The Independent Communications Authority of South Africa (Icasa) published a draft document on electronic communication infrastructure sharing last year that bodes well for ICT industry entrants and their customers, especially those in remote parts of the country.
Infrastructure is expensive, and unaffordable for many smaller operators. But even if costs are no problem, it is important to remember that not all Internet Service Providers (ISPs) have licensing, owning and maintaining infrastructure in their business pallette.
This does not mean that infrastructure is the realm solely of large, established operators. Take the connectivity provider in a small town or village who might not be able to justify certain services based on the lack of profitability.
Enter infrastructure sharing through an ISP with a wholesale offering.
Infrastructure sharing is not about forcing monopolies to give up some of their infrastructure – it’s about finding synergies for success. Where the incumbent might be unable to offer certain specialised services in partnership with a smaller operator. It can result in a symbiotic relationship that ultimately benefits the end consumer.
Consumers get the services they need – mobile, terrestrial or satellite connectivity, the smaller ISP gains access to new markets, and the larger network owner ensures that no capacity on its network is wasted. Everyone wins.
It is indeed possible for small ISPs and wholesale providers to be in competition and still be partners in business, without colluding. The key is transparency and an ethical approach to business that fosters competition and customer access to services in the market.
For example, a local ISP might wish to enter a market, delivering fibre-to-the-door connections. Should there be an existing long haul fibre provider in the area, it does not make sense for the ISP to launch a new construction of fibre pipelines.
Not only would it require capital expenditure, it would be disruptive to the community, and the incumbent likely has excess capacity on the line as most fibre infrastructure is built with large margins for future growth.
So, the local ISP purchases last mile services from the incumbent. It makes sense considering that one entity specialises in long distance transmission and the other on more specialised to-the-door services.
Ultimately, these network expansions stimulate retail competition, and they serve the greater objective of connecting South Africans to ICT services they would never have had.