Nationalisation spectre lurks in spectrum plans
THE integrated ICT policy white paper, approved last month by the cabinet, is a threat to the telecommunications industry and must be revisited urgently because it will chase away those investing billions of rands a year into network infrastructure.
That’s the blunt warning from MTN South Africa CEO Mteto Nyati, who said this week that if the government went ahead with a plan in the white paper to create a single national wireless open-access network, it would result in the creation of a new monopoly, to the detriment of consumers.
The white paper has been widely panned by industry players and analysts for requiring that all unallocated mobile spectrum be made available to the new network, and for raising the prospect of operators’ existing spectrum allocations — which they’ve used to build their 2G, 3G and 4G networks — being nationalised.
“The white paper introduces uncertainty in the industry . . . and will make current players question whether they should be making investments in this country,” Nyati said.
As South Africa fights off a credit rating downgrade, the last thing the government should do is to introduce untested policies that affect growth industries such as ICT. “How can something like this even happen?”
The policy paper threatened to disrupt an industry that was “an enabler for all other industries”, he said.
“Without the ICT industry, banks wouldn’t function. We are attacking an industry that underpins everything else, whether [it is] healthcare or financial services.”
The government celebrated when a big carmaker built a R2-billion plant in South Africa. Yet the mobile operators together invested more than R20-billion in network infrastructure every year, Nyati said. “It’s been taken too much for granted that this money will continue to come. The structure that is being proposed, this single open-access network, threatens that.”
If there was only one infrastructure provider, Nyati said, customers wouldn’t be able to switch networks if they were unhappy with pricing, or if the network was unavailable.
“If this single network goes down, what happens to the economy? These are the things that need to be thought through. We are concerned about the lack of any socioeconomic impact assessment. Our constitution demands that for any new policy, we need to do that.”
Nyati slammed the proposal that operators be forced to hand back existing allocations. “How can you do that under the constitution? It is not possible, but the white paper is saying that is what is going to happen. I am very concerned for our country.”
The main objective of the white paper, to give smaller players access to spectrum and allow them a foothold in the industry, could be achieved in the current market construct, Nyati said.
He suggested that new mobile virtual network operators — such as Virgin Mobile and FNB Connect — could piggyback on the networks of the incumbent players. MTN is building a platform to facilitate such entrants into the market.
“Let’s not destroy what we have in
How can you do that under the constitution? But the white paper says that is what is going to happen
order to build something new. Let us try and build on what we have . . . We have signed up for inclusive growth. Let’s find ways of bringing new players [into the industry] within that [framework],” Nyati said.
The white paper does have the support of one important industry bloc: the internet service provider community. The ISP Association, which represents 178 mostly smaller service providers, has described the document as “forward-looking” and “long overdue”.
The association’s regulatory adviser, Dominic Cull, said: “In general, the white paper is broadly positive and forward-looking, and it reflects a much better understanding of contemporary electronic communications and related markets.
“While we understand that some of the proposed interventions will not be universally welcomed, we now need to get a move on.”
However, the association was worried about implementation. The white paper “does not convincingly outline how the capacity and expertise shortcomings of the regulator, or policymaker, will be addressed”.