Regulator disrupts commercial networks country wide. Losses run into millions of dollars
Namibian banking services and other vital services country-wide were in disarray last week Thursday when internet services for approximately sixty commercial clients were suddenly interrupted. The black-out lasted more than 30 hours and it was only late on Friday that internet services were restored. The backbone of the economy was essentially disabled for almost two workdays.
A high-level technical team from leading South African commercial internet company, Internet Solutions, arrived in Namibia this Tuesday 20 June, to start negotiations with the Communications Regulatory Authority of Namibia (CRAN) and to start the process of assessing the damages and direct financial losses that accummulated as a result of the extended service disruption.
Following an action by the communications regulator, CRAN, banking services across Namibia, including Windhoek and all towns, were halted without prior warning. CRAN suspected that the Internet Solutions operated in contravention of Section 37(1) of the Communications Act.
“CRAN is of the opinion that there exists reasonable grounds that Internet Solutions Namibia (Pty) Ltd contravened section 37(1) of the Communications Act (8 of 2009) in that it is providing unlicensed telecommunications services by renting rack space for installation equipment to facilitate telecommunications services in Telecom Namibia and Paratus Telecom Data Centres” stated the CRAN Chief Executive, Festus Mbandeka in a statement explaining the unexpected country-wide network disruptions.
A warrant was obtained to inspect internet infrastructrure installations in the data centres of Telecom Namibia and Paratus Telecom, where Dimension Data leases so-called rackspace on behalf of Internet Solutions. Immediately after the on-site inspections, CRAN officials ordered the two telecommunications companies to shut down all links operated by Internet Solutions.
What followed was almost two days of mayhem with many critical commercial and operational functions across Namibia laid lame.
Banks systems were down except for Bank Windhoek and Standard Bank’s domestic networks which are not dependent on an external service provider. Many other services were interrupted including pre-paid electricity, cellphone airtime vendors, and Point of Sale devices across the entire Namibia. Commerce was disrupted through a myriad of channels at hundreds of retailers and other service providers. Bank ATM’s were offline, leaving thousands of tourists stranded and without the possibility of drawing Namibia Dollar to pay for local services and products.
But even bigger damage was caused in investment banking than in retail banking. All data lines for banks to South African institutions, and to their peers in the rest of the world, was dumped in complete darkness. A bank official told the Economist that the only saving grace was the fact South Africa had a public holiday on Friday, 09 June, and that transaction losses would have been much higher if Friday was also lost as a trading day. The effect of Thursday’s systems-down was that portfolio transactions worth millions of dollars could not be executed.
As the chaos unfolded in the financial services sector, Internet Solutions’ local representative tried frantically to resolve the problem.
Dimension Data Managing Director, Rowan Kleintjes explained. “In South Africa Dimension Data owns Internet Solutions. Both Dimension Data and Internet Solutions have licenses in South Africa. In Namibia, Dimension Data Namibia has its own ECS and ECNS license. Dimension Data Namibia has an interconnect agreement with Internet Solutions whereby Dimension Data provides services to Internet Solutions clients.”
Regarding the licencing issue between Internet Solutions and the communications regulator, Kleintjes said Dimension Date can not speak, either on behalf of the regulator or the internet service provider
“The Authority will now utilise the evidence to finalise the prosecution of the matter as per the relevant provisions of the Communications Act. Members of the public are therefore cautioned to refrain from entering into any business transactions relating to the provision of telecommunications services with Internet Solutions (Pty) Ltd and or any other unlicensed operator” stated Mbandeka.