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TCS | Nomvuyiso Batyi on what needs fixing in SA telecoms
South Africa’s telecommunications industry is facing a barrage of threats, from crime and vandalism to power cuts and overreach by politicians. This is the word from Nomvuyiso Batyi, CEO of telecommunications industry lobby group the Association for Comms & Technology (ACT) and an industry stalwart who served as a councillor at communications regulator Icasa for eight years and as special adviser to the minister of communications. She was speaking to TechCentral editor Duncan McLeod on the TechCentral Show (watch or listen to the interview below). ACT, which represents the six big telecoms operators in South Africa – MTN, Vodacom, Rain, Liquid Intelligent Technologies, Telkom and Cell C – was founded two years ago as an interface between the industry and policymakers and regulators. In the interview, Batyi unpacks a range of issues affecting ACT members. She discusses: • Her first engagement with newly appointed communications minister Solly Malatsi, and her views on him; • What her day-to-day work involves; • Why government shouldn’t be setting deadlines for 2G and 3G switch-off in South Africa; • Import taxes on cellphones, and why luxury taxes on 4G devices should be scrapped; • How the load shedding problem has been replaced with the load reduction problem, and what the impact has been on operators; • The scourge of theft and vandalism, and why urgent action is needed to address the problem; and • South Africa’s upcoming spectrum auction, and why telecoms operators should get access to spectrum below 694MHz that has traditionally been reserved for broadcasting. Don’t miss the interview!
- Duration:
- 1h 1m
- Broadcast on:
- 19 Jul 2024
- Audio Format:
- aac
I'm Duncan McLeod and this is the Tech Central Show. TCS is brought to you by MTN Business. You can learn more about MTN Business by visiting mtnbusiness.co.z and we thank them for partnering with the show to bring you these great interviews. Remember, you can subscribe to the Tech Central Show on YouTube at youtube.com/techcentral or simply search "techcentral" one word in your favourite podcasting app and hit the subscribe button and you'll get all of our latest shows. Now, my guest today on the Tech Central Show is Nonvo Yisobachi, who heads an industry non-profit called the Association for Combs and Technology, or ACT Act for short. Nonvo, yes, it's good to see you. It's been a while. Are you well? Thank you very much, Duncan. I am well. Actually, lovely officers that you have your students. Quite beautiful. Thank you. It's an absolute pleasure to welcome you to our studios. Now, ACT is a non-profit entity that represents six, is it, of South Africa's major telecommunications operators. Who are they? It's six. It's Salcy. It's MTN. It's rain. It's liquid intelligence. It's Vodakom and Telcom, so it's those six. Okay. And it was established around about two years ago, maybe a little bit longer than that now. You had a launch at Melrose Arch. Correct. Why was ACT founded? ACT in Central was founded on two principles that in terms of the ICT ecosystem as a stand, we needed to ensure that every decision that is made in South Africa is made on research, that is evidence-based from a policy point of view. And because for the last, it is this year, 2021, since 2020, since 2003, there hasn't been a policy that is involved with empirical evidence-based research. So that was the main thing. And secondly was to ensure that the network operators and in and themselves, when it comes to issues of mutual interest, they speak with one voice so that they're not confusing stakeholders such as, I'll say, regulators and policy makers, especially at the time that there were five of my members were recently at that year, just the way I were given spectrum by the South African government. So as they woke up about to roll out the spectrum, what does that mean in the main? But also we had other challenges such as uninterrupted power solutions that we had to look at. So it's a broad topical issue that we look at from South African revenue services, national treasury, I see our communications and technology. So that's what we do. So do you spend most of your time then speaking to regulators, to policymakers and the like? Mostly, in addition to the all six members, of course. Mostly it's ensuring that the regulators and policymakers have the most up-to-date information when it comes to their decision-making and also try to demonstrate to them items that they have not yet made decisions on. For instance, if you think about like diesel rebate for the telecommunications sector that we applied for, we had to demonstrate that connectivity is a human right. It's a basic human right, the same as water, the same as electricity that people cannot be without connectivity. Unfortunately, our application was not considered, but those are the kind of people that we speak to. Okay. Now you personally have extensive experience in the sector. You were an ICASA counselor from what was taken for about eight or nine years. Eight years. Correct. Correct. You also worked in the Department of Communications, I think it was just called the Department of Communications then. Yes, correct. And you were an advisor to the minister at one point as well. Yes, I did a short stint as an advisor to the minister. You're also an acting DG at one point. Yes, when we're doing the measure of the Department of Communications and the telecommunications department and creating the new Department of Communications and Digital Technologies, just to make sure that the measure of the two departments happens seamlessly. And if there are any excess people, especially administrative staff, we advise from our essay from government point of view, what is supposed to happen when it comes to those positions. Okay. Yep. All right. So you know your way around the system. Yes, yes, yes, yes. Been around. So there's a lot happening in the industry right now. There's also a lot happening in politics with a new Minister of Communications. And if we're not mistaken, Solly Malazi is the first non-A and C Communications Minister that we've had since 1994. Have you had a chance to engage with him yet? And if so, what are your thoughts? I say affirmative as the first Minister since 1994, that is not A and C. I must say, I've had engagements with him, and the impression that I have of him is a very pragmatic man. He is not driven by political agendas. He is about the business at hand, and he's very, I'll say he's very welcoming in terms of new ideas. And he'll just say, give me a minute, I'll write up on what you've sent to me and apply