PCFormat Forum Archive

ICASA rejects both SNO 51% bidders

Johannesburg, 28 August 2003] - The Independent Communications Authority of SA (ICASA) has recommended that the minister reject both bids for a 51% equity stake in the second national operator (SNO).

In a media briefing in Sandton a short while ago, ICASA said the bids submitted by both contenders, Two Consortium and CommuniTel, failed to meet the bid criteria and funding requirements. ICASA suggests the government consider other ways of managing the SNO process.

ICASA said in its official statement that it “has recommended to the minister that the government formally closes the 51% application process into the SNO under the present circumstances. It could channel its collective energies towards creating real and sustainable competition to the incumbent.”

ICASA has submitted its recommendation to the minister, but had not discussed it with her yet. The minister will not necessarily have to accept the recommendation. The bidders are scheduled to hold media briefings shortly.

The latest recommendation comes after the earlier round of bidding, in which ICASA decided that neither of the first bidders, Optis or Goldleaf, were suitable either.

ICASA said it had taken into cognisance the need for competition in the South African telecommunications market, and specifically in the public switched telecommunications sector, to encourage innovation, reduce prices, and ultimately benefit both business and residential consumers.

The statement said: “We realise that the impact of such competition on the economy as a whole is critical. We have further taken into cognisance international commitments such as SA's WTO commitment to introduce a duopoly this year. However, our commitment, like that of the government, is to introduce effective, real and sustainable competition, within the ‘managed liberalisation' framework set out by the government, hence the recommendation announced to you today.”