DGMT COC Recommendations ... - The DG Murray Trust

Presented to: David Harrison, CEO: DG Murray Trust , Date: 12 March 2013
DG Murray Trust
Recommendations
Report
Reducing the Cost of
Communications in South Africa: An
Ecosystem Perspective
Author: Ahmed Kajee

Contents Page
1. Abstract ................................................................................................................................
4
2. Executive Summary ................................................................................................
....................................................... 5
3. Research Background and Results ................................................................................................
8
3.1. Research Drivers ................................................................................................
....................................................... 8
3.2. Research Approach ................................................................................................
9
3.3. Research Context ................................................................................................
......................................................11
3.4. Research Results ................................................................................................
......................................................12
4. Industry Ecosystems ................................................................................................
......................................................13
5. Industry Models Overview ................................................................................................
...............................................15
6. Industry Stakeholders Collaboration ................................................................................................
.....................................16
7. Technology Research Background ................................................................................................
.......................................16
7.1. Current and Future Trends ................................................................................................
............................................16
7.2. Developing Economy Adoption Curve ..............................................................................................
..............................21
7.3. Digital Divide ................................................................................................
.........................................................22
7.4. Painting the picture within South Africa: ................................................................
............................................................24
8. Technical Solution Strategy Overview ................................................................................................
..................................25
9. Technology Matrix................................
................................................................................................
........................................................26
9.1. TECHNOLOGICAL SOLUTIONS ................................................................................................
.....................................27
10. Key Recommendations ................................................................................................
...................................................35
11. Further Work ..............................................................................................................................
..............................36
12. Conclusion ................................................................................................................................
................................39
13. Glossary ................................................................................................................................
...................................41
14. Appendices ................................................................................................................................
................................42
Appendix 1 – Industry Contact List ................................................................................................
..............................................42
Appendix 2 – Stakeholders Interviewed ................................................................................................
..........................................42
Appendix 3 – Research References ................................................................................................
...............................................42
Appendix 4 – External Web References................................
................................................................................................
..........................................43
Author: Ahmed Kajee
12 March 2013

List of Figures
Figure 1: Ecosystem View ................................................................................................
...................................................... 6
Figure 2: Collaboration Activity View ................................................................................................
8
Figure 3: Objectives Concept Map ................................................................................................
9
Figure 4: Research Approach ................................................................................................
10
Figure 5: BoP/RoP Mobile Usage (Worldbank Report: Mobile Usage at the Base of the Pyramid in
South Africa) ................................................................................................................................
11
Figure 6: Results and Recommendations Context ................................................................
12
Figure 7: Research Results Snapshot ................................................................................................
13
Figure 8: Ecosystem Analysis ................................................................................................
14
Figure 9: Expanded Ecosystem analysis ...............................................................................................
15
Figure 10: Operational Ecosystem Model ................................................................
............................................................ 16
Figure 11:Emerging Technologies Hype Cycle 2012 ................................................................
17
Figure 12: Technology Diffusion Curve ...............................................................................................
18
Figure 13:Value innovation versus technology Innovation ................................................................
19
Figure 14: Segmentation of market drivers for reduction in access costs. ............................................ 19
Figure 15:Internet usage in South Africa ..............................................................................................
20
Figure 16: Growth Trends of Data ................................................................................................
21
Figure 17: Mobile Broadband Growth in Africa ................................................................
22
Figure 18: Mobile Social Network status for those who have access ................................................... 23
Figure 19: BoP/RoP Divide ................................................................................................
23
Figure 20: Broadband in South Africa ................................................................................................
24
Figure 21: Broadband Penetration at SA public facilities ................................................................
24
Figure 22: Solutions Cost-Benefit-Effect-Complexity Positioning Model ........................................... 25
Figure 23: Solutions Matrix cluster ................................................................................................
26
Figure 24: High Level Cost Model ................................................................................................
26
Figure 25: NPO Aggregator ISP ................................................................................................
27
Figure 26: Social Service Communications Compliance model ........................................................... 28
Figure 27: NPO WASP Model ................................................................................................
29
Figure 28: Zero Rated/Reverse Billed Mobile APP APN model .......................................................... 30
Figure 29: Informal retail broadband model ................................................................
......................................................... 31
Figure 30: MVNO model ................................................................................................
...................................................... 31
Figure 31: Solar Wireless Router ................................................................................................
32
Figure 32:Wimax Implementation Environment ................................................................
33
Figure 33:Mini Satellite Earth Station model ................................................................
....................................................... 34
Figure 34: Generic Evolving Model Operating Structure ................................................................
34
Figure 35: Key Solutions and Barriers ................................................................................................
36
Figure 36: Open Access MNO ................................................................................................
39
Figure 37: Solutions Roadmap ................................................................................................
40
List of Tables
Table 1: Change Drivers and Restrainer Results ................................................................
7
Table 2: Solution Context ................................................................................................
14
Author: Ahmed Kajee
12 March 2013

1. Abstract
Developing nations globally realise that promoting access to communications, and lowering their
costs, serves as a catalyst for economic growth and social upliftment.
One of the core components required in any healthy Telecommunications industry is Appropriate
Governance that promotes market competition (i.e. Policy, Legislation & Regulation) whilst at the
same time aligning the telecommunications industry to serve national interests and the needs of the
countries citizens. Another important factor is the development of a robust Network Infrastructure
for national, regional, and local connectivity involving things such as; GSM, Microwave, WIMAX and
Satellite Base Stations for OTA i.e. Over the Air communications, Long Distance Fibre for National
Connectivity, Metro Ethernet and Fibre for what is termed “Last Mile” in terms of regional
connectivity. The final leg to a healthy Telecommunications industry involves delivering the
communications services to the end user via effective localised Communications Infrastructure
which uses Technology such as Wi-fi Mesh’s, 3G Broadband Routers, ADSL Routers and GSM
Handsets in order to deliver Voice, Texting, and Rich Multimedia Services such as Video and Audio to
end user devices. Value Added Services such as Mobile Applications, USSD, IVR and Interactive Web
Applications are also delivered and enabled through the Network and Communications
Infrastructure.
There are many conversations and initiatives abound in South Africa related to “Reducing the Cost
of Communications”. . Some of these are “upstream” conversations which revolve around creating a
Policy and Regulatory Environment that Promotes cost reduction through encouraging a more
competitive environment, or the introduction of improved national and international connectivity
such as Cables, Satellite and Fibre Connectivity, and industry specific initiatives such as lowering the
Mobile Operator interconnect rates.
The “downstream” conversations and initiatives revolve around the Development of
Communications Infrastructure such as Wireless Mesh’s or WIMAX Networks within Rural and
Underserviced areas for people classified as “Base of the Pyramid” in order to promote access to
communications, or for the delivery of limited connectivity to small groups of people for a limited
social upliftment purpose such wireless connectivity to select schools s and clinics. There is also a fair
amount of downstream activity happening in delivering and attempting to enable Value Added
Services such as free access to Google, Facebook and Wikipedia on Mobile, specialised competitive
“Tariffing” by the MNO’s such as unlimited on-net net calls and Closed User Groups (CUG) Call plans, and
other services such as educational, career and health related mobile applications, mobile websites,
and mobile data services.
Despite these initiatives, and the fact that the Telecommunications industry in South Africa’s
infrastructure ranks as 13th in the world, the cost of communication in SA ranks as one of the
highest globally. SA ranks 30 th in Africa, Mobile prices are cheaper in over 30 African countries than
they are in South Africa with prices in Kenya, Mauritius, Egypt and Namibia only a fraction of the
price of even the lowest priced services in South Africa. South African prepaid mobile prices are three
times more expensive than in Namibia. (Source: Research ICT Africa - 2012, Policy Brief No. 1, A
Gilwald et al).
Author: Ahmed Kajee
12 March 2013

