Value-Added Network Services (VANS) Deadline Tight, Says Cell C

Cell C, the country's third cell phone operator, said yesterday that the regulator's deadline for value-added network services (Vans) to have 30 percent black investors might not be feasible in the stipulated time frame.

The regulations proposed by the Independent Communications Authority of SA (Icasa) state that Vans licensees will be required to have the minimum empowerment shareholding by October.

Cell C called for the introduction of transitional measures and medium-term targets to achieve the empowerment equity shareholding.

The Vans market value is estimated to be R3.3 billion, excluding Telkom operations (SAIX, Intekom and Telkom Internet), which have a share of more than R4 billion in this sector.

The Internet Service Provider Association, which represents  more than 80 Vans, continued to argue yesterday that the suggested empowerment shareholding was unrealistic for small businesses, some of which are family owned.

But Cell C supported the objectives pursued by Icasa in imposing a 30 percent empowerment shareholding on Vans operators.

Motorola Southern Africa attempted to avoid the authority's question on whether it was having an empowerment partner on its equity shareholding.

Ronnie Seeber, Motorola Southern Africa's government relations manager, said the company was trying to deal with equity shareholding, but "it's a difficult process".

Zolisa Masiza, the chairman of Vans regulations hearings, said Motorola should not be pressured to respond to the question but could file its written answers by next week Tuesday.

Seeber said consideration should be given to extending the end of September deadline to allow Vans licensees enough time to stabilize their businesses before they embarked on an empowerment plan.

"The time frame as it stands is too onerous in some cases," he said. Motorola's empowerment credentials could be addressed by the information and communications technology (ICT) empowerment charter.

In November last year, the ICT charter working group released a final document proposing progressive scorecards.

The scorecards will enable black people to have a 30 percent target for direct shareholding by 2015, dropping the 35 percent equity shareholding target.

The document states that a minimum of 30 percent of enterprise development should be directed to black-owned small businesses.

The Communications Users' Association of SA (Cuasa) believed the empowerment drive should take place within the context of the telecommunications sector.

"There can be no objective, moral, legal or constitutional rationale for differentiating Vans from the ICT sector to be affected by the ICT empowerment charter," said Cuasa.

By Gugulakhe Masango
Published on the web by Business Report on January 20, 2005.
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