1. New policy environment for the South African telecommunications sector
Department of Communications
03 APRIL 2001

2. Policy and Regulatory Instruments
Legislation
Policy direction
Invitation to Apply (ITA)
Regulation
Licence and licence conditions

3. Government Objectives
Promoting a competitive and modern telecoms environment
Favouring construction of new infrastructure and improving teledensity
Gradual move to allow non-infrastructure based competition
Fair terms of interconnect
Ownership guidelines to include local investors, and specifically investors from historically disadvantaged groups
Domestic and foreign investment
Increase access and reduction of input costs
Human resource development and empowerment

4. Liberalisation Matrix
Current May 2002
International 1 3
Long Distance 1 2
Local Access 1 2
Rural Access / VoIP (below 1%) 1 L
Data and Internet Service (no voice) L L
Cellular licences 3 3
Fixed-mobile licences 0 2
L - Liberalised
Market assessment to determine feasibility of introducing additional operators to be completed by May 2005
Minister to issue ITA for at least one services-based licence to commence provision of services in Q4 2005

5. Timeline to Liberalisation
Policy directions
ITA for SNO licence
ICASA regulations
SNO licence switch on
Sentech licence switch on
3G licences
1800MHz spectrum
Review for new licensing round
1st services-based licence
23 March 2001
July 2001
End July 2001
7 May 2002
To be decided
September 2001
May 2005
Last quarter 2005

6. Second National Operator
Role
Full service fixed-mobile licence
Roll-out obligations
3 years to complete infrastructure
Resale allowed in first 3 years
Ownership
Majority domestic ownership
ESI~TEL (Eskom) and Transtel to participate
HDP equity participation

7. Sentech Licence International services only direct to customers
From 7 May 2002
Interconnection with other operators
Carrier pre-selection rights
Multi-media services provided via digital terrestrial broadcasting platform

8. Promotion of Competition
ICASA to develop carrier pre-selection and number portability arrangements to promote competition
ICASA to develop interconnect guidelines
At least one service-based licence in Q4 2005
VANs allowed to provide full spectrum of end-to-end electronic commerce and right to operate VPNs to provide data services

9. Mobile Telkom and SNO to provide fixed-mobile services
1800 MHz spectrum to be allocated to all mobile and fixed-mobile licencees on terms to be determined by ICASA
1800 licence awards to be completed by September 2001
3G licences to be offered to all mobile and fixed-mobile licencees on terms to be determined by the Ministry - timetable not yet fixed

10. Universal Access - bridging the digital divide
New licences to include universal service obligations
All licensees will pay levy (subject to maximum 0.5% of revenue) in favour of the Universal Service Fund from April 2003
Universal Service Agency (USA) to continue to oversee the Fund
Objectives of Fund will include provision of internet services, special services to differently abled persons and communications services to high-priority areas
Special E-rate available for public schools for internet access (excluding voice) at 50% discount
ICASA will grant licences to cooperatives and small, medium and micro-enterprises to promote universal access in areas with teledensity below 1% (including VoIP)

11. Historically Disadvantaged Persons and/or Groups
Government re-iterates support for Historically Disadvantaged Persons and/or Groups
Up to 30% of all new major telecommunication licences for Historically Disadvantaged Persons and/or Groups
ICASA to develop criteria to give priority to Historically Disadvantaged Persons and/or Groups and small, medium and micro-enterprises
Encouragement of broad-based retail offering to Historically Disadvantaged Persons

12. Other Numbering system to ensure neutrality of number allocation
number allocation, maintenance and management of routing - based systems to be administered by ICASA based on cost allocation
carrier pre-selection and number portability will be introduced subject to regulatory framework (to be developed by ICASA)
Directories
single consolidated directory for all telecommunications information must be available, free of charge, to each fixed line subscriber
privacy: subscribers can elect not to have their information included

13. Other (continued) Directory enquiry services
provision of information contained in directories to be available throughout South Africa and free of charge from payphones
network operators can sub-contract service
Public emergency communications
single public emergency toll-free number - 112
governance by new institution funded by Government
Sentech to establish common digital public safety radio communication service

14. Other (continued) Human resource development
Government and private sector will develop strategy on ICT education to promote ICT literacy at early stage in education system and to support and empower women and the differently abled persons