Telkom

1
Telkom Presentation to the Communications
Portfolio Committee
25 September 2001 Parliament
2
PRINCIPLES SUPPORTED

• Managed liberalisation
• Facilities based competition
• Set aside for HDP
• SMMEs

3
MAIN CONCERN AREAS

• Definitions
• Licence rights
• Contradictory provisions
• Support for investment in infrastructure

4
MAIN ISSUES

• Liberalisation process
• Facilities leasing/Resale
• Voice over IP
• Carrier Pre-selection
• Number Portability

5
MAIN ISSUES (cont.)

• SNO's vs. Telkom's licence
• Fixed-mobile service
• Under-serviced areas licence
• Regulatory processes

6
LIBERALISATION PROCESS

• PSTS facilities based duopoly to 2005
• Sentech multimedia
• Under-service areas licenses
• Service based competition after 2005
• Use of facilities/resale
• Voice over Internet Protocol
• VPN in VANS
• Self-providing PTNs

7
FACILITIES BASED COMPETITION

• Lease of Telkom's facilities
• Resale
• buy in bulk
• sell retail
• Voice over Internet Protocol
• communication protocol for voice, or
• voice over the internet

8
FACILITIES BASED COMPETITION

• Virtual Private Network (VPN)
• is a private telecommunication network
• facilities to be provided by PSTS licensees
• VPN provided by VANS is resale
• Self-providing PTNs
• educational network
• Maritime and Aeronautical Radio

9
FACILITIES BASED COMPETITION

• Carrier Pre-Selection
• under-service areas local only
• national long distance not before 2005
• carrier of carriers no retail customers
• SNO uses Telkom's facilities
• no incentive to roll out
• No carrier pre-selection before 2005

10
FACILITIES BASED COMPETITION

• Number Portability
• to be introduced in 2005
• all forms included
• number portability database
• Cost/benefit analysis
• net benefits
• technology and timeframe
• cost allocation and recovery

11
SNO's RIGHTS

• PSTS, as defined (ss. 36A 36B)
• Includes fixed-mobile service
• 1800 MHz frequency spectrum
• 3G frequency spectrum
• Universal Service obligations ?

12
TELKOM's RIGHTS

• PSTS, as defined in licence
• Does not include fixed-mobile service
• 1800 MHz frequency spectrum
• 3G frequency spectrum
• Universal Service obligations

13
AMENDMENT OF TELKOM'S LICENCE

• No fixed-mobile right
• Spectrum licence is not a service licence
• Amendment (s.48) at Authority's discretion
• An obligation to amend must be created

14
FIXED-MOBILE SERVICE

• As defined
• Wireless connection to exchange
• Wireless Local Loop (WLL)
• No mobility
• Telkom's view
• WLL already part of Telkom PSTS
• WLL already in Radio Regulations
• No additional service right

15
FIXED-MOBILE SERVICE (Cont.)

• Telkom's view
• Not a mobile cellular service
• Mobility only within local exchange area
• S.37 licence not required (S. 36A)

16
UNDER-SERVICED AREAS

• Nature and scope of service
• Local access service
• Service area
• Objectively defined to provide population
  information
• Threshold statistic
• Fixed services in use
• Telkom SNO services?

17
UNDER-SERVICED AREAS

• Minister issues Policy Direction
• basic criteria for qualification
• Authority conducts study
• Identifies candidate areas
• makes recommendation to Minister

18
REGULATORY PROCESSES

• Mediation Arbitration Committee
• ad hoc appointment by Minister
• lack of continuity and consistency
• independence and impartiality
• Appeals Tribunal
• s.34 of Constitution
• appointment and removal
• clear powers

19
REGULATORY PROCESSES

• Elimination of public hearing
• streamlines processes
• reduces transparency
• reduces input on complex matters
• Interconnection oversight
• not a substitute for commercial negotiations
• not to undermine contractual base
• arbiter of last resort

20
CRITICAL DEFINITIONS

• PSTS and PSTN
• Fixed-mobile service
• Under-serviced area service
• Multimedia service
• Resale
• VPNs

21
CRITICAL PROVISIONS

• Amendment of Telkom's licence
• VANS licence
• electronic transaction services
• provision of VPNs
• VoIP for SNO and SMMEs
• Under-serviced areas licence

22
CRITICAL PROVISIONS

• Interconnection
• Leasing of facilities
• Mediation and Arbitration Committee
• Number Portability
• Carrier pre-selection