my mind, because he realizes that he has been established at that office, has been established in terms of the law, and one of the things that impressed me about him in our engagement always involves the Deputy Minister. That was the Minister. Who was the Minister? So, and I think it's more of a sanity check for him, and that I comment on his part. Okay, okay. But we will have a formal engagement with my board and him in the next, I think next month, orchestral ready. Okay, but it sounds like your initial contact has been positive, and you are positive about this change. I am very positive about this change, and it's because I'm a person of, that is, Nan Patis, and that does not belong to any political party. It is very important for us as a sector to have him, and that understands the business of ICT, that understand how the ecosystem works, and of course, that is having an open door for us to engage with him, wherein we have challenges within the sector. So, I must say, so far, a young vibrant, quite a very, very smart minister that we have received from this G&U process. Okay, sounds very positive. There's a lot on the Minister's plate, and we're going to be talking about a lot of issues today that I think he's also going to have to deal with. And the first of those, which I want to spend some time talking with you about, is the switch off of 2G and 3G networks in South Africa. Telcom, of course, has done it already. They were one of the early ones, but they didn't have a lot of the legacy that Verticum, MTN and CLC inherited. The previous minister, and I've possibly the minister before him as well, set deadlines for 2G and 3G switch off. I understand your take on this, is that it's not necessary, that it should rather be left to the operators to determine when they should switch off these networks. Just take us through your thinking around this, and what do you think should actually happen? All right. First of all, unlike, let's say, other countries that people will look at in South Africa will license spectrum on a technological neutral basis, meaning that the 2G, 3G spectrum that was assigned to network licensees has actually be re-firmed in some instances for other purposes, especially those that have moved our way from 3G. Or Telcom? Yes. So it's not like they retain the spectrum to ICASA, they have re-firmed it and use this like Telcom to your point. Now, our issue is this, you don't have to set a deadline, there is no rush to set a deadline, and actually, there's not even a requirement, you know, otherwise, allow the industry to run the process and report to ICASA as the regulator, where they are in terms of trying to make sure that, indeed, that we don't have 2G legacy networks in place. However, there's a caveat, why we're saying this should be led by industry. We are saying that there are a lot of systems in South Africa machine to machine that still rely on 2G, especially 2G networks, if you think of the likes of trans-net, for example, transnet still has a lot of the infrastructure relying on 2G network from a machine to machine level. If you think of, then we go to, I say, end users, end users like myself and you people who drive cars, the cars that are still equipped with the 2G sim cards and system for a tracking device, so that means the tracking industry might be affected as well, then also to end users as well, there are a lot of people that cannot afford 4G handsets. And I still, even here in how they are still relying on 2G handsets, just from an affordability to point of view, because they just want to be conducted on the handset, they can't afford a device such as a 4G. And we are saying, before you move ahead with dates and all, let's sit around and develop a framework, come in, develop a framework, how will the transition happen, how does everyone see that transition happening, if you think about it, we used to have, when cell phones first started, they were very expensive, but now 2G is the cheapest, cheapest handset, you can even get 1 for 150 rounds, if yes, if not less, but a cheapest 4G handset starts at, if it's not on specials, that's just above 1000 rounds, if you think that of our unemployment rate, the people that rely on social grants, there is no ways that they can afford that. And the reality is that because cell phones do not belong to network operators, they belong to OEMs, the OEMs themselves, they know that their 4G handset is taxed as a larger good in South Africa, therefore, an ordinary person cannot necessarily afford 4G handsets. So I was saying, come back, let's talk about how to implement this. So 4G handsets are the taxes applied to the smartphones, different to the taxes that are applied to a 2G device, for example. So 4G, as I'll bet the example, because I have an older phone, I think I have a 4G, you know that their handsets that cost 30,000 and above, and you won't understand why if the person is spending so much, that would be your 5G handset, we're not even talking about. So 4G and 5G, including their components in the South African context, beyond the VAT uptacks, beyond the, let's say because most of the handsets are not manufactured in South Africa, beyond the import duties, there is a luxury tax that is imposed on it. And the luxury tax that is imposed is over and above the other taxes that we know of, that is that it's treated as, let's say, you know, people who buy luxury brands, it's treated as such because it's a 4G handset. And I say, really think that government, because you want everyone to be connected. And remember, we were saying we don't even have like direct, say, interest in this regard, but to say, consumers, in order for them to afford this phone, the first step, make it easy for them to buy the handset, make it cheaper for them to buy, because even if the phone is broken, the, I say, the components is still far more expensive. So if your phone breaks down, say you have a handset, 4G handset at breaks down, you go to a shop, you say, I would like to get it fixed. They will advise you straight up, run up by a new one, because the components are as expensive. Yeah. Yeah. So, I mean, what should, we, to be zero rates, basic goods like, like May's meal, and I think fish and bread, and that sort of thing, from VAT. We're talking here about import duties on, on handsets, which in your view should be done away with entirely. Should we even be imposing any taxes on something that is actually a fundamental building block of participation in the digital economy? I'll say this, because almost all handsets in our context, they actually have some form of taxation, and, and especially those that are not, I say, the entire manufacturing chain is not in South