawful and open to judicial review”.

Cell C, meanwhile, has — not surprisingly — argued for asymmetric termination rates that favour it over its bigger mobile rivals. In other words, it wants Vodacom and MTN to pay it more than it pays them to carry calls between their networks.

The country’s newest and smallest mobile operator argues that higher termination rates have undermined its full potential. It has objected to being defined as an established operator with significant market power for the purposes of regulation, alongside the likes of Vodacom, MTN and Telkom.

“The use of asymmetric mobile termination rates for an interim period will promote competition in the long run in the SA mobile market as this will enable Cell C to grow its market share and become a more effective competitor,” Cell C says.

— Duncan McLeod, TechCentral

Numbering regulations reach final phase / ITWEB

By Leigh-Ann Francis
Johannesburg, 14 Jun 2010

The Independent Communications Authority of SA (ICASA) is in the process of formulating the Number Plan Regulations and has published a draft version, which is now open for public comment until mid-July.

The regulations are intended to align the regulatory framework with the Electronic Communications Act 2005 and the ICASA Act 2000, as amended in 2006, and to cater adequately for the newly competitive environment.

Senior telecoms consultant at BMI-Tech Knowledge Tim Parle explains that the regulations cover three phases, two of which are already complete.

The first phase was completed in 2007 and entailed changing the international dialling prefix used in SA from "09" to "00". This was in line with international norms and freed up the numbers with the second digit of 9, states Parle.

The most visible part of the second phase was the withdrawal of local calling, requiring South Africans to come to terms with dialling the prefix to local numbers and not just national, long-distance numbers, he continues. “For example, where we had to add 011 to all Johannesburg numbers regardless of whether we were calling from Sandton or Durban.”

The second phase introduced non-geographic numbers and short codes, needed to allow Neotel, and operators, to compete in the fixed market, he explains.

Parle notes that the third phase entails a more radical change. Here, the first digit dialled will change from "0" to "6" for geographic numbers and to "8" or "9" for non-geographic numbers. The aim is to provide more capacity for the long-term, he explains.

ICASA has called for public comment by 19 July and is holding public hearings on the topic in early August. The date for the implementation of phase 3 will be determined after these events.

Neotel welcomed the publication of proposed changes to the national telephone numbering plan, which the telecoms operator says promises to provide structure and clarity that has been lacking to date.

The regulations will force the industry to prepare for new infrastructure requirements and changes to their business models, which is said to have positive long-term effects for operators and their customers.

Industry impact

“The impact of these changes will be felt by the operators, which will need to re-programme the routing tables in all their switches and do extensive testing,” Parle predicts.

This is a large operation for Telkom, given its footprint of telephone switches across the country, and a significant exercise for the mobile operators, given the large number of base station control and MSCs deployed, he continues.

“The effect ripples down to Neotel, ECN, Vox and the like too. For small to medium enterprises, company PABX/PBXes will need to be reprogrammed to handle the changes with knock-on impacts to billing systems, LCR systems, internal directories and the like.”

Gregory Massel, MD of Switch Telecoms, notes that, while mobile networks and wireless application service providers will have to amend some of their premium rate and content subscription services, both company and consumers stand to benefit.

“Companies like Switch Telecom will benefit by being able to provide toll-free services. At present, Telkom makes this difficult because rather than honouring the toll-free status of the 0800 number, it simply plays a message saying: 'Calls to this non-Telkom toll-free number will be charged.'

“In the future, the calls will be toll-free, irrespective of the network they originate on,” explains Massel.

Consumers also stand to benefit from regulations relating to SMS-based content subscription services. “Providers will not be allowed to sign a consumer into a subscription-based service unless the consumer subscribes via a premium rate shortcode.

“Any SMS-based advertisement they send you enticing you to respond will have to be sent from a premium rate shortcode so that consumers are not misled under false pretences,” he notes.

The regulations also allow for the implementation of tariff controls, adds Massel. Certain number ranges will be classified as cheaper calls and others will be classified as more expensive.

“Having two clear bands, excluding toll-free and premium-rate, will help remove the current situation that has arisen where consumers have no idea what the cost of a call is before dialling,” he says.

Parle predicts that consumers may grumble at the changes initially, and for a few weeks may fumble when trying to make a call, but will soon take the changes on board. There is also a chance that shares in media companies and PBX maintenance companies will become hot items, he concludes.

New Icasa chair will face political challenges | TechCentral

President Jacob Zuma is expected to appoint a chairman to the Icasa council within the next few weeks to replace outgoing chair Paris Mashile, whose five-year term expires at the end of this month. It’s a decision that will reverberate in the telecommunications industry for years to come, says a leading consultant.

BMI-TechKnowledge MD Denis Smit says it’s important Zuma, in consultation with communications minister Siphiwe Nyanda, picks a strong and capable person to lead the regulatory authority for the next five years.

Zuma’s choices are somewhat limited, though. The Icasa Act requires him to pick the next chairman from the existing crop of councillors. But there are a few strong potential candidates the president could choose.

Smit says whoever gets the job will have a number of challenges to deal with the moment they walk into Mashile’s soon-to-be-vacated office. “And a lot of these are very political in nature,” Smit says.

To read more click on the link above....

Icasa under fire over spectrum auction | TechCentral

A top regulatory expert has lambasted the Independent Communications Authority of SA (Icasa) over its planned auction of spectrum for wireless broadband services, saying the process is deeply flawed.

Dominic Cull of Ellipsis Regulatory Solutions says there are a number of serious flaws in the process of licensing spectrum in the valuable 2,6GHz and 3,5GHz bands.

Cull’s concerns should be taken seriously, especially given the strategic economic importance of the frequency in question. The mobile operators, for one, stand to make billions of rand from selling services in these new bands.

There’s likely to a particularly wild scramble for spectrum in the 2,6GHz band, where operators will be able to build networks of national scope.

Click on the link above to read more....