Cablegate: South Africa; Telecom Price Relief Remains Out Of
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FM AMEMBASSY PRETORIA
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INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
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RUCPDC/DEPT OF COMMERCE WASHDC
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TAGS: ECON ECPS EINT PREL SF XA
SUBJECT: SOUTH AFRICA; TELECOM PRICE RELIEF REMAINS OUT OF
SIGHT
REF: PRETORIA 13001
(U) This cable is Sensitive But Unclassified. Not for
Internet Distribution.
1. (SBU) Summary. Minister of Communications Ivy
Matsepe-Casaburri opened the Department of Communication,s
(DOC) Second Colloquium on Telecommunication Prices stating
that the Colloquium was needed to lower the cost of doing
business in South Africa, to make the country more
competitive internationally, and to attract investment. The
DOC's 19-page report supposedly contained recommendations
about how this might be accomplished, but industry
representatives were unimpressed and demanded more time for
comment. Undaunted, Deputy Minister of Communications
Padayachee concluded the colloquium by stating that DOC would
begin implementation of an action plan in six weeks. End
Summary.
2. (U) The Department of Communications (DOC) held its Second
Colloquium on Telecommunications Prices in Johannesburg on
October 11-12. Invited participants included representatives
from industry, the Independent Communications Authority of
South Africa (ICASA), and the consuming public. Minister of
Communications Ivy Matsepe-Casaburri opened the event by
declaring that the purpose of the event was to lower the cost
of doing business in South Africa, to make the country more
competitive internationally, and to attract investment.
Matter of Fact Attitude, but Facts Don't Matter
--------------------------------------------- --
3. (U) At the beginning of the two-day event, DOC distributed
a 19-page report drafted by the volunteer Telecommunications
Pricing Working Group. The report contained a number of
recommendations about how South African telecommunications
prices could be reduced. Colloquium participants split into
three groups, each tasked with discussing the report. In the
final plenary, the individual groups reported on their
discussions.
4. (SBU) At issue were twelve overarching recommendations
that the Telecommunications Pricing Working Group listed at
the end of its report. However, the twelve recommendations
did not necessarily relate to the text of the report. The
text contained a total thirty-three recommendations. No
analysis or explanation was given as to why only twelve were
selected. Some recommendations were vague, e.g., "We
recommend the regulator to urgently examine the issue of high
telecommunication prices." Almost as an afterthought, the
last recommendation read: "Strengthen the regulator," but the
text of the report provided no supporting analysis or
concrete suggestions as to how this might be accomplished.
Industry Dissension
-------------------
5. (SBU) Industry representatives balked at the matter of
fact attitude of DOC organizers and the "facts don't matter"
approach of the report. This formed the crux of their
criticism of the Colloquium. The report offered nothing new,
they argued, and the final recommendations only confused the
issue. Some accused the DOC of holding the Colloquium to
show that the department was doing something about high
prices when this was not the case. Others pointed out that
the central problem was a weak ICASA, caused by the lack of
leadership, understaffing, and dependency on DOC for funding.
They argued that ICASA needed to be strengthened to
counterbalance the monopoly power of Telkom.
6. (SBU) Unable to endorse the report or its recommendations,
industry representatives requested more time to formulate
comments. The DOC granted them an additional two weeks
before its Telecommunications Pricing Working Group would
release its final report. Undaunted by industry objections,
DOC Deputy Minister Radhakrishna "Roy" Padayachee closed the
Colloquium by promising that an action plan would be
forthcoming and that the "first steps" in the plan would be
taken within six weeks.
Comment
-------
7. (SBU) Industry representatives and analysts agreed that a
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strong ICASA was essential to fostering the kind of
meaningful competition in the telecommunications sector that
would ultimately result in lower prices, more choice, and
better service for consumers. The Colloquium and Working
Group report contributed little to this outcome. The DOC has
long had a stranglehold on ICASA and appears to be using
consumer discontent to tighten its grip. Parliament is
currently debating the department,s recently introduced
"Telecommunications Convergence Bill" that would strengthen
the regulatory role of the DOC at the expense of ICASA. Not
only would the DOC control ICASA's purse strings, but the
Minister (rather than the President) would appoint all ICASA
Councilors. Without strengthening ICASA and/or a clear
strategy to introduce more competition into the market,
relief for weary South African consumers will likely remain
elusive.
TEITELBAUM