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South Africa’s telecommunications groups, led by the listed majors that are collectively worth more than R700bn on the JSE, are seeking an unusual competition exemption that would allow them to share information that could otherwise infringe the country’s antitrust laws.To this end, the telecommunication companies — under the umbrella of the Association of Communications and Technology (ACT) — have approached the competition watchdog seeking permission for rival operators to share limited planning information relating to the deployment of passive telecommunications infrastructure in qualifying rural, remote and underserved areas.ACT represents the interests of Vodacom, MTN, Telkom, Cell C, Liquid and Rain.The industry argues that the proposal is necessary to address the economics of network deployment in areas where low population density, difficult terrain and high infrastructure costs have left many communities disconnected from the digital economy, despite years of investment by both private operators and government. “This arrangement is intended to improve the viability of infrastructure rollout, avoid unnecessary duplication and accelerate deployment in areas where connectivity is most urgently required,” ACT’s application reads. At the centre of the application is passive telecommunications infrastructure, including towers, masts, ducts, shelters and related support facilities that form the physical backbone of mobile and broadband networks.Unlike active network infrastructure — which includes spectrum, radio equipment and customer-facing services — passive assets are often among the most expensive components to build in remote regions. Operators say the cost of deploying separate facilities in low-density areas can make investment commercially unattractive, particularly where revenue potential is limited.The problem is that many of the biggest efficiencies in rural deployment need to be realised before capital is committed, through co-ordinated site selection, civil works, power, towers, backhaul and capacity planning.— ACT CEO Nomvuyiso Batyi.According to the application, operators are already permitted to lease and share infrastructure that has been built. However, ACT argues that existing regulatory arrangements offer limited opportunity for meaningful co-operation during the planning stage, when many of the largest cost savings could be achieved.Under the proposed framework, operators — through an independent third-party and subject to strict safeguards — would co-ordinate only where necessary to make rural deployment more viable, said ACT CEO Nomvuyiso Batyi.The intermediary would identify infrastructure gaps and opportunities for co-ordinated investment without disclosing commercially sensitive information to rivals. ACT is seeking a five-year exemption period.The applicants stress that the exemption would be narrowly confined to passive infrastructure planning and would not extend to pricing decisions, customer allocation, product development, network services or any other activity that could distort competition.Batyi said the request seeks to address a specific regulatory gap affecting rural broadband deployment. “South Africa already has mechanisms for infrastructure sharing, but these are predominantly focused on post-deployment access — essentially sharing infrastructure once it has already been built,” she said.“The problem is that many of the biggest efficiencies in rural deployment need to be realised before capital is committed, through co-ordinated site selection, civil works, power, towers, backhaul and capacity planning.”The application comes at a time when government is intensifying efforts to expand broadband access as part of broader digital transformation programmes aimed at supporting economic growth, education, health-care delivery and access to public services.While mobile coverage has expanded significantly across metropolitan areas and commercially viable regions over the past decade, operators maintain that extending infrastructure to remote communities remains a difficult business proposition.The submission points to several barriers that continue to hamper deployment, including: sparse populations;challenging terrain; high construction costs; and the limited availability of supporting infrastructure such as roads and reliable electricity supply.“Rural and remote areas generally have lower population densities and lower demand for telecommunications services. This may make it difficult for operators to justify the high fixed costs of deploying network infrastructure in those areas, particularly where projected local revenue is insufficient to recover the investment,” according to the report. Network deployment in many remote areas often requires significant spending. “The most capital-intensive components of network deployment include site preparation and civil works, power infrastructure and backup energy systems, transmission and backhaul connectivity, security and maintenance. These costs are significantly higher in rural areas than in urban areas.” Moreover, many rural areas lack reliable roads, a stable electricity supply and existing telecommunications infrastructure. As a result, operators had to build supporting infrastructure before network deployment could even begin. The applicants contend that greater co-ordination during the planning phase could help address those challenges by reducing the need for unnecessary duplication of physical infrastructure.Without lawful mechanisms for exchanging certain forward-looking deployment information, the application argues, operators may unknowingly plan infrastructure in the same locations while other communities remain entirely unserved.Batyi said rural deployment had fundamentally different economics, and requires every operator to independently build the same underlying passive infrastructure could make some locations commercially unattractive. Vodacom and MTN continue to spend billions of rand annually on network expansion and modernisation. Telkom remains a significant infrastructure investor, while Cell C has shifted towards an asset-light operating model after disposing of much of its tower infrastructure and relying extensively on roaming and network-sharing arrangements.The exemption is not about reducing competition; it is about enabling limited co-ordination at the infrastructure-planning level in places where conventional competition has not delivered sufficient investment— Nomvuyiso Batyi, ACT CEO The proposal also aligns with a broader global trend towards infrastructure sharing. “Both the International Telecommunication Union (ITU) and South African policies advocate for infrastructure sharing as a key regulatory and economic mechanism to reduce deployment costs and bridge the broadband gap in underserved communities,” Batyi said. She insisted that competition in retail mobile services will remain unaffected.Operators will continue to compete independently on pricing, network quality, customer acquisition, innovation and product offerings, even where passive infrastructure was jointly planned or developed. “The exemption is not about reducing competition; it is about enabling limited co-ordination at the infrastructure-planning level in places where conventional competition has not delivered sufficient investment,” Batyi said. ACT believes the potential benefits of the proposed exemption extend beyond telecommunications operators. The organisation argues that improved broadband access could: support local economic activity;enhance access to educational resources;improve health-care delivery; and create new opportunities for small businesses in communities that currently lack reliable connectivity.Should the exemption not be granted, Batyi said alternative measures would still need to be pursued to achieve the same policy objective. These could include: regulatory reforms;greater use of public-private partnerships;increased municipal involvement;support from the Universal Service and Access Agency fund; and other shared infrastructure models designed to reduce deployment costs.Business Times
