Icasa plans to auc­tion spec­trum by April

• Lim­ited ac­cess to ra­dio waves is hin­der­ing price cuts, op­er­a­tors say

Business Day - - FRONT PAGE - Nick Hed­ley Se­nior Busi­ness Writer hed­leyn@busi­nesslive.co.za

SA’s com­mu­ni­ca­tions regulator plans to auc­tion batches of ra­dio fre­quen­cies for 4G ser­vices by April 2019 and si­mul­ta­ne­ously es­tab­lish a whole­sale open-ac­cess net­work (Woan) aimed at low­er­ing the cost of data. The Woan will be a new en­tity that will sell con­nec­tiv­ity to ser­vice providers. Min­is­ter of telecom­mu­ni­ca­tions & postal ser­vices Siyabonga Cwele said in­ter­na­tional mo­bile op­er­a­tors, fi­nan­cial in­sti­tu­tions and the World Bank had ex­pressed an in­ter­est in back­ing the whole­sale net­work.

SA’s com­mu­ni­ca­tions regulator plans to auc­tion batches of ra­dio fre­quen­cies for 4G ser­vices by April 2019 and si­mul­ta­ne­ously es­tab­lish a whole­sale ope­nac­cess net­work (Woan) aimed at low­er­ing the cost of data.

The Woan will be a new en­tity that will sell con­nec­tiv­ity to ser­vice providers.

Net­work op­er­a­tors have said for years that their lim­ited ac­cess to ra­dio waves, or spec­trum, is hin­der­ing their abil­ity to roll out ser­vices and re­duce the cost to com­mu­ni­cate.

New spec­trum al­lo­ca­tions were halted be­cause the depart­ment of telecom­mu­ni­ca­tions and postal ser­vices dis­agreed with the In­de­pen­dent Com­mu­ni­ca­tions Author­ity of SA (Icasa) on al­lo­ca­tion meth­ods.

But in Septem­ber, Pres­i­dent Cyril Ramaphosa said the gov­ern­ment wanted to ac­cel­er­ate the li­cens­ing of spec­trum in the 2.6GHz, 700MHz and 800MHz bands “to has­ten the growth of mo­bile com­mu­ni­ca­tions”.

Icasa coun­cil­lor Paris Mashile said the Woan would prob­a­bly be re­quired to achieve na­tional cov­er­age within five years.

“It’s a use it or lose it [prin­ci­ple] — we will prob­a­bly give a pe­riod of time within which a cer­tain per­cent­age of cov­er­age should be achieved, which may be 20% per year, up to five years, for na­tional cov­er­age,” he said.

Min­is­ter of telecom­mu­ni­ca­tions and postal ser­vices Siyabonga Cwele said in­ter­na­tional mo­bile op­er­a­tors, fi­nan­cial in­sti­tu­tions and the World Bank had ex­pressed an in­ter­est in back­ing the whole­sale net­work.

The World Bank, as well as Mor­gan Stan­ley, have backed Mex­ico’s whole­sale net­work. In that coun­try, the fi­nanciers are man­dated to raise the na­tional net­work’s cov­er­age from 32% to 92% by 2024.

Dobek Pater, direc­tor at Africa Anal­y­sis, said the Woan may need as much as R100bn to be­come fully func­tional.

“It could be a cou­ple of hun­dred bil­lion by the time it has na­tional cov­er­age,” he said.

The gov­ern­ment could be try­ing to court for­eign telecom­mu­ni­ca­tions groups that al­ready have some form of a pres­ence in SA, he said, cit­ing China Tele­com, China Mo­bile, Or­ange and Bri­tish Tele­com as ex­am­ples.

De­pend­ing on how the Woan is struc­tured, for­eign op­er­a­tors may have to set up sep­a­rate en­ti­ties in SA if they also wanted to of­fer re­tail ser­vices. “And fi­nan­cial in­sti­tu­tions would have to see if it makes sense and how much to put in,” Pater said.

Mean­while, smaller lo­cal op­er­a­tors such as FNB Con­nect, a mo­bile vir­tual net­work op­er­a­tor that rents ca­pac­ity from Cell C, could be in­ter­ested in the spec­trum auc­tion, Pater said.

Cwele said the gov­ern­ment would also al­lo­cate spec­trum for 5G ser­vices in 2019, and start is­su­ing 5G li­cences by 2020.

“We have agreed that the regulator and the in­dus­try will have con­tin­u­ous en­gage­ments so that there’s no de­lay like we had with 4G spec­trum.”

The depart­ment of telecom­mu­ni­ca­tions and postal ser­vices agreed with Icasa and the in­dus­try “not to rush to the courts” when dis­agree­ments arose.

“If there are prob­lems, we will meet even at mid­night to sort things out. That’s a com­mit­ment also from the in­dus­try to ex­pe­dite im­ple­men­ta­tion.

THE WHOLE­SALE OPEN-AC­CESS NET­WORK MAY NEED AS MUCH AS R100BN TO BE­COME FULLY FUNC­TIONAL

Siyabonga Cwele

/Trevor Sam­son

Please call me: Tele­coms min­is­ter Siyabonga Cwele says the in­dus­try and the regulator have agreed not to turn to the courts to re­solve dif­fer­ences.

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