Read time: 3 minutes

SA's telco industry warns government to release spectrum fairly

By , Portals editor
South Africa , 07 May 2021

The South African government has a critical responsibility to release spectrum in a manner that guarantees entrance for new market players, lower costs and equitable distribution.

This is according to Ignition Telecoms CEO Valde Ferradaz who said in a recent virtual conference that without fairly and responsibly opening up the country’s spectrum to new competition, MNVOs and investment, that capacity was wasted.

“Valuable spectrum will be wasted if the same monopolies are allowed to generate bigger wealth instead of diversifying and allowing for spectrum to be more broadly used. This is the natural evolution by which the government can grow the economy – they have no choice beyond recognising data plays an invaluable role in that process,” he told the virtual audience.

Ignition Telecoms CEO Valde Ferradaz.
Ignition Telecoms CEO Valde Ferradaz.

Ferradaz’s comments come as the Independent Communications Authority of South Africa (ICASA) announced another delay in releasing spectrum. An interdict granted to Telkom towards the end of March saw the spectrum auction postponed further – only a few days before the spectrum auction was contractually due ahead of the 31 March deadline.

Telkom is asking the court to order South Africa’s migration from analogue to digital broadcasting – a move that will free up the 700MHz and 800MHz bands – be completed by 30 June 2021.

However, President Cyril Ramaphosa has indicated this will only happen by March 2022 and the spectrum auction delay is viewed as a victory for the parastatal telecommunications company and free-to-air television entity at the expense of network operators MTN and Vodacom.

The operators have stated South Africa lags years behind international schedules for licensing 4G-suitable spectrum and the spectrum auction delay will further hinder rolling out commercial 5G networks.

ITWeb reported that according to key findings of the Socio-Economic Impact Assessment paper on SA’s ICT and spectrum policy, flaws in SA’s spectrum auction process will result in the alienation of the country’s biggest MNOs – MTN and Vodacom – and, in turn, deprive almost 75% of South Africans of good quality digital services.

Industry expert Christoph Klein, CEO of dotadvisors, is quoted as saying: ““The current regulatory framework of assigning spectrum to MNOs (and other economic entities) on an inflexible exclusive basis is unfit for the future of further massive increases in data demand and cutting-edge innovations such as in 5G, Internet of things and other emerging technologies.”

Ferradaz said the industry hoped the regulator would “deliver on economic expectations” and, despite the current controversies, there would be decisions on opening the market for MVNOs.

Those players had the opportunity to put data into consumers’ hands as rewards for shopping loyalty and thus boost access to education, healthcare, pharmaceuticals, medicines and studies in an economy struggling with escalating unemployment, poorly functioning state healthcare facilities and under-resourced schools.

“Historically, the government made mistakes on providing structures and services meaning the sector succeeded predominantly through a private sector accountable to shareholders. The spectrum auction provides the platform off which the government can balance the country’s economic growth against citizens’ needs,” he said.

He said the solution could not pivot around the same “follow the capital strategy” and should focus on “follow the economic needs strategy”, particularly as South Africa battles COVID-19.

“When the regulator awards spectrum, the national demand and market needs will balance connectivity allowance and availability … first-world countries are leap-frogging the old ways for doing business (by) recognising the need for wholesale spectrum,” he said referencing the highly competitive Dutch system.

He added India’s decision to discount costs across the board effectively enabled business to make money while rendering data affordable. Locally, a potential solution was for the government to release a portion of the available spectrum to force down data prices and encourage roll out, while reserving spectrum for a later allocation in line with economic needs. This allocation could facilitate diversification and open competition.

“This will balance the importance for connecting the nation with simply rolling out spectrum,” he said, indicating the long-term effect ensured economic growth.

Daily newsletter