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Viewing cable 05PRETORIA4934, SOUTH AFRICA TELECOMMUNCATIONS: SECOND

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Reference ID Created Released Classification Origin
05PRETORIA4934 2005-12-20 09:43 2011-08-24 01:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Pretoria
VZCZCXRO0849
RR RUEHDU RUEHJO RUEHMR
DE RUEHSA #4934 3540943
ZNR UUUUU ZZH
R 200943Z DEC 05
FM AMEMBASSY PRETORIA
TO RUEHC/SECSTATE WASHDC 0560
INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
RHDIFCC/FCC WASHDC
UNCLAS PRETORIA 004934 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
FCC FOR PATRICK BOATENG 
 
E.O. 12958: N/A 
TAGS: ECPS EINV ECON SF
SUBJECT: SOUTH AFRICA TELECOMMUNCATIONS: SECOND 
NATIONAL OPERATOR LICENSED GETS NOD 
 
SENSITIVE BUT UNCLASSIFIED; PROTECT ACCORDINGLY.  NOT 
FOR INTERNET DISTRIBUTION. 
 
1. (SBU) December 9 the Independent Communications 
Authority of South Africa (ICASA) licensed the yet-to- 
be-named Second National Operator (SNO).  The SNO will 
compete with monopoly fixed line telephone operator 
Telkom in a market plagued by extraordinarily high 
prices.  Although the SNO has not yet announced its 
plans, industry insiders say it will launch operations 
in July and will concentrate on the business market. 
They do not expect significantly lower telecom prices 
until the SNO has been operating for a couple of years. 
 
2. (SBU) Industry insiders say that start up operations 
will be difficult.  The SNO is comprised of various 
shareholder organizations which struggle to unify into 
an effective competitor.  SNO shareholders include 
black economic empowerment partner Nexus Connexion, 
which owns 19 percent; Transtel and Eskom 
Telecommunications, which own 30 percent between them; 
and Sepco which owns 51 percent. The SNO will need to 
either access the existing fixed line network of 
Telkom, as required by law, or build its own network. 
ICASA is putting pressure on Telkom to offer access to 
its network to the SNO and other operators at a lower 
price. 
 
3. (SBU) COMMENT. Licensing of the SNO is nearly three 
years late, delayed by a lack of serious, qualified 
investors and SAG bureaucratic ineptitude.  With 
Telkom's high prices widely acknowledged to be a 
serious impediment to stronger economic growth, 
pressure will be on the SNO to bring lower 
telecommunications charges soon. END COMMENT. 
 
TEITELBAUM