Africa, you'll recall that there was somebody that tried to manufacture a thing in Guizununa Dai, a two-way trade point, a 4G handset, but that person is still a little to buy a component outside of South Africa. So, it's very difficult for any person, I know there's one in return right now, that is trying to do something similar, but they have the, from the 2G up until a 5G handset. It's still, it's very difficult for any person to actually, because we don't have, I say, we don't have a billion population, like, let's say India, China, it's difficult for anyone to make money from, from, from a handset in the South African context due to the taxation laws that we have. We may, the other taxes, let's say, import duties, and maybe we'll understand, because those components are not from South Africa, but the part that is within our control, which is the luxury tax, like, really, it's not a luxury good having a handset, can you make it easier for people to actually have access to a handset? That's what the point was saying there. Yeah. And that'll then help people get off 2G and 3G devices and onto those 4G devices. But in your view, should the Minister be setting deadlines for 2G and 3G switch off at all, or should it just be left entirely to the industry? Is there a role for the Minister in this process? I'll make this, I don't think there is a role, and we know this from, I said, sometimes we don't learn lessons, we know this from digital migration, that the industry and South African consumers take their own time to let go of devices, right? People still keep the old TV set, some people still keep the phone up until it breaks and there's nothing that can be done, and then we keep them for 4, because we don't have a lot of disposable income. So to set a deadline, it's almost like the deadline is arbitrarily set, no one is looking at the impact of what will happen. So where we are as ACT, this is not a role of a Minister, certainly, but a regulator can be given guidelines to say, obviously this project, make sure that South Africans actually get are not using 2G handsets, tell us how we can facilitate to make sure that more South Africans are using 4G to the point that we're seeing earlier around taxation, relaxation of tax attempts, and we're not even saying 5G handsets, we're saying just 4G for now, because 5G is a total different ball game, because when we are looking at a handset that is $80,000, I don't know how much we will be reduced to in order for it to be out. It will come down eventually. Yes, it will come down, but when you're looking at that price, it's near impossible, but when you're looking at a price base of $1,500, at least you know, you're talking about a smaller amount compared to the so we're just focusing on 4G for now, 4G handsets. I know there were some noises, I don't know if anything was ever gazette or any policies or regulations we were introduced, but there was some talk about banning the importation of 2G and 3G handsets, so that people aren't still buying them, I believe that today you can walk into pep stores or acamens or whatever and buy a 2G handset. Doesn't that make sense? Shouldn't there be a policy in place that says, sorry, we can't import these anymore, probably coupled with the scrapping of import duties on 4G devices to bring the cost of those down? Yes, that is the conversation we had in the previous administration with the Department of Trade, the industry and competition and we said, this is one of the things that they must consider, that they must scrap it as they have done with the dumping of the older TV sets, however, they still, I'm sure they're doing their own internal processes, we still have to have engagements with the new administration, that is what we prefer, that indeed there shouldn't be any resale of 2G handsets. One, also from a CASA point of view, we actually sent them a proposal as to how they must consider removing the 2G type approval certificate, remember the challenges also start with the type approval certificate, was that type approval certificate still sits on the numbering system of a CASA, so you can bring a 2G handset, whereas if a CASA consults and say, this is the plan for Santa Fe, we want to move to 4G, we want to remove this 2G, 3G certificate, but your 2G 3G handset will still be supported in South Africa, up until the product is like obsolete, but they also need to do that as a first point of call. There's of course a new minister in DTIC as well, have you had any engagements there? Not yet, we haven't had any engagements with the minister at DTIC yet, it's one of the ministries that we are looking at engaging with, also as well minister of finance from a taxation point of view, because we had previously returned to, I think, what is it, revenue services, so I always called it the old one, revenue services, so I was saying, it's So, when I grew up, I want my job title to be the receiver of Raven and Eve. And then who advised towards the end of the administration that, for previous administration, look, we only implement, as the receiver, we only implement the taxation. The person that we need to speak to is the policy maker. And then we can start the conversation. So although the minister has come back and one people to minister has come back, we're assuming that it's a new administration, so we'll have to restart the conversation once again. Okay. Yeah. Okay. So some of the network operators suggested that 3G will be the first to go, and that will actually keep 2G networks in South Africa. Do you concur with that view? So 3G is still, I say, a lot of them, and we can see there's even fewer handsets that are 3G that are in the market. I think they've proactively moved subscribers from 2G, from 3G, apologies. I think even Casa's report last year actually even points to the fact that there's fewer connections for 3G and actually 3G connections have remained actually reducing. So especially, I say if we document MTN proactively, they are actually making sure that 3G is not there. Here lies the problem with 2G, right? 