The result is conflicting reports of what exactly the broadband penetration figures are. In October 2012, South Africa's deputy minister of Communications, Dina Pule, put the penetration rate at around 2%. In December 2012, a news report stated that individuals with broadband subscriptions represent 11% of the population. Either way, industry experts say it is still much too low.
According to Mitchell Barker, CEO of WhichVoIP.co.za, a directory website which lists details of Voice over Internet Providers (VoIP) in South Africa, the lack of progress with local-loop unbundling (LLU) is a major obstacle in the way of the country's broadband growth: "LLU, also called last mile connectivity, is that regulated process by which other independent operators and service providers are given unbundled access to the infrastructure and exclusive telephone exchanges of Telkom in order to deliver telephone services to their own clients' homes or businesses. That physical wire that runs between the customer's premises and the company is known as the 'local loop'."
State-owned Telkom, which for a long time held the monopoly on the country's fixed-line services, is still in possession of the most infrastructure, with thousands of kilometres of copper-based and fibre-optic cables spanning South Africa. "By giving other operators and providers access to those lines, it will remove barriers to entry for new operators, including VoIP providers, which will foster competition in the industry, which in turn will drive down prices," Barker says. "LLU will therefore create that supply and demand which will make fixed-line broadband access far more affordable to the consumer, thereby encouraging more widespread adoption. It will also extend broadband infrastructure to areas that are currently beyond Telkom's grid. Most importantly, it will drive down the cost of doing business in South Africa."
The problem is that all efforts to put LLU into practice have completely stalled. The process began back in 2006 already, when South Africa's then minister of Communications, the late Dr. Ivy Matsepe-Casaburri, appointed an LLU committee to investigate implementing LLU in South Africa. A year later, the LLU committee ruled that all service providers approved by the Independent Communications Authority of South Africa (ICASA), the country's communications sector regulator, should have the right to use Telkom's telephone exchange infrastructure whenever necessary. The committee also ruled that implementation of LLU should happen urgently and be completed by 2011.
Telkom and ICASA missed that deadline and subsequent ones as well, including the last one in November 2012, which is the date ICASA had promised for delivering the first and most basic form of unbundling, called bit-stream access, which would have seen Telkom providing transmission capacity between end-user telephone connections and rivals at wholesale prices. After facing questions in parliament, ICASA said that a new target of March 2014 has been set for introducing bit-stream access.
While LLU is essentially stuck in limbo, Barker says that this can actually create an opportunity for VoIP operators to collaborate with connectivity partners in possession of better infrastructure. "They can pool their resources together, which will also drive costs down. Since LLU is clearly stuck in a seemingly endless loop in South Africa, it is time for VoIP providers to consider alternative ways to deliver their services to consumers," he concludes.
For further information, go to www.whichvoip.co.za.