This report provides recommendations to reduce the cost of communication in South Africa through
an exploration of the various ecosystems involved in the Telecommunications Industry. The report is
based upon market research with various policy, business, research, infrastructure and other
industry stakeholders, and will provide the reader with insights into the various technical, policy,
regulatory, research and commercial interventions that could reduce the costs of communications in
SA.
2. Executive Summary
South Africa’s Telecommunications Industry is made up of plethora of participants, all of which have
a vested interest of a different kind within the industry. There are various contradictions and
tensions within the stakeholder groups, and between stakeholder groups in terms of their interests,
focus areas, and objectives.
According to the “Cost of Communication in SA” Presentation to the Parliamentary Portfolio
Committee on Communications Public Hearing Cape Town, 29 November 2012, the following are the
statistics of the local market;
• Total connections in South Africa, the country has a 138% mobile penetration (operator
supply side information). ion). When looking at individual subscribers, the figure is at 66% of the
population. (GSMA 2012)
• RIA 2011 and Census closer to 85%
• 15% duplicate SIMs (RIA 2011)
• Inhibiting factor for those without services is price
• Price is an inhibiting factor in limiting usage
• 8% of income at national but bottom of pyramid closer to 18%
• Substitution for Mobile;
o 1.0 - Voice fixed to mobile;
o 2.0 - voice to text SMS, Mxit
o 3.0 - Text to data - social networking platforms
The market research conducted has indicated that the current and present technologies,
infrastructure, and industry value chain are more than adequate in order to realise a reduction in the
cost of communications. ns. The proposed interventions discussed herein are realistic and achievable,
and able to deliver measureable socio-economic value. In saying this, it is important to note that
this objective to date has not been achieved as a result of the various contradictory objectives, and
tensions, between industry participants. There are not only tensions within stakeholder interests
and objectives different industry ecosystem, but within stakeholders of the same ecosystem.
It has been found that in order to execute any solution effectively, different Ecosystem participants
need to come together in different capacities. The Ecosystems being referred to can be seen in
Figure 1 below, and some conflicts that exist within them are described further;
Author: Ahmed Kajee
12 March 2013

Consumer
Ecosystem
Industry
Participants
Ecosystem
Solutions for
Reducing the
Cost of
Communications
in SA
Infrastructure
Ecosystem
Technology
and
Innovation
Ecosystem
Regulatory
Ecosystem
Figure 1: Ecosystem View
• Consumer Ecosystem i.e.(Rural, Urban, Bottom/Roof of Pyramid etc)
o Choosing consumers to serve in terms of maximum profitability/social benefit
o Applying limited funding and resources effectively
o Multitude of Social objectives to pursue eg. Education, Health etc
o
Developing VAS Services as Opposed to Network Connectivity Services
o
Enhancing and Developing Access, Improving QOS, and/or Reducing Costs
• Industry Participants Ecosystem (MNO’s, ISP’s, ECNS etc)
o Risk of non-compliance versus cost of Compliance of CSI Objectives
o
Profitability Objectives versus Corporate Social Investment objectives
o
Business Viability, and Commercial Sustainability
o Trade-off between Disruptive and Profitable Technology and Services
o
Market Dynamics i.e. Competition, Product’s, Barriers etc
• Technology and Innovation Ecosystem (eg. WIMAX, Satellite, GSM, 3G, Wi-Fi, LTE, VAS etc)
o
Availability of Handsets, Devices and CPE (Customer Premises Equipment)
o
Usage of Licensed versus Unlicensed Spectrum
o
Investment in Current or Future Technologies
o
Range and Penetration of Technologies
o
Logistics, Distribution and Management of Networks/Systems and VAS
• Regulatory Ecosystem (ICASA, DTI, DOC, Government and Political)
o
Cost of funding for Market Reviews in order to support change initiatives
o
Compliance Monitoring and Evaluation Skills, Knowledge and Resources
o
Social Upliftment Obligations versus Trade Stimulation Objectives
o
Governmental and Political Influences in licensing allocation
o
Social Delivery Mandate Interpretation and implementation
Author: Ahmed Kajee
12 March 2013

• Infrastructure Ecosystem
o
Integration into existing network versus setting up infrastructure
o
Cost/Benefit of Infrastructure Investment and Syndication of players
o
Complexity and Feasibility of Last mile Implementation
o
Open/Closed Access Network Licensing and regulation
o
Long term Network Maintenance and Sustainability
Our research - after having analysed the various ecosystems through stakeholder interviews, and
high level industry analysis, and market review and research, has identified an overall set of drivers
and restrainers of reducing the cost of communication in SA. After using a constant comparison
method, key drivers and restrainers were identified as listed in the following table;
Table 1: Change Drivers and Restrainer Results
Drivers and Restrainers
ICASA interventions
DOC Policy
Industry Player Willingness
Infrastructure
Technology
Market Dynamics
Funds
Over The Top Services
Coordination and leadership
Industry Knowledge and Skills
Research & Information availability
Product Development, Marketing & Distribution
Key Drivers
Co-Ordination and Leadership
Funds
Research & Information availability
Technology
Industry Knowledge and Skills
Infrastructure
Key Restrainers
Funds
Research & Information availability
Industry Knowledge and Skills
As mentioned previously, the technology and infrastructure exists in order to reduce the costs of
communications in SA. The research has indicated that irrespective of whichever Technology idea or
intervention is pursued, a common platform that has the funds - and knowledge and skills, to
explore, analyse and pursue infrastructure, technology and commercial projects, and which can
provide government and regulatory authorities with the relevant information, insights and reports
to craft policy and deliver impactful regulations, will be in a position to successfully address the
restrainers that are holding back progress.
The research has also thus far established that within the “concerned parties” community of the
Telecommunication industry involving various PBO’s and NPO’s, there is a high level of awareness
and interest in reducing the cost of communication in SA – albeit they hold different views about
how to go about achieving it. A Plethora of initiatives exist ranging from Technological, Regulatory
and Infrastructure, to the delivery of Social Services via Mobile, Satellite and TV Whitespace. This
community displays characteristics of a fragmented front, and our research has also uncovered a
need for strong leadership and co-ordination within the “concerned parties” community.
Author: Ahmed Kajee
12 March 2013

Whilst similarly concerned parties sometimes work at cross purposes, each one holds different skills
sets and knowledge resources, which if pooled and co-ordinated ordinated could represent a powerful
platform that could give real effect to change, resulting in measures that reduce the cost of
communication in SA.
In order to address this fragmentation, a key and very powerful intervention would be to create a
common platform for the parties to share resources, knowledge, expertise and skills as shown in the
diagram below;
Figure 2: Collaboration Activity View
This report will therefore go on further to explain the various Industry, Technological and Regulatory
solutions and interventions within the context of a collaborative environment.
3. Research Background and Results
3.1. Research Drivers
In South Africa, approximately 50% of the population live below the poverty line (+-R432 pm) with
limited or no access to health, education and social services. Many of these people live in
communities far removed from the opportunities that South Africa offers. To most of them, these
opportunities are out of their grasp. We have come a long way since our 1994 Democracy, and
whilst living conditions may have improved for a great number of people, there are masses of people
who do not enjoy the benefits of this democracy. Whilst each person holds a democratic right to
vote, and can theoretically enjoy equal rights as enshrined within our most progressive constitution,
they are not at liberty to exercise these rights due to huge imbalances of a monumental scale that
impedes their ability to improve their living conditions, and their lives in general.
Author: Ahmed Kajee
12 March 2013

