Transcript of DETERMINATION OF DOMINANT POSITION SECTION 78(4) OF THE COMMUNICATONS ACT, 8 OF 2009 (‘THE ACT”)
- Slide 1
- DETERMINATION OF DOMINANT POSITION SECTION 78(4) OF THE
COMMUNICATONS ACT, 8 OF 2009 (THE ACT)
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- Information Technology Broadcasting Telecommunications ICT
Industry THE ICT INDUSTRY WORLD WIDE The new converged space.
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- Content Software Network services Professional services Access
networks Terminal & peripheral equipment Network provider &
carrier Information technologyTelecommunications Broad- casting THE
ICT VALLUE CHAIN Are we ICT players or not?
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- New services are generally high growth but low margin. We are
entering a post voice digital era Internet Advertising SMS/MMS and
other Mobile Data PSTN Voice IT Services VoIP Mobile TV Mobile
Voice Mobile B/Band Mobile Music Compound growth / annum 2007 -
2012 EBIT Margin 20%40%60%80%100% 30% 40% 50% 60% B/Band Access 20%
10% Source: Gartner/IBM Mobile Advertising IPTV Online Gaming
Online Music IPTV Advertising
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- LICENSE Telecom in terms of Section 45 of the Act, holds a
technology neutral license to render telecommunication services.
This license is similar to which has been issued to AOL, MTC and
WTN. Therefore: The market definition to be relevant to the new
converged ICT industry. Relevance of class of service?
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- Requirements of Section 78(4) for determination of a licensee
to be dominant class of telecommunications services a)Licensee in
question has such a share of the market in the class of
telecommunications services in question, that it is able to act
independent of its competitors; infrastructure b)The licensee
controls some infrastructure that is necessary for the provision of
the services in question; c)The licensee is dominant as provided in
paragraph (a) and (b) in respect of a class related services class
related services (which need not be telecommunications services)
and the licensee can use that dominance to exercise power in the
market for the telecommunications services; or d)The licensee in
question has a position in a market in another country or a
relationship with providers in another country that can be used to
exercise market power in respect of the relevant class of
telecommunications service in Namibia. Relevance of class of
service?
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- HOW DOES TELECOM NAMIBIA COMPARE WITH THE ABOVE? a)Does not
have a significant share in the market; b)Yes, it does control some
infrastructure that is necessary for the provision of the service
by virtue of history and our previous statutory duty of social
responsibility; c)Telecom is not able to dictate the market due to
insignificant amount of customers and low profit margins. d)Telecom
further does not have a position in a market in another country in
comparison to MTC who:
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- Continue Have a 34% foreign shareholding; Has the back up of a
strong matured player in Portugal Has access to their intellectual
property; and WTN who: Operating in regional markets South Africa,
Zimbabwe, Zambia and Angola. Telecom has equity in Communitel in
RSA, a very small entity and does not have any significant impact
in the RSA market.
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- MARKET SHARE In general a company/firm is considered to be
dominant based on its market share. In this respect CRAN should in
order to determine the dominant position not look at the individual
services provided by the different carriers but look at dominance
as one i.e compare market power of MTC vs Telecom and also compare
financial statements. RevenueEBIDA%Customers
TELECOM1,454,95753.2%1,854,700 MTC1,159,68324.5%213,665
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- COMPARISON TELECOM VS MTC
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- SUMMARY We are now in an era where fixed and mobile networks
have converged and an ICT industry at play. Infrastructure as such
becomes irrelevant. We are also witnessing a service and technology
neutral licensing regime. Infrastructure as such becomes
irrelevant. As a result, Market power becomes blurred and and
therefore Telecom Namibia does not consider itself having market
dominance. Infrastructure alone cannot determine market power.
Class of fixed line infrastructure is not relevant Being
marginalised as an infrastructure provider.
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- CONCLUSION The preferred Approach The Botswana definition
preferred. Dominant position? means a situation in which one or
more enterprises possess such economic strength in a market as to
allow the enterprise or enterprises to adjust prices or output
without effective constraint from competitors or potential
competitors; More in favour of Approach 1 The ICT Regulatory
Toolkit should define all players in the ICT industry. Based on
annual financial statements, market share based on turnover can be
determined easily.