2G, especially in rural areas, think of the rural provinces, 2G is able to cover a larger area. Because of the spectrum bandits using? And so it's very annoying that the type of end-user you find in a rural area, and it's highly unlikely to change a handset to a 4G. And therefore, 2G will still remain for a long time. That's the first one. Secondly, for the reasons that I said earlier, especially for machine to machine, because this is a quite expensive machine if you were to chat to transmit, and the guys that are doing tracking of Casa, because they have to recall a lot of cars, as to what does this mean. So it will still be with us for a while. But there has to be that, I say, for new word that people, there has to be a journey, a road map that takes us there as to how are we going to ensure that 2G, especially from a connectivity, from a cell phone, a connectivity, is actually not longer in our system. How long will it take us there? We know how many years my digital migration took us. So how long? What are the building blocks are we putting in place in order for us to reach there? So that's the things that I'm saying, because you have this machine to machine problem, it will be with us for a long time. I've heard suggestions that what we may end up having is a very thin sliver of spectrum used for 2G to support these legacy applications, these embedded sums of transnet and elsewhere in security companies and logistics networks, et cetera, that just a few megahertz of spectrum be reserved for 2G, and that the rest is then allocated to 4G and 5G. Do you think that's what we're going to end up seeing this thin sliver that's going to be with us for decades to come? I'm not sure the size, because we have the issue of run connectivity that's doing this to be low, taken care of, and if you're looking at it from a, if the other building blocks are not there, let's say 4G, handsets, and everything, it might not be that thin, right? It might not be that thin, but if we're committed to ensuring that a lot more people are connected and have 4G devices, then it would be very thin, just to support those services, because when I looked, when we had the conversation with transnet, I was like, okay, it looks like we'll have this for the next at least 20 years, because they've made huge investments, it's a huge investment to expect a person to change, and those are the people that were open with us to say, look, this is where we are, and you know how much money government is put into transnet, why would they fix something that works, right? And there's no incentive for them to fix a software system that is working for them. Let's talk about some other issues now, the other things you have on your plate, one of them touch words, there's been no load shedding now for about 120 days, not sure exact number of days, but it's somewhere in that region, but there's always the possibility it's going to come back, it was a nightmare for the network operators when it was happening, maybe just take us through the impact that load shedding has had on your members and how they've been dealing with it, and what some of the issues are that you've been discussing with the regulator and also the policy makers around this issue. Okay, perhaps let me start with your opening statement, the handwritten plus days of no load shedding, there is no load shedding, but there is no reduction. Right. And I'll make the very simple example, I stay in Troy, one of the affluent suburbs, blessed enough to have a sunlight in my house, but there are people in my area that have been without electricity for the past 72 hours, how yes, the council keeps sending right types and says how there's no ETA, he does not have ETA, people have been without electricity, so there is that load. So once it looks good at a national level, there are pockets where in load reduction is happening, and then there are pockets where in infrastructure due to the load shedding that was happening before, so for instance, the site that is closed, the substation that is closer to my house is called mirage, it just drips just for no reason. So there is that, so there is that, I'll say reduction of quality in terms of the connection for electricity. The municipal infrastructure. Exactly. It has really, really diminished, and you know, it's a big metro, it's not a small metro. And if it's happening in Swane, I think what has happened in, is it Citrus style, Citrus style with storms, they've had massive, massive power outtages, as we call them these days, and then there is an impact. So on load shedding, so in a manner, this is what has happened with load shedding. Since 2022, we've had, I think it started being the West July, August, September, it was the hardest load shedding, and there is no single member that has not been affected by load shedding. And to this end, at that time, you may recall that there were promises of an 18 month plan as come had this other plan, and people were forced to come up with alternatives. So the first one that has been very popular at that particular point in time was generators. And generators, as we know, it's not clean energy at all. And then it's very, very expensive. And with the cost then of buying a generator and cost of diesel, people have to look at other alternatives, such as the IPP, of partnerships with some of the IPPs, then using their properties for solar power. And I must say, when we put the application to national treasury for diesel, we saw an issue when we were looking at the financials, say the listed members of ours would take their listed information, look at their financials, look at their KPAC spend, and you're like, wow, there's problems here. This means money that was supposed to be utilized to roll out 5G services is the commitment is being shifted to load shedding solutions. It was at a very, very, very high pace, and that for us was a great concern. And those are the conversations that we wrote to cast last year, March. And we told them and demonstrated that this is the challenge that we're faced with. People, just the six, just about how small the six is, just the six, this is the amount that they're spending and had figures just showed collectively how much they were spending. And the saying, we are concerned that this will make the rate, the agenda for purposes of 5G. And people are still paying for that spectrum that they are not building at the same pace that they were expected to, can we have a consultation to be cast a year to consult. And by the time they consulted, they consulted when we were 15 or 60 of the no load shedding. And I think everyone is missing the point that despite the fact that from a SCOM national level, which I call it like the rosy picture, the glossy picture, there is no load shedding. But the reality on the ground is very, very different. I mean, the city of Joba, I even lost count. We haven't even received reports from our members how the crisis of city of Joba, when it comes to power, has affected them because it has been so frequent that when they tell us it would be a point that would be like, this is where we are. This is how much we've managed to spend, just to be able to keep up with the outtages that have been experienced in the city of Joba. And these are small cities, Joba and Futura are very, yes, they might be big in