This morning Neotel suffered a major network failure resulting in a lengthy outage that has severely disrupted telecommunication services in the Johannesburg metropolitan area. It appears that a motor vehicle crashed into a telephone pole that carries the main Neotel optic fibre link between their data center in Johannesburg and the Sandton CBD.

Andy Openshaw, Chief Commercial Officer for ECN, says: “The outage brought down a significant number of our customers resulting in them being unable to make telephone calls or access data services. We are currently assessing the financial damage to our business, but it is likely that it will run into hundreds of thousands of rand.”

“It appears that this crucial link is neither self healing nor fully meshed”, says Mike Britz, COO of ECN. According to Britz, “ECN was not notified by Neotel of the network failure and had to diagnose the problem itself. We have also battled without much success to get any feedback from Neotel and they appear to have no automated redundancy or back-up plan in place.”

John Holdsworth, CEO, of ECN, says: “This type of network failure clearly illustrates why VANS should be allowed to self provide their own networks. It is totally unacceptable that we should be forced to lease capacity from operators who are apparently unable to meet accepted standards of service. ECN currently routes voice and data traffic for many of South Africa’s top companies and we cannot have disruptions, which impact our customers’ crucial business operations.”

Communications minister Ivy Matsepe-Casaburri’s appeal against the August 29 Altech judgment is merely a thinly disguised attempt to protect the incumbent operators from competition. Even worse, it means that the Independent Communications Authority of SA (Icasa) now has an excuse not to issue the new electronic communication licences that would finally have levelled the playing field for value added network service (Vans) providers.

This is outrageous and unacceptable. Both the communications minister and the department of communications are out of touch with the mood of the information and communications technology industry and consumer frustrations in general.

The industry was celebrating the landmark Altech judgment as it removed the regulatory roadblock that had been such a stumbling block to progress for so many years. Even the incumbent operators appeared to initially welcome the ruling. Vodacom CEO-designate Pieter Uys, speaking on Talk Radio 702, said the company was unafraid of competition.

Neotel CEO Ajay Pandey holds a similar view. Speaking as part of a CNBC Africa panel discussion, he said “competition was good for the market and Neotel welcomed that”.

In a well-functioning market, competing suppliers are incentivised to reduce costs, pass reductions to consumers and innovate with new products and services. The regulatory roadblock we’ve been living with has prevented this from happening in SA — and the ultimate loser is the long-suffering consumer who has to put up with dysfunctional suppliers and unacceptably high prices.

Now communications minister Ivy Matsepe-Casaburri has said she will commence a process to issue a policy direction to Icasa, and that her department will expedite an amendment of the Electronic Communications Act. It is exceedingly worrying that the government can seek to change regulations when it loses a court case.

We believe Altech may appeal the appeal, but if that fails, and the minister’s appeal is successful, ECN will call for an industry-wide class action which we’ll take right up to the constitutional court if necessary. We will back Altech all the way should they choose to fight this appeal.

The major benefit of the court judgment on August 29 was the fact that it levelled the playing field for all operators, who for the first time had the opportunity to obtain the same set of licences and conditions as the incumbent operators.

The fact that the judgment enabled Vans to self-provide was not the main benefit as far as we’re concerned. The biggest plus was that it removed the regulatory risk with which Vans have had to contend for years.

I am disgusted that the minister’s appeal has yet again delayed the issuing of licences to Vans, which was meant to happen from today.

Icasa has simply not lived up to its independent status. If it was unable, as a result of the appeal, to issue the individual network licences, there was no reason why it shouldn’t have issued us with individual services licences. Even though these do not allow for self-provisioning, at least they grant Vans significantly more rights than our current licences, such as geographic numbers, access to fixed-line number portability and carrier preselect regulations.

The net effect of the appeal is that more than two years after the Electronic Communications Act came into effect no new electronic communications licences have been issued. Nor has the regulator introduced the regulations mandated in the act, meaning that Vans will continue to operate in a climate of uncertainly that protects the incumbents and hampers competition.

We were hoping that this week would finally free us of the crippling restrictions under which we have been operating. The minister’s actions have ruthlessly dashed this hope.  Yet again we face unacceptable delays which are bad for everyone — the ICT industry and the consumer. The only winners are the incumbent operators, and their shareholders.

DO YOU FEEL THAT YOUR TELECOMMUNICATIONS provider isn’t listening to you, or simply doesn’t understand your business? Unfortunately, the attitude of incumbent telcos in South Africa is based on a take it or leave it, ‘one size fits all’ mentality.

If you recognise this scenario, then the good news is that the commencement of the ECA in July 2005 saw emergence of a new category of telecommunications provider; the Value Added Network Services (VANS). Historically as providers of services, VANS are in an ideal position to tackle this problem head-on and replace legacy telco attitudes with a more consultative and collaborative approach.

South Africa is currently benefiting from a R50-billion rand investment boom in telecommunications infrastructure. What is driving these investments? A rising demand from corporate South Africa for high-speed networks that support converged services. A converged network enables voice and data to be transmitted over a single network, substantially reducing the costs of building and maintaining to separate networks. The technology also enables organisations to increase productivity and improve communications by making it possible to introduce applications such as remote telecommuting, collaborative whiteboarding, multimedia conferencing and unified messaging.

South African telcos are responding to this demand by developing next-generation networks (NGNs), with Telkom, Neotel, MTN and Vodacom Business all making recent announcements to that effect. In my few, digging up the pavements and implementing the physical services is not enough; incumbent telcos must also help their customers navigate the challenges associated with migrating to this new backbone. But it is only when next-generation networks are combined with next-generation mindsets that the incumbent telcos will be in a position to deliver on this critical requirement.

Unfortunately, based on the evidence so far, telco mindsets in South Africa have not shifted, and the traditional attitude of “I cook the food and you eat it” remains the norm rather than the exception. Many continue to operate in the belief that once they have delivered a physical service, then the ‘job is done’, leaving organisations wondering how everything fits together.

Incumbent telcos are technically and operationally restricted in their ability to adopt a collaborative customer approach, preferring to keep customers at arm’s length. Next-generation networks have huge potential to drive and support organizations business strategies, not just now but in the future. However, this can only be achieved through customer consultation and collaboration, extending services beyond the physical layer and delivering solutions based on commercial drivers.

By embedding these attributes into the company’s very DNA, service providers will be better placed to give organisations the confidence that their network will scale with their requirements. The outcome for customers is the ability to fully exploit the potential NGN in order to take their communications forward. The intricate alignment of capability and mindset gives them the control and choice of telecoms services that they need to make themselves successful. For many South African companies the next-generation has arrived not a moment too soon.