Central to improving this is access to these opportunities through education, job opportunities,
health services, social services, and social support. One such impediment to social upliftment is the
cost of communication in South Africa.
The World Bank has found that in low- and middle-income income countries every 10 percentage point
increase in broadband penetration accelerates economic growth by 1.38 percentage points—more
than in high-income income countries and more than for other telecommunications services (figure 1.1). In a
similar study, McKinsey & Company estimates that “a 10 percent increase in broadband’s household
penetration delivers a boost to a country’s GDP that ranges from 0.1 percent to 1.4 percent”
(Buttkereit and others 2009, 4). Booz & Company.
Figure 3: Objectives Concept Map
3.2. Research Approach
Mobile Communication and Technologies were chosen as the focal point of this research due to
their ubiquitous nature. Mobile Communications, Platforms, and Services are key means of
delivering social services and creating and improving access to opportunities for those who feel most
marginalised in South Africa i.e. “Base of the Pyramid”. The solutions focused on in this report will
target this segment of the market because this is where maximum social benefit can be derived
through reduction in the cost of communications.
“More than 75 percent of those 15 years or older in the BoP own a mobile phone, a rate only 14
percent lower than ownership at the RoP. Of those who own a mobile phone, 98.5 percent have a
prepaid SIM card.” (Worldbank Report: Mobile Usage at the Base of the Pyramid in South Africa)
Author: Ahmed Kajee
12 March 2013

Key areas of upliftment that is possible via mobile include, health, water & sanitation, education and
the ability of non skilled workers to up-skill, train and earn income.
Mobile mediums also have the ability and potential to deliver the much needed social value that
they are ideally positioned for. This is not occurring despite :
• the highest levels of subscriber penetration amongst all communication mediums
• the ability to cross deep divides between geographic and living standard chasms
• offering a multitude of services and communication possibilities;
all of which can be used as a springboards for social development in a manner that uplifts
communities and people through various initiatives such education, health and employment.
Because of the dynamic nature of the industry and the limited duration within which the research
project was conducted, a constant comparison approach was chosen to ensure maximum relevancy .
Constant Comparison Research Approach
Stakeholder
Interviews,
Market Data
Gathering
• Technology
• Investment
• Willingness
• Regulation
• Commercial
Market & Literature
Review
Market Analysis
Testing Theories,
Evaluating Restrainers, and
Formulating
Recommendations
Figure 4: Research Approach
Author: Ahmed Kajee
12 March 2013

3.3. Research Context
In South Africa presently, there is a plethora of mobile value added services initiatives and platforms
aimed at social upliftment in various forms. These services range from :
• Mobile Websites (Mobisite) that rely on Mobile Data such as 3G and GPRS,
• Mobile Originating (MO) Shortcode SMS Services,
• Mobile Terminating (MT) Bulk SMS Services,
• Mobile Voice Services, and
• Services such as USSD (Unstructured Supplementary Service Data) –
all collectively known as “Bearers” because they bear different types of data. The level of uptake,
impact of usage, and ultimately the success of these mobile driven social development services to
achieve their social objectives lies in the cost charged by mobile operators to access the Bearers that
these initiatives and platforms rely on. Coupled with the bearers the value added content needs to
be attractive and beneficial. Most services in place, provide for a single one way communication.
Figure 5: BoP/RoP Mobile Usage (Worldbank Report: Mobile Usage at the Base of the Pyramid in South Africa)
Figure 5 above shows usage of mobile in SA, it is interesting to note that despite there been a wide
range of social services accessible via mobile, it becomes clear that although Mobile is an ideal and
effective medium to reach out to and develop underprivileged people of South Africa, its effective
usage for Social Development purposes is impeded by Bearer costs that are too high for those most
in need of accessing the desired services.
Author: Ahmed Kajee
12 March 2013

Central to these high costs are the Mobile Network Operators (MNOs) in South Africa’s pursuit for
consistently higher profits and returns. Whilst the MNOs are readily prepared to reduce the costs of
access to mobile services such as costs of SIM Cards and Mobile Handsets in order to drive the
growth of their market share and services penetration, they are not amenable to reducing the costs
of the actual Bearer services used for communication by the users themselves – unless they are able
to make a higher profit by doing so.
3.4. Research Results
The research results are aligned to the recommendations in terms of possible options to reduce the
cost of communications in SA. There are various ecosystem contexts from which to view the
recommendations, these are explained further. The main contexts this report and its
recommendations deals with are;
a) Technology Context
b) Regulatory Context, and
c) Industry Context
Figure 6: Results and Recommendations Context
Author: Ahmed Kajee
12 March 2013

What follows is a high level view of the various recommendations which will be detailed later on in
this document;
Industry
- Non Profit/Advertising Driven MVNO/MVNE
-Non Profit GSM MNO
-Non Profit WASP
-Reverse Billed Mobile Application
-Bundle Carry Over Minutes/Texts Donation Service
-Community Connectivity Solution eg. Satellite, 3G
Regulatory
ICASA
- Regulation for NPO Services Costs
- ECNS License Application
- NPO Interconnect Rate Regulation
-Consumer Protection Regulation
-Open Access Network Regulation
DOC
- Social Services GSM Spectrum
- Open Access Network Policy Directive
-Monitoring and Compliance Directive
Technology
Wi-Fi Community Mesh
Fibre/Microwave Backhaul
Free Social Service Apps
Social Services Register
MVNO/MVNE/MNO
Consumer VAS Solutions
Research Results Snapshot
Figure 7: Research Results Snapshot
Figure 7 shows various solutions that were explored within the different contexts, this will be
detailed further in this report.
4. Industry Ecosystems
Within the Telecommunications industry, there appears to be 5 distinct ecosystems which drive or
restrain change – none of which do so in isolation of the other. In order for true disruption to occur,
a collaboration of various ecosystems are required.
The 5 Industry Ecosystems are;
- Technology and Innovation
- Regulatory
- Infrastructure
- Industry Players
- Customer
Author: Ahmed Kajee
12 March 2013

Figure 8: Ecosystem Analysis
The diagram above displays the key players within the ecosystems, and the level of overlap between
them that is required in order to deliver a solution;
Table 2: Solution Context
Solution Domain
Industry Solutions
Access/Infrastructure Solutions
Regulatory Solutions
Impacting Ecosystems
Consumer, Technology and Innovation, and Industry Player
Infrastructure Ecosystem
Regulatory Ecosystem
It is important to note that different solutions proposed herein is driven from, resides within,
disrupts, supports, or collaborates with various ecosystem participants in order to be executed
successfully. A dynamic capabilities approach needs to be taken by any organisation wishing to
pursue any of the solutions recommended herein.
Author: Ahmed Kajee
12 March 2013

