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Telkom SA CEO lashes out at “erratic” regulator

South African regulator ICASA has come under fire from Telkom SA’s CEO Sipho Maseko for “mak[ing] rules on the run”.

The attack was aimed at ICASA’s proposed spectrum auctions, which have drawn criticism from all corners. During his address at Telkom’s AGM, Maseko claimed that there were “fundamental problems” with the proposed auctions, including in the entry criteria stipulated by the Invitation to Apply (ITA).

A key complaint of Maseko’s was the requirement specified by ICASA that would-be participants must have a “30 per cent threshold around black economic empowerment in order to vote”. Maseko railed against the stipulation, saying “we don’t know what is the logic that ICASA followed with regard to this specific requirement.”

The regulator’s auction proposals have proven highly unpopular, with the South African telecoms ministry taking legal action against ICASA in order to stymie the upcoming sale of spectrum valued at over $1 billion. The ministry noted that the spectrum would not be immediately available upon its sale, as well as arguing that ICASA had not specified policy direction for the airwaves in question.

Maseko also condemned other decisions by ICASA, including its approval of Vodacom’s now-shelved acquisition of Neotel – which also attracted legal challenges from operators - and its track record on termination charges. Describing the regulator’s judgement as “disconcerting” and “worrisome”, Maseko noted that the spectrum auctions could force Telkom to take legal action.

“It’s how the regulator chooses an approach to manage these issues in a way that is not consistent with how a regulator needs to behave,” he said. “Even with this ITA, even if you put aside substantive issues, we have a number of process issues. We will take the right legal action.”

He conceded that the industry-wide practice of hiring from within the regulator and telecoms ministry was having an adverse effect on policy, noting “you end up with critical pillars of policy and regulation being weak.”

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