terms of the people that live here in terms of their income, but comparative to other, I say, cities, if you look at KZN, the impact they just spoke about Citrus style right now is at that level. It happens and it's not happening once in a while, it's happening so often. So the impact of low shedding, not only on network operators, but on municipalities and on consumers, is felt. I'm sure if you are on social media, you see how many people complain. We don't have network, network is never available. When there's, when they don't have electricity, there's not a, so that the issue for us is that we believe that perhaps with the just energy, a plan, which would, won't be overnight right, we believe that perhaps there will be a long lasting solution. But I don't think regulators, especially those that are outside electricity that are dealing with network operators, such as ICASA should blindly accept what has been reported as the 110 days, 100 or whatever things, or for for for for for for for. It's not the reality of what's happening. They must, actually, they can even go to their counterparts at NERSA and say, just tell us, little by situation, what is going on? If, if let's say they have to do their own sanity check, just to check the, as to what's happening at Citrof Cape Town, what is happening in Citrof of Jobec, China, you name it. So that's why we're saying that it is, the impact is felt by everyone at this particular point. Just to remind me about diesel. I don't know if it was actual, it was another industry body or the operators directly, I forget the details, but there was a request that the diesel cost for the operators being reduced through through the elimination of taxes. Just remind me what that was about and has there been any response from the government to that request? Oh, it's a very funny one. So it was at that. It was at? Yes. Yes. So because the cost of diesel was just going so high, then we let it okay, let us make an application to government to consider like they've done in the, I said, in the agriculture, in mining and food processing, that diesel for purposes of connectivity, not to be text for the, you know, there's the road accident fund component, right? So the road accident fund component has different pricing in it. So we just wanted, we wanted them to just remove the text for about six cents. Right. And we had the engagements with national treasury. They told us, look, your application is sort of receiving attention, but we are not going to give you a formal response. We don't respond to anyone, but you must listen, yes, I like your face. You must listen to the minister's budget for speech should your sector not come out. That means you're not successful. Wow. Yes. It's quite shocking, right? And then we're like, okay, say there was a defect in our application, how will we know? Can you please tell us what is defective in terms of our application? How can we improve? Because there's no point in putting an application in the out and then you're still given like the same answer, wait for the minister's budget vote save to say, did you not receive a response? Good grief. Yes. But, but I guess we did receive a response because the minister did not announce. Right. Yeah. And it's in writing. It's quite bizarre. It is bizarre. Yes. It is bizarre. Okay. So, will you write again? We are thinking about it, especially now, because we know that some of our members just want to check the data, how much they're spending on, because that year in a period of six months that spent in excess of just under 1.1 billion, just in that period. And it was quite a lot. And if you're thinking that our members are not the same in terms of size and one member did not even have a generator, we're only looking at five members. That's how bad it was in terms of, for, for, for. It almost seems like a, I mean, we often talk about policy conflicts in the telecom sector where, you know, the government, in effect, sets the policy that affects telecom in which it owns a 40 percent, whatever it is, stake. And the national treasury is collecting taxes when there's load shedding from operators buying diesel, is it in the national treasury's interest to actually do what's in the interests of telecommunications operators and growing the economy when they're collecting taxes on the back of it, raises some interesting questions, does it not? It does. And I'll say why, for us, I actually said, because I looked at when the budget four plus was announced last year, and I said, and then we didn't have South Africa was not in a good financial state, then I was like, now I understand why our application was not really responded to, it's because of where we find ourselves as South Africa. And therefore, why we're in a person is, I say a person because they're looking at the sector holistically, it's contributing so much towards the national revenue fund from the different taxes, if you think about it, with such a tax license, the license, the license, annual license fees, spectrum fees, and then they have their own income tax that they're doing. Why would I give them a roof as a national treasury, because obviously, this car still has milk. And that's how, because I was like, I see, where it's going, however, if you're looking at it from a sustainability to point of view, if you're looking at the financials of some of my members, especially the listed ones, you can tell how badly low shedding has affected them. You can tell that, especially those that no longer enjoy group status, they'll no longer have operations outside South Africa, you'll see how they've done badly from a profitability to point of view. And then, it's, I don't think they are looking at the sector from a how to sustain it. It's, and if you're looking from an infrastructure, I say network industries, look at water, look at electricity, look at transport, look at telecoms, who is still making some, some form of money. The South Africa, because those are the four most active industries that are sustaining the economy, right, but these three, we know water has its challenges, we know electricity has major challenges, we know from transport, what is going on there, and these are mostly state, I say state run and state owned, and this one is privately owned. So you are likely as a sector to go and attract investment outside. So it's not a priority, that's how because even for the response, how it was written to, I thought, our work done government, I've never seen such a response, but it was just bizarre to me, I said, wow, it took me back, yeah. So the network operators spent billions reinforcing their networks against load jetting on batteries and other solutions