Free Market Foundation executive director Leon Louw has skewered planned amendments to legislation that governs South Africa’s ICT sector, saying the Electronic Communications Amendment Bill, which will introduce a wholesale open-access network (Woan), will cause enormous damage to the industry.

Speaking to an audience in Johannesburg on Wednesday (click below to listen to the podcast), Louw blasted the idea of the Woan, saying that the only other country in the world that has attempted something similar is Rwanda -- and it has been a “disaster” for the East African nation. Prices are high, coverage poor and uptake low, he said.

In terms of the amendment bill, the South African government wants to reserve a big chunk of radio frequency spectrum for the Woan and to force commercial operators to buy capacity from the wholesale provider.

It even moots the idea of taking away existing spectrum allocated to operators such as Vodacom and MTN. If government attempts this, the operators are likely to challenge it on constitutional grounds.

In the presentation, Louw labelled government’s failure to allocate additional spectrum to commercial operators as “outrageous”.

“The bill is truly weird. Why would you want to uproot, destroy or eliminate one of South Africa’s biggest success stories, in fact the biggest success story of the new South Africa?” he asked.

Louw said it was a mistake for the mobile operators to try and forge a middle ground with government -- the so-called hybrid model where the operators will get spectrum in return for also supporting the Woan by buying capacity from the new company.

“They assumed trust and honour of the kind you get between businesses that you do not get with politicians. It’s a completely different world and they are babes in the wood and few of them know how to deal with the world of politics,” Louw said in response to a question from TechCentral. “Businesspeople are simply unaccustomed to this level of duplicity…”