Business Report Economy

Government pushes Telkom on line access

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Johannesburg - Last week fixed-line operator Telkom came under fire from its major shareholder, the government, which suggested that it would force the group to allow other operators to have access to lines running from homes to offices.

The government said it would force Telkom to reduce prices of its infrastructure for other operators such as the second network operator to have access to the lines.

Access to Telkom's infrastructure would open doors for more competition and would boost economic growth, analysts say.

But the outgoing deputy director-general at the department of communications, Joe Mjwara, said the government was not trying to interfere with the task of the Independent Communications Authority of SA (Icasa), which is responsible for regulating telecommunications costs.

Mjwara said the department was trying to get a consensus on certain issues regarding telecoms prices. "There are areas where there was no consensus on what needs to be done to reduce prices," he said.

Icasa's chairman, Paris Mashile, said there was a cordial relationship between Icasa and the government in terms of dealing with the telecoms prices. "The government is a policy maker and we set up the rules of the game."

Mashile said the government, which owns 38 percent of Telkom, was merely showing that it "means business" about reducing telecoms prices.

The department of communications is expected to use policy directives to explain the government's plans to control Telkom's rates for new operators. This will be among the pricing issues that would be dealt with at the telecoms conference to be held next month.

Last month Icasa asked Telkom to reduce the price of its asymmetric digital subscriber line (ADSL) service, which uses modems and existing phone lines to offer constant internet access.

Icasa believes that Telkom should charge a once-off fee to install ADSL and a monthly line rental thereafter.

Telkom was also asked to reduce its overall telecoms prices by 3 percent.

Icasa is investigating the prices of the undersea cable that takes South African calls to other countries, especially in Europe.

If that is not enough, last week Telkom was accused by the Freedom of Expression Institute of ignoring an invitation to a People's Forum on Communication Rights.

Telkom was invited to participate in the forum, which addressed the excessively high telecoms tariffs and the poor roll-out of telephone lines in rural and poor communities.