generators, diesel, et cetera, et cetera, but this is unfortunately born with criminals out as well, and the theft of particularly batteries and syndicates involved in this as well, from base stations is obviously having a huge impact. How serious is the problem of crime for telecommunications operators, and are you satisfied with what's happening to address it? I was going to say it's extremely extremely serious, and it is so serious that a couple of weeks ago, with two other industry associations, we had to, within the ICT sector, which is Comrick and Digital Council Africa, we had to sign a memorandum of understanding as to how to deal with the issue of economic, if, of economic sabotage of critical infrastructure. Because we saw that, whilst Comrick focuses mostly from, I say, law enforcement, a point of view, making sure that law enforcement proactively has laws that are enforced from, from, I say, from a magistrate to a police officer, how which form needs to be filled, how to put task force together. Also then from our side, we make sure that by the time they go there, they have prepared research, they are able to demonstrate that this is the impact of, of this sort of crime, because we had come from a history in, this crime has not taken us seriously, but now it has been taken seriously, were encouraged by areas such as, I think, Gewecha, and even here, I think, in, in, in, in Santon and Soweto, the way in there is been serious prosecution, people have been given hefty, hefty sentences in terms of the, the law of Beatrice as, as selling of, of, of, of, of, of co-pine and related this, and just plain a destruction of, listen to this fibre, just plain destruction of fibre. So, so with our having, that we have that relationship that we have established that it is that serious that we know there are other crimes that are also critical, but we are saying, way in there is vandalism, way in this destruction of infrastructure, way in there is theft, it means that community will be disconnected for a while, they will not even have access to emergency services. The police will not even know what is happening in the, in ambulance, it's not even about just being economically active, just the both basic of these, the fact that, uh, network operators are required to connect schools, some of the schools will just be connected for the fun of it, but the infrastructure is not active because it has been stolen. So we have, uh, put together that, that MOU, now we are putting together a proper program of action that will say, uh, over the things that we've identified, the research, the PR, the relationship with law enforcement agencies, one more, uh, can be done, and how quickly needs to be, uh, effected, because now we realize that there's a new administration, we have to talk to, uh, different people who have to introduce ourselves to minister sense of, um, kunu, uh, you know, because it has a different posture, which we, from reading, it looks like, uh, it's, it's very good. So yeah, those are the things, it is quite, it's very bad. And we, I mean, some of the campaigns that we were running, even on community radio stations, you will laugh, I only know three languages in South Africa, right? And they will take me to a radio station, I don't know the language, but, uh, they would in translated for me, as I speak in English, they'll translate and they'll explain to communities, the network belongs to you, wherein you see people that you do not know in your area, call, uh, this number, you know, you have a number on your phone that you can call. If, uh, you have a voter com empty and tell com number, remember these people are the people that will make sure that you do not have connectivity inform your South African police services that there are people that you do not know in your area, especially the, there was a time a long week when it started from PE, uh, go back, uh, quince, uh, grams down, quince down, uh, somewhere in the trans guy region, going down, down, down, down until in Brazil, not that we looked at the map, we couldn't believe it that. So obviously this is like the same people, but they're targeting areas along the road, like the rural areas, you know, like, no, something got to give, let us try and do things differently. So it is, it is, uh, uh, a massive issue. And then the sad part is that most of the pictures are not even available for resilience in South Africa. What happens to them? They go across the border. How do they get across the border? They just walk across. I don't know how they, I don't know how they go across, but there's no use for them in South Africa. It can use them for anything. Yeah. But can they be used across the border and how? I don't know. You never know. People are innovative here. No one can use them for anything. If they're just crappy act, they have no value within our context. And, and, and, and it's, it's mostly, we've seen, I think, uh, Namibia, Zambia and a bit of zim is, is, is, is, is not as bad. Okay. Yeah. You're, you're still going to meet with the police minister, the new police minister. Not me. I'm sure it will be a comrade. Okay. Yes, it will because that's more law enforcement. Okay. They deal with the risk of everything and they understand the law enforcement, uh, uh, issues how they happened. Yes. I was going to ask you what, what two or three things would you like to see from the police minister to try and fight the scourge? I mean, are they easy wins? There are is a wins that we've identified for status, uh, which we've seen even here in how dang first, uh, partnership with the police, uh, the network operators and the communities themselves. Those things are work. We've seen them in Soshang over. We've seen them in Soweto, including the community policing forum. Those we've seen their work that that relationship has to be strengthened and you don't let go because there's a change of leadership, let's say within sebs. And then, uh, sebs itself has to ensure that the appropriate forms, uh, completed the proper statements I take and so that, uh, national pressure, precision authority has a cost case that they can take forward. So it is more proactive and also when the data does not work, what is the next step? So those are the things that, uh, we have been working with that to say, uh, leads the charge, uh, uh, conbrick because you know all the players, they, and these are the things that are of importance. Okay. Yeah. Yeah. Okay. I wanted to add a bit about spectrum. Oh. Um, the multi choice and I think immediate as well have both said, uh, I forget where they said it may have been in any cost of process, but they said hands off our spectrum, anything below 690, we've given