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Outrage as two cellular licences awarded
Bidders say the decision will lead to a costly duplication of infrastructure, writes SHERILEE BRIDGE
But potential empowerment bidders for the two new cellular licences have lashed out at the decision. Satra said on Friday two more licences should be added to the MTN-Vodacom R12-billion-a-year duopoly. The recommendation came as a surprise after indications that only one additional licence would be granted. Vula Communications, a black-owned media and telecommunications company leading one of the bidding consortia, said it was "very disappointed" by the move. CE Mark Headbush said the decision would have an impact on both the financial and the empowerment strengths of the new operators. "One licence would have ensured a strong empowerment presence in the cellular market. It would also have meant there would have been aggressive competition between the black-owned network and the existing operators. Four players means that more has to be shared and weakens the playing power." If two new licences were awarded, regulatory mechanisms would have to be put into place to ensure the survival of both networks, Headbush said. Afrozone, another potential bidder, said it felt there was room for only one more network. Director Chris Makhele said investors were worried about the financial viability of one, let alone two networks. The biggest concern was duplication of infrastructure as each network would have to spend between R6- and R10-billion. Most black empowerment bidders expected Satra to back them in their quest to make use of the existing networks while setting up shop. The authority said the new entrants should be allowed to use established roaming and interconnect facilities at preferential rates. Nape Maepa, chairman of Satra, said two licences would best spread the opportunities for empowerment and enhance competition. "Regulatory interventions are used internationally to level the playing field when new entrants come into an established market." He said these issues, along with questions about cross ownership and maximum percentage of foreign investment, would be addressed in the tender document. The documents are expected to be released within one or two months. This will be followed by a four-month period to prepare bids. Among the consortia expected to put in bids are the Vula Communications-led group, which may be joined by Thebe Media and Communications; the Telecommunications Empowerment Consortium (TEC) and Afrozone Investments; and a consortium driven by the Communication Workers' Union. The tender evaluation process, which rests with Satra, is expected to take about two months. Minister of Posts, Telecommunications and Broadcasting Jay Naidoo said the recommendation was in line with his ambitions for the industry. The universal services obligations of the new networks could clash with those of Telkom, but Naidoo said the telecommunication utility's roll-out programme would not be affected. Vodacom and MTN said they were open to competition as long as it was on an equal basis. MTN announced on Friday that six black empowerment groups had been allocated a 3.5% shareholding worth about R175-million. The groups selected from a list of 45 are a consortium led by women's empowerment group Pontso, Safika Wireless, Union Alliance, Eastern Cape Black Economic Empowerment Group, Siphumele Investments and the Workers Investment Company. Top of page
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