How WiMax spectrum will be handed out
The allocation of radio spectrum has recently been described as the single biggest obstacle to competitive participation in the telecoms marketplace.
ISPA’s William Stucke said that the Independent Communications Authority of South Africa (ICASA) must urgently review and speed up the way that radio spectrum is assigned to ECNS licensees in order for consumers to see more competition and lower prices in the broadband market.
Good news is that there has been progress towards the allocation of scare spectrum to operators. ICASA yesterday published draft regulations for the procedures and criteria for granting radio frequency spectrum licenses for competing applications.
The latest documentation sees a move away from handing out 20 MHz to each licensee, a change which may have brought about by the outcry from prominent industry players like Intel and Vodacom.
According to ICASA four licensees will be allocated 30 MHz each in the 2.6 GHz band (2 500 – 2 690 MHz). The spectrum license will be technology neutral and in-band migration will be employed where needed.
iBurst, through its holding company WBS, currently has 15 MHz in the 2.6 GHz spectrum band, and while no official announcement has been made yet it is likely that the wireless broadband provider will receive another 15 MHz from the Regulator. Sentech, which currently has 50 MHz of spectrum in this band, is unlikely to be affected by the new regulations in terms of spectrum allocation.
In the 3.5 GHz band (3 400 – 3 600 MHz) ICASA is planning to award licenses to specific geographic catchments areas. Licensees will receive a maximum of 28 MHz of spectrum per catchment area, and licenses can use the spectrum for FDD or TDD methods.
How the process will work
According to Ellipsis Regulatory Solutions the draft regulations set out the structure of an ITA process to be followed by those seeking frequency assignments in designated bands and the information to be supplied by applicants. The focus at this stage is on the 2.6 GHz and 3.5 GHz bands.
“When processing the applications ICASA may either select on the basis of the evaluation criterion set out in the regulations or may invite applicants to participate in an auction process. They may also proceed by way of combination of these processes, i.e. beauty contest followed by auction,” said Ellipsis director Dominic Cull.
The evaluation criteria include:
- Structure of ownership and control
- Nature and extent of consumer benefits to be derived by the general public
- Business plan
- Technical plan
- Track record and expertise in the sector
- BEE (At least 30% direct BEE ownership, i.e. disenfranchised prior to 1994)
- Employment equity
There are a number of restrictions as to who can obtain licensed frequency, including:
- A company cannot be an affiliate or hold more than 5% in another applicant in the same band. This is likely to influence Vodacom who own 24.9% of WBS/iBurst who already has 2.6 GHz spectrum.
- A company cannot have already been granted a licence in the designated band. This will influence iBurst and Sentech in the 2.6 GHZ band and Telkom, Neotel and Sentech in the 3.5 GHz band
- An applicant can not have less than 30% direct BEE ownership. This is a move away from the widely criticized BEE ownership requirement in the initial spectrum allocation document.
Use it or lose it
In the latest documentation ICASA indicated that it “has determined that in cases where the licenced radio spectrum remains unused for a considerable amount of time a principle of use it or lose it will apply.”
This is likely to affect Sentech who has up to now not really used its valuable 2.6 GHz spectrum while other companies like Internet Solutions and MWEB have already indicated that they are ready to roll out a WiMax network if they are to receive spectrum.
It may be argued that Screamer Telecoms is currently using Sentech’s WiMax spectrum to provide services to end users, but this is a very contentious issue which some industry players feel should not be allowed.
The draft regulations are open for comment until 4 September 2009.
WiMax spectrum allocation discussion
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