SNO award process dashed by regulator

29 Aug 2003

South Africa’s plans to establish a second national operator (SNO) to compete with national PTO Telkom in the fixed line market were dashed again yesterday when the regulator, the Independent Communications Authority of South Africa (ICASA), rejected two applications for a licence. ICASA threw out the applications for a 51% stake in the SNO from TWO Consortium and WIP Investments Nine, trading as CommuniTel Consortium, on the grounds that neither demonstrated evidence of having adequate long-term funding to service a 25-year SNO licence. Under the terms of the award, a new licensee would have to roll out fixed line services to cover all major metropolitan areas within the first five years and must achieve 80% coverage of the country in the first ten years. Following this setback the regulator has recommended that the government formally close the application process and contemplate whether Transtel, Eskom and black empowerment group Nexus, which together hold 49% already, could proceed without a partner. Alternatively it may reconsider the bids. ICASA’s decision is the latest setback in the long-running SNO saga. Earlier this year it advised the government not to award the stake to the first bidders – Goldleaf and Optis – after both failed to comply with the basis rules of the bidding process.

South Africa