5. Industry Models Overview
In terms of the various industry ecosystems, the following operating models exist;
• MNO – Mobile Network Operator eg. MTN, Vodacom, Cell C, 8ta
• MVNO/E – Mobile Virtual Network Operator/Enabler eg. Virgin Mobile, Hello World etc
• ECNS – Electronic Communication Network Supplier eg. MWEB, Vox, DiData etc
• WASP/WDP – Wireless Application Service Provider/Data Provider eg. Integrat, AAT etc
• VAS – Value Added Service eg. MXIT, Cell –Life etc
A combination of these models can give effect to reducing the cost of communications in SA. They
however require elements from different ecosystems to a different extent in order to enable the
solutions proposed herein.
Figure 8 below shows 5 Core elements affecting the cost of communications on the outer rim, with a
further 12 elements that drive and or restrain cost reduction initiatives. It aims to display that any
solution to reduce cost is driven and/or restrained by one or more of the 12 areas within the inner
rim, which could be further driven and/or restrained further by the 5 core Ecosystems within the
outer rim.
Figure 9: Expanded Ecosystem analysis
An appreciation for this dynamic, and forward planning for the associated complexities could make
new initiatives, and many of the present initiatives a lot more successful in reducing the cost of
communications.
Author: Ahmed Kajee
12 March 2013

6. Industry Stakeholders Collaboration
Due to the high level of complexity involved in reducing the cost of communication in SA, and
despite there being very feasible technology solutions, and effective fective intervention strategies, the
cost reductions have not happened. It is clear that for any solution to work, there needs to be a
collaborative operating model in place that can deal with the complexity that the challenge
presents.
Figure 11 below depicts an ideal operationally collaborative model that deals with this
complexity;
Figure 10: Operational Ecosystem Model
7. Technology Research Background
7.1. Current and Future Trends
Mobile operators started gaining their revenue from voice taffic. Thereafter interconnect
and roaming voice traffic became new key revenue generators. Historically, mobile
operators have been using the Value Added Services (VAS) channel to increase their access
into the market and thus creating additional revenue streams. The complacency with high
revenues and high EBITDA targets from the shareholders forced operators to hold onto their
rates, and aim for consistently higher margins.
Author: Ahmed Kajee
12 March 2013

Subsequently once GPRS and data was introduced, the opportunity for new applications and
alternate and low cost voice mediums (VOIP) surfaced. This posed and still poses a threat to
operators, however a non-adoption of data technologies meant a dwindling subscriber base.
In trying to grow data streams, a compromise needed to be reached and hence the
introduction of WASPS to help facilitate the growth. Data caught on fast and the build of
applications upon this layer was an inflection ion point for driving new technology trends.
Within the operator old technologies are still key and rates will only drop when there is a
drastic drop in revenue from the particular bearer. Hence as long as there is a need and
purpose, tariffs and rates will take a longer time to be reduced. Thus there has to always be
a driver, either a new regulation, a disruptive technology or some key factor that will force a
change in lower costs of communications.
The current and future technology trends as depicited by the Gartner Hype Cycle is a
reflection of the ability of technology to evolve but not necessarily drive the cost of access to
data and information to be reduced.
Figure 11:Emerging Technologies Hype Cycle 2012
From a subscriber’s perspective, a subscriber would ideally like to have everything for free.
To understand this thought, one can compare accessing information via a radio. All that a
subscriber does is buy radio. By tuning his radio he can access news, music, various audio
content, jokes etc. He does not pay a subscription or a fee or is bound by any contract.
Author: Ahmed Kajee
12 March 2013

It does not matter what new radio he buys, he can still access the same content for free –
the only difference being is if he has state of the art radio he can record music and radio
shows for later playback. The question then arises, why can’t the same model be applied to
accessing the internet The answer to this is business profit. As long as there is a business
profit margin required year-on-year, year, access to data cannot be made free.
There are three basic models in VAS:
1) An old model which uses, SMS, voicemail, IVR and USSD etc
2) A new model that bases the access to application, content & information via
GPRS/EDGE/3G/LTE etc
3) A blended d model that extracts basic model services and combines them with services
and applications from the new model.
The continuous reviewing of these models, and associated technologies then become the
guide as the next inflexion point for technology changes. This repetive e behaviour is reflected
in the diffusion curve shown in Figure 2.
Figure 12: Technology Diffusion Curve
Innovation is defined as being the development of of new values that meet new
requirements, or meeting old customer market needs in value adding ways. Expressed
differently, the process of translating an idea or invention into a good or service that creates
value, or for which customers will pay, is considered innovative.
When doing a comparison between value innovation versus technology innovation, one sees
that without innovation, the value of a product is incremental. Hence costs needs to be
lowered and innovation increased to enable Value Creation. This ensuing rollout is a “Blue
Ocean Strategy.”
Author: Ahmed Kajee
12 March 2013

Figure 13:Value innovation versus technology Innovation
The sequencing undertaken by the team to outline the models, incorporated using the Blue
Ocean Strategy. This approach helped develop and create the various ideas adopted in this
proposal.
The models selected are based on the various budget tiers. These models have been rated
according to the impact it will have on the objective of reducing the cost of communications
in SA. Costs are roughly estimated so as to provide a platform from which to upscale. The
architectures and plans are devised from existing products in the market and does not cater
for the evolution of technology due to uncertainty and short durations that these
technologies are in existence.
Based on the global current and future trends, the areas identified as points of leverage for
lowering the cost of communications are shown in Figure 15. With the subscriber uptake
playing an influential role in the cost reduction:
POLICY & REGULATION
CUSTOMER
Regulator
Fixed
and/or
Mobile
BROADBAND
VOICE
Mobile
Fixed
Wireless
Mobile
Fixed
Figure 14: Segmentation of market drivers for reduction in access costs.
Author: Ahmed Kajee
12 March 2013

According to the UMTS forum, the major trends and drivers that will shape the world of
until 2020 are perceived as:
• Mobile voice was overtaken by mobile data at the end of 2009. Data was the
number one service category at the beginning of 2010 in terms of traffic generated
on mobile networks. Mobile voice traffic growth is expected to remain limited
compared to the explosive growth in data traffic until 2020.
• Currently mobile data traffic drastically reaches very high figures for mobile
broadband subscribers. In November 2010, one Scandinavian operator indicated
that the average 3G smart phone user consumed 375 MB/month of data. The
average 3G broadband user consumed 5 GB/month, largely through HSPA-data
cards. But the average LTE consumer (all data cards) used 14 GB – 15 GB/month of
data. In the USA, one operator announced an average of 7 GB per month of data for
a base of 2 million subscribers in July 2010.
• Growing number of mobile devices such as tablets, dongles, smartphones and
connected devices are being used.
• The LTE ecosystem is developing rapidly as LTE took off in 2010 in Scandanavian and
Europena countries whilst LTE-Advanced is planned for 2015 according to time and
to market expectations.
• In 2010, the machine-to-machine (M2M) market already represented 53 million
modules. M2M will continue to grow significantly. However in the future, the main
contribution for mobile traffic will come from other devices.
• Small cells and Femtocells are becoming the solutions of choice for increasing
network capacity.
• Social networking has become very important for mobile users and now represents
new consumption patterns and generates significant traffic.
• Video has become increasingly important and is the No.1 source of data traffic. TV
content provision by Internet also generates data traffic on mobile networks
Within the South African context, the usage of internet in South Africa is low and by
leveraging of the various segments identified and making use of the established models as
per segment division, the cost of communications will be reduced.
According to statistics from the Internet World Statistics forum, South Africa has a very low
internet penetration rate of 17.4%
Figure 15:Internet usage in South Africa
Author: Ahmed Kajee
12 March 2013

