Abacus Recruitment

7 February 2005

Is there method in Matesep-Casaburri's madness or is she simply up to her old tricks again?

The decision by Communication Minister Ivy Matsepe-Casaburri that value added network service providers (VANs) would not be able to build their own networks is extremely "disappointing and destructive" because the government is missing out on a golden opportunity to grow a new industry and to create more wealth and jobs, said Org Geldenhuys, a director of executive search and IT recruitment company, Abacus Recruitment.

"Besides heralding bad news for companies who have already invested in wireless networks, this turnaround on the earlier promulgated deregulation legislation means that there will not be as much revenue generated in this market space. SA desperately needs to create more small and medium enterprises and, by allowing companies to build and operate their own networks - and sell wireless services to companies and consumers - more wealth would have been created, and, at the end of the day, more jobs. The minister, by making her announcement, has missed out on a golden opportunity. Again. What we actually end up with is not a big bank deregulation of the telecommunications industry, but a muted, quasi-deregulation."

Another leading ISP, Internet Solutions, recently announced its intention to invest R170 million in a wireless network. "These plans have obviously been thwarted," said Geldenhuys. "This investment, alone, would have created revenue, market opportunities, and jobs."

Meanwhile online news site, Moneyweb, has suggested that there might be method in the minister's madness. "They have suggested that she might have realised that it would be easier to first modify the legislation then to open up the industry overnight as was the original intention. But whatever stance you may take, the bottom line is that her long record of making use of delaying tactics - like with the legal malaise we witnessed with the second network operator - is simply not good for the telecommunications industry, or the country at large."