up the digital dividend bands to the network operators, everything below 694 hands off is for broadcasting. I know there've been talks in other markets about potentially using some six sub 694 spectrum for telecommunications. Does active a view on this and how that spectrum should be allocated? However, we know what happened at ICU and so far as, uh, the spectrum, our view is very clear. The future is digital, right? And if you all agree that the future is digital and if you all agree that the future is video and anything that comes with it, meta universe and everything else, it goes without saying that then, uh, South Africa needs to have the conversation as to the spectrum should go to telcos, right? And without bashing anyone, I say in the broadcasting space, but looking as to what the future looks like, because you've already seen even from both of the companies you mentioned, they're already trying to move their services to become more digital because one is losing subscriber, the other is losing viewers. So how do you support that moving forward? And I know that it takes long, I'll say it takes longer for our sectors to agree. I'll make that and then I mean, you may recall that we even had a discussion about something called digital audio broadcasting that went out of no way that there's always this idealism or romantic idea that we are going to come up with an alternative that is great. And in our experience, we've seen that South Africa from a broadcasting landscape, um, the growth is moving, it's more digital, you've seen this ABC+, I mean, you wrote an article about it, I think last week or so, yes, that everyone is moving there. So why do you say I want to hold on before? What is the rationale behind it? I still don't, I still for me, it just doesn't make sense. Okay. So more spectrum for the telcos? Yes. Okay. But not at 14 billion. All right. No. Those are not sustainable numbers. I was going to ask, what do you want to see from the next spectrum auction? I think for status, we've lent our lessons, we've seen living with low shedding and then we've seen that some of the, especially the last round, the pricing was so ridiculously high that currently you, there are some that are still struggling in terms of seeing a return on investment on it. So Casa has to go to the drawing board and say how to effectively price spectrum, not price it in a way that is saying how do we save the economy of South Africa? Okay. But to price it, make sure that there's sustainability and attract investment from a network operator point of view. So that's in the long run survives, not short term gains. Is an auction the best way of licensing spectrum, high demand spectrum in your view or should they go back to the beauty contest model? I don't, I say that for me, I think the auction still works, right? But maybe not the high reserve prices. It's the issue is that high reserve price. That's where the problem is. I think it works because it just actually shows you practically what is possible. And the beauty contest, I think Casa has doubled with it for a while, if you've seen, I think the last one they did was on the radio, radio is in radio, I think Northern Cape or something that didn't attract anybody else that could make money out of it. And I think auction works, but just know why the reserve prices, and make sure the barriers are too entry and not as high as the last auction. Okay. There's been talk about spectrum trading in South Africa for many years now, but it never seems to happen. Do you think we should be moving quickly to introduce spectrum trading? And if so, why, if not, why not? So for me, okay, for me personally, I believe that one of the reasons that ACT has been established is due to gaps within the SA South African landscape, such as research. We've been having the conversation about spectrum trading since 2015, if I've not been happy, 2015, just after the World Cup, Soka World Cup, and surely, without taking sides, you know what is the benefit for South Africa as a regulator. You should know that this is the one element that is likely to benefit South African from a making sure that people are connected, making sure that the spectrum is efficiently used. You know, you've experimented with efficient pricing of the spectrum, well done, right? And then you've done it and you've executed it well. What about why are you not taking the lead in terms of spectrum trading and saying these are the pros and cons, do you think it will work in South Africa? And I think there is reluctance to do that, but I think it might be beneficial for South Africa to have spectrum trading, because if I say now, I was just licensed with spectrum, right? And I have, because I've paid so much money, right, for it, I cannot, I cannot, I can actually not realize the return on the investment that I made, but you have the resources, right, to actually exploit, I know it's a bad word, but it's meant in the positive to exploit that spectrum for the benefit of end users. And that is likely to generate more revenue, even from a fiscus, from in the Casa point of view, as I'm still figuring myself and trying to attract, attract, I say, investors into my space. But now, because I don't think it's fair that when I cannot utilize the spectrum, I just retain it to be Casa, right, because I've paid for it, right? So there must be something that I'm able to get from, from us having that kind of a relation. I think it's something that perhaps we need more food for thought from regulators and assets researchers alike. Right. Yeah. Why do you think there is that reluctance to tackle it, tackle the issue? I'm not sure, but I always think it's that thing of thinking that person that bought the spectrum, that got the spectrum the first time is never to make more money. So as from a fiscus, I might want more money if it comes back to me, it just doesn't, there's no, for me, there's no logic algorithm that I can find that I can say this is tangible. That's just me off the cuff at this point. Okay. It's not an ideological thing. Yes, yes. Oh, these are an ideological thing. Okay. Yeah. Yeah. Lastly, I want to chat to you about something that I had a long conversation with, a Shamil Juice, a bit vertical about this probably last year sometime. And that's OTTs, as the telcos like to call them, streaming companies effectively. And there's concept of fair share. Now the operators are arguing that companies like Netflix need to pay something for the network operators to carry their huge volumes of traffic across their infrastructure. And I've never really understood this argument because Netflix is, the consumer is buying the bandwidth to watch the content that