7.2. Developing Economy Adoption Curve
Data is king. As much as this is a cliché, at any point if data is introduced into a network, there will
be an increase in revenue. This is substantiated by research done in Europe. Figure 15 shows a
typical data day in Europe.
Figure 16: Growth Trends of Data
Hence adopting a suitable model and providing data at different leverage points will systematically
guide and grow the adoption curve of technology. Influencing factors such as the uptake in similar
markets abroad will play a vital role in the growth. Hence on one end of the scale we have a growth
in technology and a simulated market need, on the other hand the basic requirements to access this
currently and in the short term future is not in place within the South African context.
Further to this, trying to replicate models that have functioned well in Europe may and probably
could fail in South Africa. The team is of the opinion that the models selected that can help the
evolution of technology must and will be based on a local need of the target segment. The marketing
and advertising leverage points should be kept further away from the subscriber so that the costs
are lowered and the subscriber is not afraid or deterred from exploring within the new cost
paradigms set by the interventions in South Africa.
Author: Ahmed Kajee
12 March 2013

7.3. Digital Divide
A digital divide is an economic inequality between groups in terms of access to, use of or
knowledge of ICT. Overcoming the digital divide requires that an individual must be able to
connect in order to achieve enhancement of social and cultural capital as well as achieve
mass economic gains in productivity.
Looking into the current status of Africa, which a population of about 1.2 billion there are
only 60 million broadband connections reflecting and approximate 5% penetration rate. This
however is counteracted by an 80% annual growth
Figure 17: Mobile Broadband Growth in Africa
Author: Ahmed Kajee
12 March 2013

Within South Africa, the mobile social networking environment is also growing, however for
a population of 50 million, very few have a social networking status. This is mainly
contributed to the access costs and the availability of affordable Smartphones as shown in
Figure 17.
Figure 18: Mobile Social Network status for those who have access
A Key components of this Divide is shown in the different between the BoP, and RoP per
figure 19 below. Some noteworthy points are the difference in Postpaid, Internet
Capabilities and Handset Charging venues;
Figure 19: BoP/RoP Divide
Author: Ahmed Kajee
12 March 2013

7.4. Painting the picture within South Africa:
As of March 2012, there were around 3.5 million broadband connections in South Africa,
with around 850,000 of these being ADSL (26%), over 2.5 million being 3G/HSPA (69%). 93%
of households had mobile phones in 2011, but only 15% had fixed lines, and 10% had
broadband internet access.
Figure 20: Broadband in South Africa
Most public facilities are connected to the Internet. Still more than one-quarter of schools
do not have broadband coverage.
Figure 21: Broadband Penetration at SA public facilities
Author: Ahmed Kajee
12 March 2013

8. Technical Solution Strategy Overview
Guided by the strategy, there is an array of models that will help facilitate the reduction in costs of
data transfer. Some models overlap and a blend of a few models could further catapult a change in
the industry.
It stands to reason that regulatory approval is imperative for crucial solutions where ICASA
intervention is required. This could be a delaying factor pending on the lobbying and regulatory
target dates. Where satellite, MVNO or MNO model is selected, licence costs for spectrum usage will
be dictated by ICASA unless there can be government intervention considering that the project is
primarily geared for NPOs.
Each model has the innate ability to generate revenue. However the question that is raised is at
what point does revenue become an influencing factor considering that the sponsor is seeking to
reduce costs.
Every model caters for the end consumer, and with zero-rated rated applications and models in mind, the
poorest man, woman or child with a mobile phone will have the ability to access the internet. Figure
22 displays a high level view of all the solutions explored within the following criteria;
• Cost of Implementation
• Effect on Reducing the Cost of Communication
• Ease of Implementation
• Technology Readiness
Figure 22: Solutions Cost-Benefit-Effect-Complexity Positioning Model
Author: Ahmed Kajee
12 March 2013

9. Technology Matrix
Figure 23: Solutions Matrix cluster
Each project has been categorised within a context of Technology, Cost, Effect and Feasibility as
shown in Figure 23 and 24.
Figure 24: High Level Cost Model
Author: Ahmed Kajee
12 March 2013

9.1. TECHNOLOGICAL SOLUTIONS
9.1.1. WAPA (Aggregator ISP)
The approach in this model is for a new entity to be established similar to WAPA (Wireless
Access Application Providers) but aligned to them. WAPA is a body that collectively represents
wireless operators in South Africa. The goal of an aggregator ISP will be to ensure that all
network bound traffic is directed via the newly formed body. This eliminates the need for the
NPOs to pay or incur high costs when connecting through an existing service provider.
Current
Proposed
NPO 1
NPO 2
NPO 2
NPO n
NPO pays a
fee
Wireless
Access
Provider
NPO n
NPO 1
MNO
NO
fee
Aggregator ISP
Provider pays a
fee to MNO but
@ discounted
rate
MNO
Negotiated or
zero-rated
MNO
Figure 25: NPO Aggregator ISP
Through the hosting of all ISP Data Services, the NPO Aggregator could negotiate through a
consolidated front for ZERO rated data services. Also, this organisation could reach economies
of scale that puts it in a strong bargaining position with industry players where the cost of
hosting, data and other services are involved.
Author: Ahmed Kajee
12 March 2013

9.1.2. Social Service Communications Compliance (SSCC)
This in essence is a newly formed industry recognized body that overlooks all activity
pertaining to NPOs, social and economic upliftment via the use of mobile telephony and
projects overseeing the drive to reduce the costs of telecommunications. This administrative
body would require a complete database infrastructure mostly controlling document
management. It will incorporate a web portal for registration and access to information.
Figure 26: Social Service Communications Compliance model
This body would require the collaboration of all NPO’s, and will need to be function as a public
benefit organisation that is sanctioned by ICASA, the Department of Communications, and the
National Government. Its main purpose will be Stakeholder Co-Ordination, Public Advocacy,
Industry and Government Lobbying, Compliance Monitoring, Strategic Support to Public
Organisations, and the Commissioning and Delivery of Research Reports and Information to
the Decision Making authorities.
Author: Ahmed Kajee
12 March 2013

9.1.3. NPO WASP (Wireless Application Service provider)
In this model the tendency is to lean towards forming a new and independent WASP,
supported by the DGMT, with the goal of only dealing with NPOs
NPO
NPO 2
NPO n
NPO 1
MNO 2
NO fee
WASP
Negotiated or
zero-rated
MNO 1
Etc…
Figure 27: NPO WASP Model
The newly formed WASP then has complete management and control of all NPOs seeking
assistance. The benefits will be;
• Zero Rated USSD Tariff’s
• Zero Rated SMS MO
• 100% Revenue Share
• Zero Rated IVR Lines
• Zero Rated NPO Mobile and Website Traffic
This model requires regulatory approval in the form of an ICASA intervention to Oblige the
Mobile Network Operators to Zero Rate all Social Services pertaining to bona-fide Non-Profit
Organisations and will need to be justified to the MNO’s on the basis of their “License to
Operate” CSI Mandate.
Author: Ahmed Kajee
12 March 2013

