Infraco wants ECS licence

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Parliament’s public enterprises committee resolved to help Broadband Infraco obtain an individual-electronic communications services (I-ECS) licence, so it can offer services direct to the public.

Led by CEO Dave Smith, the state-owned broadband provider said that, without such a licence, it could not supply services to the Square Kilometre Array (SKA) – the giant radio telescope that SA is bidding for.
“Supplying such telecommunications services to the SKA needs an I-ECS licence,” Broadband Infraco executives told the parliamentary oversight committee.

Democratic Alliance shadow minister of public enterprises Manie van Dyk said it remains a mystery as to why axed communications minister Siphiwe Nyanda issued a policy directive more than a year ago to prevent Broadband Infraco from obtaining such a licence, ITWeb reports.
“At a joint meeting with this committee and his department, I clearly recall Nyanda saying: ‘I don’t believe in this rural thing’,” Van Dyk said.

The original objectives for the creation of Broadband Infraco was that it would help bring down the cost of national long-distance connectivity, participate in the construction of undersea cables to ensure they followed an open access policy, supply connectivity for projects of national interest, such as the SKA, and provide connectivity to rural areas.

Law says it must

Broadband Infraco’s governing Act says the state-owned entity must receive both an individual-electronic communications network services licence and an I-ECS licence from the Independent Communications Authority of SA (ICASA).

ICASA’s own governing Act was amended by Parliament to enable this process. However, last year, Nyanda issued a policy directive that was endorsed by Cabinet, preventing the issuing of the I-ECS licence.
“The new minister of communications [Roy Padayachie] should meet with Broadband Infraco and find a way to reverse that Cabinet decision. Because, at the moment, there is a state-owned entity that cannot fulfil its mandate because of that policy directive,” Van Dyk said.

The difference

Dominic Cull, of Ellipsis Regulatory Solutions, explains the difference between the two licences in practical terms, with the following distinctions:
* Wholesale vs retail – ECNS licensees operate on a wholesale basis, primarily through selling network capacity or connectivity to ECS licensees. ECNS licensees do not deal with the general public, only other licensees. ECS licensees offer retail services to consumers such as Internet access, voice and managed data services.
* Physical vs virtual networks – ECNS licensees operate physical networks, which may be fibre, copper, wireless, or based on any available technology. ECS licensees operate virtual networks over physical networks in order to provide their services.

Don’t buy that
“Why the policy directive was issued is mystifying. However, Broadband Infraco can argue that its competitors [Telkom, Internet Solutions, etc] have both licences and so they need them in order to effectively compete,” Cull notes.

Broadband Infraco also told the committee yesterday that, since its creation three years ago, wholesale telecommunications prices have fallen by 73%.
“But I don’t really buy that argument,” Van Dyk said. “I believe there are other market forces at play that have contributed to that as Broadband Infraco has not got all the licences it needs.”



Last week, FibreCo, a joint venture between mobile network operator Cell C, Dimension Data and private equity fund Convergence Partners, announced it would build a 12 000km fibre-optic network that would make it roughly the same size as the network Broadband Infraco currently has.