Johannesburg - Fixed-line telephone operator Telkom has accused municipalities of "premature and opportunistic" behaviour for rolling out telecommunications services in a bid to save costs.

At parliament's communications portfolio committee last week, Telkom said municipalities such as Knysna were breaching the Telecommunications Act by providing telecoms to communities.

About seven municipalities out of 284, including Knysna, eThekwini and the City of Johannesburg, hold private telephone network licences.

The act states that a "private telephone network shall not be provided by means of telecommunication facilities other than facilities made available by Telkom or any other person providing a public switched telecommunication network service".

But last year the minister of communications, Ivy Matsepe-Casaburri, said municipalities could lease spare infrastructure capacity to licensed operators.

Telkom's fixed-line monopoly has been protected by the Telecommunications Act, but this is coming to an end through the pending Electronics Communications Act, which was signed into law two months ago. Telkom contended that since the Electronics Communications Act was in transition, the Telecommunications Act still applied and should be "strictly enforced".

Independent Communications Authority of SA councillor Zolisa Masiza said that while he understood Telkom's strict interpretation of the act, technology could not afford to wait for the regulation as systems needed to be tested in preparation for 2010.

Municipalities such as Knysna, the City of Cape Town and the Tshwane municipality are fed up with Telkom's high tariffs and have decided to roll out wireless services in a bid to save costs. The Tshwane and Johannesburg municipalities also plan to provide telephone and internet access to the public.

Telkom said: "There was no need for municipalities to become network operators, as the opening of the market would … lead to the reduction of costs."

Despite Telkom's argument that Knysna's services were illegal, service provider UniNet argues that its value-added network services licence allows it to provide the network. Last year, Knysna partnered with UniNet to offer wireless connection across the municipality.

According to UniNet, the pricing was 40 percent cheaper than other cellphone services.

UniNet chief executive David Jarvis said that UniNet's initiative was supported by the department of communications, which also helped it to secure funding.