9.1.4. Access Point Node/Name Application (APN APP)
APNs deployed via the packet infrastructure on a mobile network eg. GPRS, Edge, 3G, HSDPA
& HSUPA are widely used in various business. They have a vast range of applications enabling
mobile users and various others. From cost benefits to ease of deployment, APNs provide a
fast alternative in the arena of Wide-area networking.
The APN service can either function with standard contract SIMs or via a cheaper data bundle
deployed across multiple SIMs and multiple remote sites.
The rationale behind the APN APP is to first work with the networks to load the APN on their
environment so that any subscriber who has the APN loaded on their profile will have access
to a specific environment – more specifically an application that enables them to chat, access
the internet and communicate in general. This APN is then either zero-rated rated or sponsored thus
providing the accessibility to subscribers who cannot afford basic access.
APPLICATION
WASP or ISP
Liv
e
NETWORKI
NG CLOUD
FIREWALL
&
GATEWAYS
MNO
APN on subs
profile
Normal
subscriber
Figure 28: Zero Rated/Reverse Billed Mobile APP APN model
9.1.5. NPO Data – reverse billing
The main focus of this model is use an existing ISP or create a new service provider or third
party whereby reverse billing is applied to all transactions and traffic related to NPOs. A
register will be kept by the ISP or third party and will manage all associated mobile
applications and sites. The third party will be responsible for coordinating with the various
MNOs. The ISP will be dedicated to NPOs and the DGMT will finance the ISP as well as
negotiated or zero-rated rated traffic rates provided by either a single MNO or all MNOs.
Author: Ahmed Kajee
12 March 2013

9.1.6. Informal retail broadband environment
The model deals with broadband being available at spaza- shops where cards are sold to
customers and connectivity then enabled for the customers. The spaza-shops shops become Wifi
hotspots and provide the beacon of connectivity for the surrounding area.
Figure 29: Informal retail broadband model
This solution has multiple objectives and the potential to stimulate entrepreneurship, whilst at
the same time, reducing the cost of communications.
It is envisaged that technology devices would need to be installed, with POS i.e. Point of Sale,
and LAN i.e. Local Area Networks in the form of “Wireless Mesh’s” in order to enable the
solution. A critical success factor here would be getting a cost effective “last mile” partner either
providing fibre, satellite or 3G connectivity.
9.1.7. MVNO
The mobile virtual network operator has a roaming agreement with an existing operator.
Depending on the nature of the MVNO, different products and varying services can be
offered.
Figure 30: MVNO model
Author: Ahmed Kajee
12 March 2013

A entity can be setup to develop wholesale arrangements with the Network Operators eg. Virgin
Mobile, Redbull Mobile, and “Piggy Back” of one of the existing networks infrastructure for
Data, SMS, MMS, USSD etc.
a. As a not for profit entity, a strong brand can be created linked to social upliftment
i. This positioning will support subscriber growth i.e. giving back whilst you
speak
b. An infrastructure will need to be in place for billing, customer service etc
c. The MVNO can Develop/Brand Simcards and airtime etc
d. Margins can be low and advertising revenue stimulated
e. Public Sector and Social Responsible firms can be canvassed for contrac
This option has huge potential to be disruptive and extremely effective, however, the costs are very
high and the venture risky. If interconnect rates come down further, even just for NPO’s, this model
will prove to be an ideal option.
9.1.8. SOLAR ROUTER DEVICE
The device will contain a SIM card enabled with data and a battery that will be charged via a
solar panel. It will enable the user to also charge his handset, power four light emmitting
diode (LED) lights and act as a WiFi unit for the customer to
solution should be enabled to only work via the mobile operators thus creating an additional
revenue stream whilst forcing a reduction in the costs of data by being partially subsidised to
the customer.

9.1.9. MVNE
The MVNE model is similar to the MVNO but without the Sales and marketing functions. As an
MVNE, the entity can sign up retail partners as MVNO’s eg. Spar, Shoprite etc.
Thus sales, marketing and the branding is carried by the Partner. The role that the MVNE will
play is being able to reach the untapped and lower end markets which the operators can release
themselves from managing them. The focus of the MVNE is the back-end enablement whilst
concurrently not interacting with the end user customers.A representation of the MVNE is
shown in the figure below :
Figure 30: MVNE Model
9.1.10. WIMAX
The model is to build an entire Wimax network by providing or leasing the necessary
infrastructure. An ECNS licence wil need to be acquired from ICASA and the necessary CPEs
subsidised into the market to enable a steady network rollout.
Figure 32:Wimax Implementation Environment
Author: Ahmed Kajee
12 March 2013

9.1.11. Mini- Earth Stations
Here the proposal is to gain access to a satellite service provider and negotiate reduced costs
in exchange for lower bandwidth and grade of service.
Infrastructure that will be needed will be the mini earth stations at the home similar to
satellite receivers and the corresponding satellite dishes.
Figure 33:Mini Satellite Earth Station model
Within each model a vary team is required – however the structure to grow the organisation and
evolve as the models mature will require a dedicate team as shown in Figure 34.
CEO
ASSISTANT
CFO
COO
CSO & CBDO
CTO
CMO
Account and
Invoices
Support Manager
Account Manager
Web developer
Brand specialist
Account and
Invoices
Specialist Support
Account Manager
Database specialist
Marketing specialist
Specialist Support
Account Manager
Lead developer
Specialist Support
Junior developer
Specialist Support
BI Specialist
Figure 34: Generic Evolving Model Operating Structure
Author: Ahmed Kajee
12 March 2013

10. Key Recommendations
The solutions proposed cannot work in isolation and require many other factors in order to
successfully reduce the cost of communications, below figure 33 describes the recommended
regulatory interventions, and technology and industry solutions that the DGMT should pursue;
Recommendations Matrix
Industry Solutions
MVNO/E
Technology Solutions
Open Access MNO
(GSM/WIMAX etc)
Reverse Billed Mobile
Social Networking &
Services Application
Regulatory Interventions
NPO WASP
Informal Retail
Broadband Solution
NPO Data
Service
Regulation
Open
Access GSM
Network
License
ECN NPO
License
NPO
Termination
Rate Policy
Consumer
Bundle
Donation
Policy
Recommendations Matrix
The recommended regulatory inventions are high leverage points and should be pursued
concurrently with short term technology and industry solutions being the OTT Mobile
Application Service, and the NPO WASP Service.
Medium term solutions that have merit and should be explored further are the MVNO,
MVNE, and Informal Retail Broadband Environments.
The longer term solution that is a definitive game changer, and extremely disruptive is a
hybrid Open Access MNO using a blend of GSM, WIMAX, Satellite and Fibre technologies for
connectivity and backhaul connectivity. This longer term solution requires policy directive,
spectrum allocation, infrastructure and collaboration amongst and between all ecosystems
and will hence take a long time to implement.
Author: Ahmed Kajee
12 March 2013

11. Further Work
The diagram below describes the regulatory and other barriers in order to implement the
key recommended solutions, these are explained in further detail below;
Figure 35: Key Solutions and Barriers
Regulation
The regulatory interventions are an extremely important area, and irrespective of whether
any industry or technology solutions are pursued, it is imperative that further work be done
in this arena. ICASA, DOC and DTI should be lobbied further in order to develop a level of
awareness around the interventions and their impact.
A barrier to applying relevant regulation is the lack of ICASA funding in order to conduct
market reviews so that representations can be made in parliament. According to ICASA, each
market review costs +- ZAR 5 million. The following market reviews would be beneficial to
conduct in collaboration oration with ICASA;
Author: Ahmed Kajee
12 March 2013

