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DE RUEHSA #1976/01 2520850
ZNR UUUUU ZZH
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FM AMEMBASSY PRETORIA
TO RUEHC/SECSTATE WASHDC 5615
INFO RUCPDC/DEPT OF COMMERCE WASHDC
RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE

UNCLAS SECTION 01 OF 02 PRETORIA 001976 
 
SIPDIS 
SENSITIVE BUT UNCLASSIFIED 
 
DEPT FOR EEB/CIP/BLAKEMAN 
 
E.O. 12958: N/A 
TAGS: ETRD EIND EINV EINT ECIP SF
SUBJECT: ICT FORUM DISCUSSES NEED TO IMPROVE IMPLEMENTATION OF ICT 
POLICIES AND STREAMLINE REGULATIONS 
 
REF:  PRETORIA 271 
 
¶1. (SBU) Summary. The South African Chamber of Commerce and Industry 
(SACCI) sponsored a forum on ICT Developments and Regulations on 
September 4.  The forum included members of South Africa's 
Presidential International Advisory Council on Information Society 
and Development, who promoted increasing ICT access in South African 
schools.  Forum participants criticized the Independent 
Communications Authority of South Africa (ICASA) for its onerous 
licensing processes.  Speakers also called for a campaign to educate 
political leaders who would impact future ICT policy development and 
implementation.  New developments in the ICT sector including the 
introduction of Neotel, SEACOM undersea fiber-optic cable, and new 
Value Added Network Services (VANS) networks will serve to drive 
down ICT costs for South African consumers in the coming months. 
End Summary. 
 
¶2. (U) SACCI sponsored a forum on ICT Developments and Regulations 
at Microsoft South Africa headquarters on September 4.  Embassy ICT 
officer attended the forum and had the opportunity to speak with 
industry and consumer group representatives. 
 
¶3. (U) Forum Participants included members of the Presidential 
International Advisory Council on Information Society and 
Development, which will meet September 6-7 to advise President Mbeki 
on leveraging ICT to advance South African development.  Advisory 
council members include representatives from international ICT 
companies.  Microsoft Regional Technology Officer Michael Thatcher 
said the advisory council would urge President Mbeki to increase 
efforts to help schools utilize technology.  It would also urge 
South Africa to tighten intellectual property rights (IPR) so 
entrepreneurs could make a living from their inventions. 
 
-------------------------- 
IMPLEMENTATION A ROADBLOCK 
-------------------------- 
 
¶4. (U) Thatcher identified deficiencies in policy implementation as 
a roadblock to improvements in the South African ICT sector.  He 
said "even when policies were good, their implementation was 
erratic."  He noted that the South African Government (SAG) has a 
commendable policy to provide schools with a fifty-percent 
discounted internet connectivity rate.  However, Thatcher 
highlighted that implementation roadblocks have made it difficult 
for most schools to access this discounted rate.  The policy has not 
been well-enforced and fewer than ten percent of schools could 
access the discounted rate.  Thatcher also cited the execution and 
implementation of IPR policies as critical to growth in the sector. 
He explained that the Patent Office would need resources to transfer 
its patents database online. 
 
-------------------------- 
INDUSTRY CRITICAL OF ICASA 
-------------------------- 
 
¶5. (SBU) Communications Users' Association of South Africa (CUASA) 
Representative Roy Webber criticized ICASA for slowing the pace of 
ICT liberalization and competition.  Webber said South Africa needed 
a strong, capable, independent, effective, well-funded and 
communicative telecoms regulator; but asserted that ICASA was 
neither independent nor communicative.  Webber slammed ICASA for its 
"out-of-date" website and lack of oversight on ICT billing. 
According to Webber, every operator should be forced to offer 
per-second billing and ICASA should work to reduce interconnection 
fees users pay when a call from one network terminates on another 
(e.g., from a fixed-line to a mobile-line). 
 
¶6. (SBU) ICASA Chairman Paris Mashile was also scheduled to 
Q6. (SBU) ICASA Chairman Paris Mashile was also scheduled to 
participate in the Forum, but did not attend.  Webber expressed 
frustration at Mashile's absence since he wanted to hear ICASA's 
response to his critiques. 
 
