By Mbatjiua Ngavirue
WINDHOEK
The looming court battle between M-Web and Telecom Namibia promises to be a monumental fight that could have far-reaching consequences for broadband Internet services in Namibia.
It is now widely known, in both legal circles and the IT community, that
M-Web is mounting a major challenge to the stranglehold which Telecom Namibia has over ADSL broadband services.
The second respondent in the case is Telecom Namibia’s line ministry, the Ministry of Works, Transport and Communications (MWTC).
M-Web’s lawyers, Ellis & Partners, had still not lodged the case with the Registrar of the High Court by Friday, but it is an open secret they have issued summonses against both Telecom and MWTC.
Both Ellis & Partners and the Government Attorney refused to even confirm they have respectively issued and received summons, claiming the matter is sub judice.
It is highly unusual for lawyers to claim that merely disclosing the existence of a pending case is sub judice.
This gives some indication of the sensitivity, high stakes and tens of millions of dollars involved.
It is, however, possible to piece together the likely outline of M-Web’s case after speaking to local Internet Service Providers (ISPs) and industry analysts.
The case is likely to revolve around the monopoly Telecom Namibia has over the local loop of the domestic ADSL broadband network, and its alleged abuse of this monopoly power.
Industry sources say M-Web will argue that Telecom is abusing its monopoly by charging ISPs retail prices for access to the ADSL backbone, making it impossible for them to compete in the ADSL market.
The likelihood is that M-Web will also argue there is an inherent conflict of interest between Telecom Namibia being a monopoly wholesale provider of ADSL backbone services and a retail seller of ADSL services.
Industry sources say Telecom Namibia wants to charge second-tier ISPs (dial-up service providers) the same price for access to ADSL as it charges its own business and home-use customers.
These prices range from N$5.50 to N$7 a minute for basic broadband service and N$8 to N$13 for value-added services such as multiple e-mail addresses, website hosting and domain name service.
Theoretically, dial-up service providers could break even by reselling ADSL at cost and accept that they will make no money on the service.
In reality, industry sources say, they will make a loss on ADSL services because they will still have to pay for customer support on a service they make no money on.
Industry experts say Telecom Namibia used the same “bait ‘n switch” tactic on ISPs that it used with its Switch mobile phone service on cell phone operators.
Naming the service “Switch” was perhaps a piece of dark humour on Frans Ndoroma’s part.
In the case of Switch, Telecom Namibia allegedly used the bait that Switch would be a fixed-wireless service to hook the Namibia Communications Commission (NCC).
Once the NCC took the bait and granted Telecom a frequency licence, it covertly switched “Switch” into a fully-fledged mobile phone service under cover of darkness.
Similarly, industry sources say, Telecom gave ISPs iron-cast assurances in 2000 that it would not compete against its own customers by entering the dial-up Internet service industry.
Having thrown out the bait, Telecom however switched in that very same year, introducing the I-way dial-up service in direct competition to its own customers.
Ironically, according to knowledgeable sources, while Telecom Namibia refuses to sell ADSL to second-tier ISPs at wholesale prices it sells ADSL to other first-tier ISPs (those serving only corporate customers) at wholesale prices.
Sources suggest this means that Telecom has concluded the gravy lies in the dial-up market, and therefore wants to achieve market dominance in this segment too.
The rationale Telecom Namibia uses for charging other dial-up service providers’ retail prices for ADSL, is that it invested huge sums of money in the infrastructure, so why should others get it at a discount.
Industry sources, however, say Telecom Namibia’s huge investment in ADSL is largely a myth.
“All they did was install two specialist modems at either end of the local loop,” one industry expert derisively remarked.
They maintain that Telecom’s argument could hold more water if the law allowed other industry players to make the same investment on a level playing field.
They are however, prohibited by law, and whenever they have tried Telecom Namibia have used the Namibian Police to confiscate their equipment.
Many industry analysts say that since 2000 Telecom Namibia has essentially changed its entire business mode, with potentially disastrous consequences for the country’s telecommunications and IT future.
The feelings within the industry seem to be that Telecom should stick to its core business of acting as a backbone infrastructure company and strive for excellence in that field.
Instead, it has set out on a path of trying to be all things to all men (and women) – in direct competition with its own customers.
Telecom wants to be a backbone infrastructure company, a first- and second-tier ISP, a mobile phone company and a wireless Internet operator with both CDMA and WiMAX, all at the same time.
The result of trying to be a jack-of-all-trades, some observers say, is that Telecom Namibia has become master of none.
On September 17, 2006, Telecom Namibia announced the signing of a contract with the Chinese company, Huawei Technologies Co, to deliver ADSL equipment to 120 locations/points around the country.
The terms of the contract were that the two parties would install 7.088 ADSL ports over the next three months, providing users in Windhoek and across the country with “quality internet connection”.
Almost seven months later, Namibian consumers have yet to smell the whiff of any ADSL.
South African broadband customers consider Telekom South Africa’s ADSL offering at 384 to 512 Kilobits per second something of a joke.
In developed countries, the industry considers nothing less than 1 megabit per second true broadband,
Local experts estimate that when Telecom launches its ADSL service it will deliver a maximum capacity of 225 kilobits per second service if 200 of Telecom Namibia’s primary users are online at the same time.
This is well below the minimum acceptable world standard of 384 kilobits per second.
Furthermore, these experts say, with 200 users there would be no spare capacity left for dial-up customers or existing Digicom users.
The cause of this logjam is the fact that Namibia only has 61 Mbps broadband feed coming into the country, in comparison with a 3??????’??