• Impact Measurement/Assessment of Social Service Register Regulation on
Education, Domestic Abuse, HIV, Crime etc
• Mobile Bundle Trends i.e. Usage, Carried Over & Lost Minutes/SMS’s/Data
• Model for GSM Spectrum License Allocation for Social Services
Technology Solution
a) Reverse Billed Mobile Application
Further research into the design, costs and feasibility of developing a Free Reverse Billed
Mobile Application should be undertaken. This should be able to provide the following
information;
• Functional Specification of Service
• Design and Content Management
• Development, Management and Ongoing Maintenance and Data Costs
• Rollout, Marketing and Uptake
• Revenue Generation Possibilities and Forecasts
b) Information Retail Broadband Solution
Although this solution is a bit of a mid-term one because it is highly infrastructure driven,
further work in this regard should be done with infrastructure players in order to develop
feasible models that will reducing the cost of communications whilst at the same time
generating income for owners of informal retail stores i.e. Spaza shops. Further work here
involves;
• Researching Costs, Budgets and Feasibility
• Designing a Commercial Business Model
• Researching and Developing Appropriate Equipment
• Identifying Possible Sites, Technologies and Rollout Plans
• Negotiating Costs of Backhaul Services
• Designing Operating Model and Data Subsidies and Prices
Industry Solution
a) NPO WASP
The business case and feasibility for the setting up of an NPO WASP should be researched
further. This solution although powerful, requires either industry MNO player willingness,
and/or regulatory intervention by ICASA in terms of the Social Service Compliance Model
suggested herein. Further work in this regard would be to;
• Lobby ICASA Further and Assess Time and Costs of Intervention
• Support the Process through Research and Stakeholder Management
• Design Operating Model and Strategy
• Device Budgets and Management Plans
Author: Ahmed Kajee
12 March 2013

) MVNO/MVNE
The MVNO/MVNE Models eg. Virgin Mobile is a mid-term model as they are highly complex
in that they are challenging to make sustainable – even more so as a low cost/cheap/free
carrier. The cost of setup, subscriber management, and ongoing business management and
support is extremely high. This model is a highly commercial one that requires careful
business planning and consideration, and high level negotiations and support from an
incumbent MNO which we have obtained. Further work here will involve;
• Commercial Contracts/Options and Case Study Reviews
• Value Added Service, Tarriffing, Product Design and Revenue Forecasting
• Advertising and Revenue Generating Business Development
• Integrated Marketing Strategy Development
• Subscriber Planning and Cost Subsiding
• Channel Distribution, Supply Chain and Logistic
• Financial Planning and Modelling
• Partnerships and Stakeholder Relationship Development
• Business Operations and Management Design
• Technical Planning and Implementation Roadmap Development
• Funding and Sustainability Planning
c) Open Access MNO
This option has been earmarked as a long term solution as it requires an ECNS license in
terms of the communication network it will need to implement, as well as a GSM Spectrum
license if it is to use the GSM Frequency. Essentially, this model has 3 types of complexity i.e.
1) Customer Connectivity Mechanisms to Network eg. Wi-fi/GSM etc, 2) Network
Connectivity to Exchange/Presence i.e. Last Mile eg. Microwave, Wimax etc, and 3) Backhaul
Connectivity to WWW i.e. Satellite, Fibre, DSL etc.
Author: Ahmed Kajee
12 March 2013

Figure 36: Open Access MNO
It is very possible to setup an MNO, however, getting these 3 components in sync is a real
challenge. Further work here should involve;
• Lobby DOC and ICASA for GSM License
• Investigate Application for ECNS License
• Explore Interim Backhaul Pilot using WIMAX/Satellite Technologies
Once these 2 licensing areas are addressed, further work can be done here in terms of
business planning.
12. Conclusion
The Telecommunications industry is currently geared for change and there is ample activity
aimed at reducing the cost of communication in SA. There is a general feeling that the MNO’s
and other commercial stakeholders are too “powerful”, and that they are collectively able to
block any initiatives or technologies that disrupt their business models through their strategic
positioning, commercial means, and Beaurocracy. The industry sentiment is also that ICASA is
not as committed, resourced, skilled and/or well funded enough to effectively drive meaningful
change in cost reduction, and that there are influential forces within national government that
work at cross-purposes with interested parties willing to effect change.
Author: Ahmed Kajee
12 March 2013

Whilst there is merit in many of these feelings and sentiments, research has shown some
evidence to the contrary where opportunities exist to effect change. More work is required to
explore these in order to evaluate various options and possibilities.
It was also found that a single solution to reducing the cost of communication does not stand
out since from an Ecosystem Perspective it may only affect a small group of consumers. In order
to create the impact required, many interventions are required over time to effectively meet the
objectives. The interventions suggested however are all good candidates for change, and can
collectively be pursued over time per the figure below;
Figure 37: Solutions Roadmap
Interestingly, despite the extent of “noise” in the industry related to reducing the cost of
communications in SA, and the plethora of initiatives in the marketplace, there does not seem to be
a local South African Non-Profit and Non-Governmental organisation ion in SA that is dedicated
exclusively to this purpose, and within the context of this report.
A roadmap model per Figure 37 could be a good way of pursuing the various options over time.
Author: Ahmed Kajee
12 March 2013

13. Glossary
APN: An Access Point Name (APN) is the name of a gateway between a GPRS (or 3G, etc) mobile network and another computer network,
frequently the public Internet.
CUG: Closed User Groups are groups of GSM mobile telephone subscribers who can only make calls and receive calls from group members
Downstream: In a telecommunications network or computer network, downstream refers to data sent from a network service provider to
a customer.
GSM: Global System for Mobile Communications, is a standard set developed by the European Telecommunications Standards Institute
(ETSI) to describe protocols for second generation (2G) digital cellular networks used by mobile phones.
ICASA: : The Independent Communications Authority of South Africa (ICASA) is the regulator for the South African communications,
broadcasting and postal services sector.
ISPA: : The Internet Service Providers' Association is a South African Internet industry body not for gain.
Interactive voice response (IVR) is a technology that allows a computer to interact with humans through the use of voice and DTMF tones
input via keypad.
Metro Ethernet: A metropolitan-area area Ethernet, Ethernet MAN, or metro Ethernet network is a metropolitan area network (MAN) that is
based on Ethernet standards. It is commonly used to connect subscribers to a larger service network or the Internet. Businesses can also
use metropolitan-area area Ethernet to connect their own offices to each other.
MNO: Mobile Network Operator (ie MTN, Vodacom)
MVNE: A Mobile Virtual Network Enabler (or MVNE) is a company that provides services to mobile virtual network operators, such as
billing, network element provisioning, administration, operations, support of business support systems and operations support systems,
and provision of back end network elements, to enable provision of mobile network services like cellular phone connectivity.
MVNO: A mobile virtual network operator (MVNO) is a wireless communications services provider that does not own the radio spectrum
or wireless network infrastructure over which the MVNO provides services to its customers. An MVNO enters into a business agreement
with a mobile network operator to obtain bulk access to network services at wholesale rates, then sets retail prices independently. An
MVNO may use its own customer service and billing support systems, marketing and sales personnel or it may employ the services of a
Mobile Virtual Network Enabler (MVNE)
OTA: Over The Air -Wireless communication is the transfer of information between two or more points that are not connected by an
electrical conductor.
Upstream :In computer networking, upstream refers to the direction in which data can be transferred from the client to the server
USAASA: : The Universal Service and Access Agency of South Africa (USAASA) is a State Owned Entity of government established through
the Electronic Communications Act, No 36 of 2005, to ensure that "every man, woman and child whether living in the remote areas of the
Kalahari or in urban areas of Gauteng can be able to connect, speak, explore and study using ICT's.
USSD: (Unstructured Supplementary Service Data) is a protocol used by GSM cellular telephones to communicate with the service
provider's computers. USSD can be used for WAP browsing, prepaid callback service, mobile-money money services, location-based content
services, menu-based information services, and as part of configuring the phone on the network.
VAS: A value-added added service is a popular telecommunications industry term for non-core services, or in short, all services beyond standard
voice calls and fax transmissions
WAPA: : The Wireless Access Providers’ Association (WAPA), established in 2006, is a non-profit IRB (industry representative body) acting as
a collective voice for independent wireless operators in South Africa.
Wi-Fi is a popular technology that allows an electronic device to exchange data wirelessly (using radio waves) over a computer network,
including high-speed Internet connections.
WIMAX: WiMAX (Worldwide Interoperability for Microwave Access) is a wireless communications standard designed to provide 30 to 40
megabit-per-second data rates.
USAL: Under-Serviced Area Licence
Author: Ahmed Kajee
12 March 2013