------------------------------- 
ICASA Licensing Process Slammed 
by Industry and Courts 
------------------------------- 
 
¶7. (SBU) Webber disparaged ICASA for slowing down the roll-out of 
additional ICT networks.  Webber noted that ICASA processes had 
considerably delayed the licensing of the second national operator 
Neotel, which delayed much-needed competition against state-owned 
Telkom.  He also criticized ICASA's license conversion process for 
existing ICT license-holders.  According to Webber, ICASA has 
started the license conversion process, but has not finalized the 
costs for these new licenses.  This creates uncertainty for the 
industry. 
 
¶8. (SBU) Webber noted that ICASA's shortcomings in the licensing 
 
PRETORIA 00001976  002 OF 002 
 
 
process were recently highlighted by a Pretoria High Court decision, 
which found ICASA's processes to be flawed.  The issue centered on 
whether companies holding Value Added Network Services (VANS) 
licenses were entitled to build their own network, or whether they 
were had to lease their backbone facilities from Telkom.  The court 
decision effectively ended Telkom's monopoly by decreeing that 
technology company Altech has the right to build its own network. 
Webber emphasized that ICASA should have addressed this issue 
three-years ago instead of being forced to do so through the courts. 
 
 
¶9. (U) According to press reports, the decision will open the 
"floodgates for competition since it allows about 300 other internet 
service providers and data carriers to build their own networks, 
too."  Altech CEO Craig Venter described the decision as "an 
undisputed victory not only for Altech but for the whole telecoms 
industry."  Venter said it would cost about R1 billion ($125 
million) to set up a national network so most players could not 
afford to do so, but those with the financial muscle could now swing 
into action.  "Ultimately, consumers will benefit because they will 
see lower prices," Venter added. 
 
------------------------- 
INDUSTRY MUST EDUCATE ANC 
------------------------- 
 
¶10. (SBU) Professor Itumeleng Mosala, a former cabinet-member under 
the Mandela government, encouraged industry and consumer 
organizations to "better educate policy-makers" on ICT issues.  He 
acknowledged that here had been unnecessary SAG interference in the 
ICT sector in the past, but cited a need for better-informed policy 
makers.  Mosala noted that "interference many times masquerades as 
regulation. Government has a right to regulate but it has no right 
to interfere."  He prompted the ICT sector to be more strategic in 
addressing problems with the ICT regulatory environment. 
 
¶11. (SBU) Mosala noted that a new ANC government would soon be in 
power and industry officials should work with the ANC to educate 
them.  He said that lobbying efforts tended to concentrate on 
officials at the Department of Communications (DOC) or ICASA, when 
they should also be targeting broader ANC leadership.  He emphasized 
that policy is developed by committee in the ANC and he did not 
believe that ANC policy makers were currently well-informed about 
the ICT sector or the implications of SAG ICT policies on economic 
growth.  "If they understood the issues, they'd implement policies 
better," Mosala said. 
 
¶12. (SBU) Comment:  Increased competition and innovations in the 
South African ICT sector have been hampered by DOC and ICASA 
policies.  The DOC has championed policies to support state-owned 
entities and state-sponsored ICT projects at the expense of improved 
and affordable services.  ICASA officials have acknowledged delays 
in the license conversion process (reftel) and the need for 
additional training on spectrum management.  U.S.-based ICT 
companies have also cited the need to better inform SAG officials 
about developments in the ICT sector and the impact of SAG policies 
on sector growth. 
 
¶13. (SBU) Despite these challenges, competition in the sector should 
be revolutionized in the coming months.  Neotel has recently begun 
offering competitive fixed-line services.  Increased bandwidth 
capacity also will become available in June 2009 with the SEACOM 
undersea cable project.  Finally, liberalization in the sector will 
also be spurred on by the recent court decision to allow VANS to 
Qalso be spurred on by the recent court decision to allow VANS to 
develop their own networks.  All of these developments, which will 
be occurring at about the same time, will serve to drive down ICT 
costs for South African consumer.  End Comment. 
 
LA LIME