Netflix is providing. So someone is actually paying for that network connection. I'm guessing since you represent operators that you're on the side of this fair share proposal. It's actually wrote a paper, but I want to make it simple. Take me through it. No, but I want to make it very simple because one of the cases that we followed, especially around Netflix was what happened in Singapore, right? And Singapore has been a very complex and interesting case because Singapore understood a very strange market, understood fair share before anyone else understood it, but understood it from a broadcasting point of view, ironically. So think about it this way, SAPC, Imidia, multi-choice, PowerFM, wherever it is, in order for them to connect, in order for them to show their content, to people to listen to them, they pay centech money, they pay a signal distributor, they pay a satellite provider, they pay whomever, right? Will they pay a content delivery network in a data center? Correct. They pay somebody. Netflix is based in Netherlands, right, amongst the countries that are based in Netherlands. They come in streaming into your ... they don't pay anything, they are you as a South African, you are supposed to be paying your TV license to help SAPC to be able to purchase the centech transmission cost, then they say, "Ah, this doesn't work." They must contribute something, because the person in order to have a handset to watch TV, you paid somebody, right? Why might somebody come in and waste space? And then same Singapore had lots of ... a long case with Netflix and their telecom, I say they are equivalent of telecom in the South African case context, wherein Netflix is required to interconnect, like interconnection in our world belongs to mobile fixed fix, that kind of thing. To stand in interconnection agreement, they are refused for years, save for this year. They lost Netflix and they are compelled to ... They lost house, record cases, record cases on appeals, cross appeals, and essentially this is interconnect and they shall pay the telco, a network operator, X amount, they pay it to year X, that is the extreme example. So now you go to countries like the US certain states, EU, except the UK, I want to make that exception, we're in there saying, in order to think about it that you pay a fixed and South African, you pay a fixed amount for, I say, to connect to your data. So you have Wi-Fi connection at home, you have a fiber line here at the office, you pay a fixed amount with guaranteed speeds, that your speeds will be X amount of speeds and at this particular point. And from a network point of planning, they have planned that this is how much you've consumed, this is how much you are likely to consume in the future and let's say you have future children and grandchildren, this is how much you are likely to utilize. Now comes Netflix, all its conveniences, Netflix, you pay is Netflix, I don't know, hydrogen whatever rents, I don't know, my husband pays for these things. Well, 99, I think, I don't know, then we'll always pay for these things. So you pay the amount that you pay Netflix, right? And that's it, I think else happens within the South African context. And then a network operator now has to adjust the quality of service for me and you to watch the networks at this quality that we were used to from watching any other I say video and it's not Netflix alone, it's the number of them. And we are saying, one of the proposals that we're putting forward, fair share, they must assist in terms of building their networks. And government has a number of functions that they can look at, they can even make them, because remember is an expectation that there must be high speed internet in South Africa. How do they contribute towards the high speed internet in South Africa from an infrastructure point of view to make sure that those areas, let's say, network operators are unable to go to in terms of connecting and building infrastructure, I say 5G networks, let's put a fund so that infrastructure is built so that we are able to roll out good services for everyone. It cannot be that when you have a problem of quality of service, that network operator again is not functioning. We must take a collective responsibility to make sure that even those people that are offering videos, especially because those videos are high, they consume a lot of bandwidth. How to, of course, it doesn't mean everyone will be contributing towards this fair share arrangement. So that's the one option that we're putting together. And we've put three options as to how the fair share arrangement should work. And I'll give you the paper, I'm not going to give you the other ones. My paper, our paper is finalized, but it is with the editors just to make sure that it looks and reads correctly, it has the data that is required and we will be launching it just to show this is what research shows. This is what our context in South Africa says, government, big policy and legislation that may show those that come in in South Africa contribute towards ensuring that we have proper infrastructure, high-speed internet for everyone. When can we expect this paper? We were targeting the end of this, this is July, end of July. End of this month. End of this month. Well, we'll look out for that. Oh, we'll definitely send it to you. You had good coverage on Text Central because I'm quite skeptical about the fair share proposal on my say. So I'll put you in the paper. I get the impression that what's happening is the content providers are effectively turning the telcos into low-margin dump pipes, which they don't want to become, and that's what this fight is about. But I look forward to reading the paper. I'll introduce you to somebody based in Pretoria that has done wonderful research within our South African context. He's based at UNISA. Okay. Okay. That sounds great. I look forward to reading that paper. There's so much more we can talk about. But we are out of time. Thank you. Thank you very much for joining us today. Thank you for joining us today. Thank you. Thank you. Thank you so much. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you so much for coming into the Text Central Studio and look forward to inviting you on the show again. There's plenty more to talk about and I'm sure you're going to be having some very interesting conversations with the new politicians in the space in the coming weeks and months. I look forward to seeing how that progresses as well. So thank you so much for your time. Yeah. Welcome. Thank you for having me and thank you to your viewers and those that will be watching as well. Thank you. Thank you. Thank you. (upbeat music) [BLANK_AUDIO]