14. Appendices
Appendix 1 – Industry Contact List
(REMOVED FOR CONFIDENTIALITY REASONS)
Appendix 2 – Stakeholders Interviewed
(REMOVED FOR CONFIDENTIALITY REASONS)
Appendix 3 – Research References
- Library of Congress Cataloging-in-Publication Data: Kim, Yongsoo. (Building broadband :
strategies and policies for the developing world / Yongsoo Kim)
- OECD (2012), “Developments in Mobile Termination”,OECD Digital Economy Papers, No. 193,
OECD Publishing. (http://dx.doi.org/10.1787/5k9f97dxnd9r-en)
- Research ICT Africa - 2012, Policy Brief No. 1, A Gilwald et al
- “Cost of Communication in SA” - Presentation to the Parliamentary Portfolio Committee on
Communications Public Hearing Cape Town, 29 November 2012, A Gilwald
- Independent Communications Authority of South Africa (ICASA) (2010), Call Termination
Regulations, Government Gazette No. 33698, 29 October 2010.
- Farsan Madjdi, Stefan Hüsig, (2011),"The heterogeneity of incumbents' perceptions and
response strategies in the face of potential disruptions", foresight, Vol. 13 Iss: 5 pp. 14 – 33
- From virtual operations strategy to building infrastructure(2007): The case of Tele2 in the
competitive landscape of telecommunications", Strategic Direction, Vol. 23 Iss: 11 pp. 23- 25
- Simon Forge,Colin Blackman, Erik Bohlin, (2006),"Constructing and using scenarios to
forecast demand for future mobile communications services", foresight, Vol. 8 Iss:3 pp.36-54
- J.P. Singh, Sarah M. Gilchrist, (2002),"Three layers of the electronic commerce network:
challenges for the developed and developing worlds", info, Vol. 4 Iss: 2 pp. 31 – 41
- Kenneth Lap Chi Liu (MIT, 2011), Supply Chain for Mobile Network Operators
- Djamal-Eddine Meddour, Tinku Rasheed, and Yvon Gourhant, On the Role of Infrastructure
sharing for Mobile Network Operators in Emerging Markets
- Regulatory Guide for the Mobile Virtual Network Operators (MVNO) operating on the
Romanian electronic communications market (May 2012)
- Telecom Regulatory Authority of India Recommendations On Mobile Virtual Network
Operator (MVNO) (New Delhi, 6 August 2008), Mahanagar Doorsanchar Bhawan, Jawahar
Lal Nehru Marg
Author: Ahmed Kajee
12 March 2013

- Aalto University School of Science, Rushil Dave: Mobile Virtual Network Operator Systems
on Cloud: An Architectural and Cost-benefit Study (2011)
- South African ICT Sector Performance Review 2009/2010: Steve Esselaar, Alison Gillwald,
Mpho Moyo and Kammy Naidoo, Towards Evidence-based ICT Policy and Regulation, Volume
Two , Policy Paper 6, 2010
- Independent Communication Authority of South Africa (ICASA), Cost to Communicate In
South Africa, 29 th November 2012
- James Hodge & Nicolas Theopold, School of Economics, University of Cape Town:
Competition and Regulation in the Telecommunications Industry in South Africa (Prepared
for the Competition Commission), March 2001
- United Nations Foundation, Access to Communication Publication Series Volume 2:
Wireless Technology for Social Change: Trends in Mobile Use by NGOs
- GSMA, African Mobile Observatory 2011: Driving Economic and Social Development
through Mobile Services
- HSRC Press: Mapping ICT Access in South Africa, Chapter 5 – Underserviced
Area Licensing
- InfoDev: Mobile Usage at the Base of the Pyramid in South Africa, December 2012 (Research
ICT Africa and Intelecon)
Appendix 4 – External Web References
External Web Reference Links
Convergence Strategies for non profit organisations
• Welfare & non-profit organizations ICT for the not-for-profit sector | T-Systems
• Mobile-Value-Added-Services-digital-report.pdf (application/pdf Object)
• What is Solavei and How Can You Profit from Social Commerce - YouTube
Telecom Expense Management Software for non profit organizations
• Convergence Strategies - Telecom Expense Management Software For Nonprofit
Organizations
.
Non-profit-organisations organisations in the telecom market
• Peru: Non-profit-organisations organisations in the telecom market | ICT Regulation Toolkit
• The Mobile Nonprofit —
New technologies for organizations to do the most good.
• Creating a Mobile Marketing Strategy for Your Nonprofit Organization | NetSquared
• Cause.it for Nonprofits on Vimeo
• For Non-Profit Organizations – Power of Mobile Giving « Mobile Giving
Digital Trends in South Africa / Africa
• Google's 'Free Zone' brings Internet to feature phone users in emerging markets | Digital
Trends
• Petition: SMS fundraising | NGO Pulse
Advertising based Revenue ( incl MVNO)
• Australian Firm SMSpup Launches Ad Subsidized Mobile Phone Service — paidContent
• NetZero launches free mobile broadband service based on Clear's 4G network - TechSpot
Author: Ahmed Kajee
12 March 2013

• VAS | Prepaid MVNO
WASP Aggregators
• Vodacom
• http://www.mtn.co.za/partners/wasps/WASP%20Partners/Pages/WASPsPartnersOverview.as
pxstart=0&end=zz
•
Agencies that assist with driving Government
• WAPA | Wireless Access Providers' Association of South Africa
• WAPA calls on ICASA to implement lite-licensing licensing in the local wireless access market | WAPA
• USAASA - Universal Service and Access Agency of South Africa
• Parliament of South Africa
APNs (Forward and Reverse Billed)
• MTN Forward Billed APN's
• MTN Reverse Billed APNs
Rural Broadband & Wifi
• Chasing the elusive dream of rural wireless broadband - FierceBroadbandWireless
• Village Telco
• Tellumat - Wireless Solutions - Niche Solutions - Rural Broadband Wireless Access -
Municipal Broadband Project
• The rise of 5GHz wifi
• The surprising truth about wifi services in SA
Research and Incubabtion hubs
• Praekelt Foundation
• CSIR : Information and Communications
TV White Spaces
• The Cape Town TV White Spaces Trial — TENET
• BBC News - TV's white spaces connecting rural Africa
Solar Power Inititatives
• Vodacom solar powers rural village | News24
South African Mobile Internet Costs Comparison
• South African mobile internet data cost comparison
• Mobile data rates under the microscope
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South African school-goers lobby mobile operators for free Wikipedia access
Author: Ahmed Kajee
12 March 2013

Author: Ahmed Kajee 12 March 2013