Telkom shows its Local Loop Unbundling hand, and it does not bode well for people who expect Telkom to be soft on the issue
Telkom shows its Local Loop Unbundling hand, and it does not bode well for people who expect Telkom to be soft on the issue
Local Loop Unbundling (LLU) is widely seen as a driver of competition by giving competitors access to the incumbent telecom operator’s last mile copper infrastructure, which would prove very expensive for competitors to replicate.
The Independent Communications Authority of South Africa (ICASA) opened the debate around LLU when it unveiled the long awaited Local Loop Unbundling (LLU) discussion document on 22 June 2011.
Previously Telkom has not commented on ICASA’s LLU discussion document, but the company broke their silence today (14 July 2011).
Speaking at the South African Communications Forum (SACF) Local Loop Unbundling (LLU) workshop, Telkom’s head of regulatory affairs, Andrew Barendse, said that LLU is very complicated and very costly.
“I will be very surprised if any of the drivers of LLU in the European Union will advise LLU for South Africa as it will be counter-productive because of the cost and complexities associated with the process,??? said Barendse. “LLU is not designed for developing nations like BRICS countries.???
He continued by saying that there are no peer reviewed studies which point to job creation or rural development related to LLU.
Barendse further questioned whether LLU results in the stated objectives, pointing to academic papers which show that LLU failed in various regions where it was implemented.
Barendse quoted Ewan Sutherland’s paper ‘Unbundling local loops: global experiences’ which states that “In Africa, unbundling the local loop may not be the answer or not a very significant answer. With the exception of a few countries, there are insufficient local loops for the enormous regulatory effort to be worthwhile???.
Barendse told delegates at the SACF LLU seminar to always keep the three ‘Cs’ in mind when thinking about LLU: Complex, Costly and Counter Productive in the case of South Africa.
While Barendse highlighted that his words should be seen as merely a conversation about local loop unbundling, it clearly shows that Telkom is not keen to see LLU being implemented in South Africa.
Barendse’s words may also indicate that the regulator and providers looking for access to Telkom’s copper infrastructure can expect a fight when it comes to full LLU implementation in South Africa.
This is not unexpected considering that Telkom CEO Pinky Moholi recently stated that local loop unbundling poses a major risk for the company – sending a strong message that Telkom is unlikely to make it easy for rivals to gain full access to its last mile infrastructure.
“Industry should not be surprised that we are cautioning against LLU in South Africa,??? said Barendse. “It is not clear what the benefits of LLU will be, and how the benefits will exceed the cost associated with LLU in SA.???
Rudolph Muller
http://mybroadband.co.za/news/telecoms/29060-telkom-looks-ready-to-fight-llu.html[
Submitted by Siversmith[PCD]]
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