The effect of commercialisation, privatisation and liberalisation on universal access in South Africa

by Gardner, Sean Patrick

From the 1990s onwards, significant developments have occurred in the international telecommunications sector that have affected the South African telecommunications industry and peoples’ access to the network. Rapid developments in Information and Communication Technologies and the reorganisation of telecommunications operators through commercialisation, privatisation and the effects of market liberalisation have resulted in monopoly operators moving away from their public service mandates. Globalisation and adherence to World Trade Organisation rules are causing operators to rebalance their tariffs closer to cost. Long-distance rates are decreasing while the cost of local calls is increasing. High-end users of telecommunications services are benefiting while low-end, largely residential users are being priced off the network. The end result is a negative effect on universal access to telecommunications services.

This study examines the extent to which commercialisation, privatisation and liberalization are affecting the provision of telecommunications services and the government’s goal of achieving universal access in South Africa. Qualitative research methods were utilised to establish that the state owned operator, Telkom, has transformed itself from a public service operator to one that is fully commercialised and prepared for an Initial Public Offering and competition. Telkom no longer attempts to ensure that its tariffs are affordable for all people. However, positive developments presented themselves in the form of an increasingly competent regulator, a reorganised and dedicated Universal Service Agency, and the popularity of cellular telephony. The primary discovery of this study is that the liberalisation of the South African telecommunications sector cannot be assumed to have a negative effect on the provision of service. This study finds that liberalisation will most likely benefit the country through the role out of new infrastructure, the provision of new services and ultimately the reduction of those services themselves.

In order for universal access to be achieved in this country the study recommends that the resources of the Independent Communications Authority of South Africa be enhanced to enable the regulator oversee the industry effectively. Secondly, the Universal Service Agency must provide clear definitions of universal access and universal service as well as manage the Universal Service Fund with greater efficiency. Lastly, the two bodies mentioned above must ensure that services are affordable for all people of this country.