AS YOU peruse this column, Justice Davis is considering an eagerly anticipated ruling on the Altech Autopage court battle involving Icasa, the telecommunications sector regulator, and the ministry and department of communications.
Being at the hearings last week - I attended two of the three days - was helpful to get a sense of the mood, clout of the respective legal teams, and the quality of the judge.
Although all our judges are supposed to be learned individuals, I have been to other matters that left me wondering. Thankfully, it was not the case this time.
Justice Davis took the time to read through the court papers before the hearings, and even though he was not entirely familiar with all the concepts, he asked questions of the parties and learnt as he went along.
It's a complicated sector, and to get one's head around it and make a ruling quickly would be the best-case scenario. He didn't pin himself down to a specific timeline, contrary to some reports, but promised a ruling as soon as possible.
What if Altech loses?
While we await the outcome, it might be useful to understand why the matter has such significance in the telecoms market, and who stands to win and lose.
If the judge rejects Altech's appeal that it be allowed to automatically provide its own networks, then the most likely outcome is that Icasa would return to its competitive process and award select value-added network service providers (Vans) with individual electronic communications network service (i-ENCS) licences.
Altech may or may not be one of the recipients.
The "individual" bit of the licence means it is national in scope, or covers a large geographical area, rather than being a "class" licence. A class license means the holder only provides the service in a small area, like a municipal district.
Individual i-ENCS holders also have certain rights and corresponding obligations in the same way that the incumbent licensees have had for years.
The important bit is that they would be entitled to roll out their own networks, instead of relying on Telkom or any of the other licensed network facilities providers, like Neotel.
The other Vans would get electronic communications service (ECS) licences, either national or local in scope.
This simply means they get to carry on doing what they've been doing: providing internet and voice services off the back of other operators' networks. Some Vans can't afford to build their own networks and many don't see the business case for doing so anyway.
Options
But, back to the court case. A less likely course of action if the judge rules against Altech's plea is that Icasa could restart the application process for new i-ECNS licensees. This could arguably take another six months to two years to finalise and so would not be in the interests of a more competitive market.
If Icasa goes ahead to award new i-ECNS licences immediately, the biggest winners would most likely be market participants such as Internet Solutions, Vox and M-Web (getting an i-ECNS licence is arguably critical for M-Web's valuation in the sale by auction process that parent Naspers has undertaken).
But, winning an i-ECNS license doesn't necessary mean they can build their own wireless networks. It just means they can lay cable, and can apply to Icasa for access to the frequency range.
If they want WiMax spectrum - a wide-reaching broadband technology - they'll need to be 51% empowered, which is a tall order but one Wimax hopefuls will have to meet.
What if Altech wins?
If the judge rules in favour of Altech, then the flood gates would be thrown wide open, allowing all the Vans to provide their own networks.
The smaller Vans that have access to some funding and good black economic empowerment (BEE) credentials - but that may not have made it through Icasa's competitive process - would be the biggest beneficiaries if this were the outcome.
In this case, Internet Solutions and Vox would be both winners and losers, because although they'd presumably receive i-ECNS licenses, their competitive advantage would have been eroded.
As a reader of one of my articles on the court case pointed out, Vans are already providing their own networks. But unless they've partnered with an existing license holder, they are doing so illegally.
For more background on this story including the role of Department of Communications Minister Ivy Matsepe-Casaburri, click here.
- Fin24.com