Long walk to 5G: bidding for SA wireless spectrum to begin

The Independent Communications Authority of South Africa (Icasa) this week announced the long-awaited date for the invitation to apply (ITA) for wireless open-access network (WOAN) and the international mobile telecommunications spectrum, prompting excitement but also concerns over the possible prices of this sought-after commodity.

The ITA date has now been set for 30 September.

The rollout of spectrum for mobile and other services has seen multiples delays, leaving South Africa lagging behind somewhat in the implementation of technological services, including the much-vaunted 5G mobile technology.

According to a recent study by World Wide Worx, big mobile players MTN, Vodacom, Cell C, Telkom and Seacom, have expressed concern that the high auction price of the spectrum could be a barrier to greater network investment.

Despite the progressive information communications technology (ICT) policy, set out in the Electronic Communications Amendment Bill, South Africa has been lagging behind other countries in issuing the much-needed spectrum, which has been in limbo for some 10 years – outlasting eight communications ministers.

Icasa originally issued an ITA for high-demand spectrum in 2016, but withdrew it after being sued by then telecommunications minister Siyabonga Cwele, who accused the regulator of issuing the ITA “prematurely and precipitously without the existence of the requisite regulatory steps that must precede them”.

In 2018, Icasa agreed to withdraw the ITA, which provided an insight into the likely floor price for bidding for auction – set at a minimum of R3 billion.

Icasa chairperson Dr Keabetswe Modimoeng has blamed the delay on several factors, including “among others – the prioritisation of the release of the Covid-19 emergency spectrum, additional considerations, particularly on the viability of the WOAN as well as the fact that (Icasa) council was almost inquorate for a period close to three months”.

Modimoeng assured the industry that Icasa has also completed a process to determine the “fair economic value of the five spectrum bands that will be made available for auction and spectrum that will be made available to the WOAN taking into consideration the current state of competition in the South African market”.

What’s the big deal about spectrum allocation?

The spectrum was “one of the most critical and potentially contentious regulatory processes ever undertaken by Icasa, with immeasurable economic value for the country”.

“The delicate nature of the licensing process requires that the authority exercise added caution to ensure full compliance with all administrative and procedural fairness requirements.

“It is also of significance that the ultimate outcome of the process receives the buy-in and support from all interested stakeholders.

“We appeal to stakeholders to adhere to deadline in order to avoid any further delays to the process,” said Modimoeng.

Regarded as “the oxygen” and “the lifeblood” of the mobile industry, spectrum refers to the radio frequencies allocated in the country by Icasa to the industry and other sectors, over which they are allowed to broadcast their communications.

“In light of the time lost as a result of the delay in the issuing of the ITAs, the auction of the high demand spectrum, which was originally contemplated to take place during December 2020, will be completed by no later than 31 March 2021.

“In line with its processes in the development of the ITAs, the authority considered and analysed all representations received in response to the information memorandum (IM).

“To this end, a reasons document capturing the Authority’s positions on the received comments will be published concurrently with the ITA,” explained Modimoeng.

Key considerations from representations into the information memorandum include:

• Development of various empowerment obligations to be imposed on the successful bidders in the auction process, including a requirement to support mobile virtual network operators.
• Requirement for successful bidders to support the WOAN through procurement of a minimum 30% national capacity.
• Imposition of empowerment obligations on the WOAN in order to ensure that it is a credible empowerment tool that will assist the Authority to achieve the sector’s transformation agenda.
• Structuring and framing of the lots in a manner that balances the objective to promote effective competition, facilitate new entrants and raise revenue for the fiscus.

Over a decade of delays, but why?

So slow has been South Africa’s telecommunications and broadcasting advancement, that the country has been unable to keep up with international trends – creating business uncertainty.

In attempts to usher in changes aimed at aligning the country with global standards, the Independent Communications Authority’s (Icasa) has often found itself at loggerheads with politicians – in a government department that has seen ministers coming and going.

The chronicle of events included:

• Significant blocks of high-demand spectrum issued to major network operators by Icasa since 2005, when it allowed the use of the 2.1GHz band for the roll-out of 3G networks by Vodacom and MTN. Cell C was allocated spectrum in 2011.
• Icasa issuing an invitation to apply (ITA) in 2016 for high-demand spectrum, but withdrawing it after being sued by then telecommunications minister Siyabonga Cwele, who accused the regulator of issuing the ITA “prematurely and precipitously without the existence of the requisite regulatory steps that must precede them”.
• The regulator in 2018 withdrawing the ITA, providing an insight into the likely floor price for bidding for auction – set at a R3-billion minimum.
• Icasa in June 2020, informing the parliamentary portfolio committee on communications that the ITA would be issued by the end of the month, but due to “complexity of the process”, this could not be realised.

With South Africa having missed the June 2015 deadline set by the International Telecommunication Union for countries to complete the full switch from analogue to digital terrestrial television (DTT), the country continued to lag behind other nations. This process is still in limbo, while government and the private sector battle over encryption protocols for digital set-top boxes.

Mobile operators have claimed that much of the emergency spectrum has proved to be less helpful than originally expected, due to interference from television broadcast services that have yet to migrate from analogue to digital.

Barely a year after government approved a revised delivery model to implement the Broadcasting Digital Migration (BDM) programme, it said it was going back to the drawing board to “fast-track” the delayed DTT.

In her budget vote speech in 2019, Communications and Digital Technologies Minister Stella Ndabeni-Abrahams promised the country a new model.

“Within 90 days, the department will present the reviewed broadcasting digital migration delivery model in order to enable the swift release of the high-demand spectrum needed for the rollout of broadband and effective DTT migration,” said Ndabeni-Abrahams.

South Africa is still waiting.

– brians@citizen.co.za

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