The deregulation of the South African telecommunications environment.

Abstract

The intention of this document is to discuss the deregulation of the telecommunications environment in South Africa, focusing specifically on the introduction of the Second Network Operator and its relationship with Telkom and the market. The aims of this research include an evaluation of whether or not competition can occur when Telkom is the provider of a portion of the fixed line equipment as well as a competitor to the Second Network Operator. In addition to this an evaluation will also be undertaken of whether or not the consumer will ultimately benefit from increased service levels, as well as decreased cost once the Second Network Operator is offering services to the consumer. The research methodology employed is that of Case Study Analysis. The reason being that this method allows for a large amount of relative data to be chosen for the study (using Purposive sampling techniques), and this can then be analysed on a subjective basis, using comparisons as well as models such as the PEST, and Porter's Five Forces. Ultimately the study recommends that without a strong regulator, deregulation is pointless as the incumbent provider is exceptionally powerful both financially and politically and will not hesitate to engage in unfair practices should it feel that those practices may benefit their position. To this end it is recommended that ICASA play an active role in the pricing of the local loop access as well as the pricing of interconnections between the parties. It further recommends that Neotel follow a strategy of strong customer focus as well as strong technological focus.