This document provides an overview of interconnection, facilities leasing, and numbering administration in South Africa. It discusses ICASA's mandate to ensure access to communication services. Interconnection is explained as important for both connectivity and competition. ICASA has defined mobile and fixed call termination markets and set cost-based termination rates using a fully allocated cost methodology. The document also outlines upcoming regulatory initiatives such as introducing a new numbering plan and public hearings on local loop unbundling.

1. An overview of interconnection, facilities leasing and numbering administration Pieter Grootes General Manager Markets and Competition Division ICASA 1

2. Contents ICASA’s mandate An overview of interconnection and facilities leasing Numbering Administration Future/upcoming regulatory matters 2

3. Mandate of ICASA Vision: To advance the building of a digital society. Mission: To ensure that all South Africans have access to a wide range of high quality communication services at affordable prices. 3

4. interconnection and facilities leasing Two rationale for interconnection: Connectivity Competition Connectivity is about ensuring that all networks are able to “talk to each other” Interconnection for competition refers to specific regulatory intervention to promote competition in the ICT sector 4

5. INTERCONNECTION FOR CONNECTIVITY Metcalfe’s Law: economic value of a network is thought to increase to the square of its size New entrant network needs interconnection to survive Electronic Communications Act: Any licensee “must, on request, interconnect to any other” licensee (S37.1) Upheld by Interconnection Regulations (GG 33101) Challenges: Potential lack of bargaining power in T’s & C’s 5

6. INTERCONNECTION FOR COMPETITION Objective: to support the new entrant by allowing it to use some of the services and facilities of an established player Interconnection/facilities leasing services to promote competition: Call origination with carrier selection Bitstream access? Local loop unbundling and associated co-location? Satellite earth stations Submarine cables Upheld by Electronic Communications Facilities Leasing Regulations (GG 33252) 6

7. CALL TERMINATION MARKET REVIEW ICASA has defined two markets: Market 1: The market for wholesale voice call termination services to a mobile location on the network of each licensee who offers such a service within the Republic Market 2: The market for wholesale voice call termination services to a fixed location on the network of each licensee who offers such a service within the Republic Pro-competitive remedies Cost-based call termination rates Reference Interconnection Offers

9. Current Cost Accounting

11. SA model is already close to UK LRIC model> 80% reduction ICASA to review rates in 2013/14 Everyone seeks lower input costs BUT: SA needs network investment, especially in rural areas ICASA will review SA’s investment needs before arriving at a pricing decision 9

12. Network roll-out & PASSIVE infrastructure Greenfields network roll-out is costly Sharing of infrastructure is beneficial: Reduces costs of network roll-out Potential wholesale revenue stream Reduces pressure on built environment Reduces time of construction What passive infrastructure can you lease: Masts Space in ducts, manholes etc. Facilities Leasing regulations 10 10

13. Numbering Administration 11

16. Upcoming Regulatory initiatives Introduction of the new numbering plan Online application for numbers Online lodging of interconnection agreements Public hearings on Local Loop Unbundling Provisional dates: 10-14 October Guideline on implementation of interconnection and facilities leasing regulations Mapping of electronic communications networks 14

17. Thank you DankieRe a lebohaRe a lebogaSiyabongaInkomuRo livhuwaEnkosi 15

18. Questions? 16