There is tremendous pressure on Vodacom and MTN to reduce their mobile data prices and make Internet access more affordable.
To drive this point home, politicians and the regulator often highlight that South African mobile data prices are significantly higher than many other African countries.
However, what is seldom mentioned is how the government and the regulator are holding back mobile operators through their own incompetence and vested interests.
To give mobile operators more spectrum is the easiest way to enable them to cut data prices.
The reason is simple – a lack of additional spectrum means operators have to build denser radio networks to increase their capacity.
This means more towers, which increases the overall cost to roll out networks and leads to higher data prices.
Providing operators with additional spectrum will make it much cheaper and easier to roll out LTE networks and increase capacity.
These savings can be passed on to consumers in the form of lower data prices and more attractive data products.
Vodacom CEO Shameel Joosub has even stated that if the government gave it more spectrum, it could cut mobile data prices in half.
This raises the question: Why has this not happened?
The answer is not surprising: ineptitude and political games.
Consumers are the biggest losers
The delay in providing South Africa’s mobile operators with additional spectrum is costing the country billions per year, and consumers are the biggest losers.
For over a decade the government and regulator have been promising additional spectrum to operators, but to no avail.
The delay in digital migration, which will free up valuable “digital dividend” LTE spectrum, also forms part of the problem.
South Africa initially planned to complete the digital migration process by November 2011, but over seven years later there is still no end in sight.
The Department of Communications previously explained that while the 2,600MHz and the 3,500MHz bands are available for licensing, it is best to license them together with the spectrum that will be released through the digital dividend.
This means that valuable spectrum, which could have been used by mobile operators to improve their networks and drive down data prices, has been wasted for years.
Good news is that President Cyril Ramaphosa understands the problem and confirmed that the government is working to speed up the release of valuable spectrum in South Africa.
Whether this happens remains to be seen, as many similar promises have been made before.
Spectrum: South Africa vs other countries
When you look at the spectrum assignment in South Africa and other African countries, it is easy to see why MTN and Vodacom are pleading for more.
MTN South Africa, for example, has 38MHz of cellular spectrum. This is nearly half the amount of spectrum the company has in Nigeria and the Ivory Coast.
Vodacom’s situation is similar – it has 38MHz in South Africa and 173MHz in Lesotho.
It is therefore not surprising that Vodacom launched its first commercial 5G service in Lesotho rather than South Africa.
The chart below shows MTN and Vodacom’s spectrum in various African countries where it operates.
The tables below show a breakdown of the spectrum allocation in various countries where MTN and Vodacom operate.
It should be noted that these spectrum breakdowns show mainstream IMT bands, whereas certain operations may have additional spectrum assigned for legacy technologies such as WiMAX.
|MTN Spectrum per Country|
|Spectrum Band||South Africa||Uganda||Ghana||Nigeria||Ivory Coast|
|800MHz||–||5MHz (4G)||10MHz (4G)||–||10MHz (4G)|
|900MHz||11MHz (2G, 3G and 4G)||8.2MHz (2G and 3G)||8MHz (2G and 3G)||5MHz (2G and 3G)||10MHz (2G and 3G)|
|1,800MHz||12MHz (2G and 4G)||15MHz (2G)||10MHz (2G)||15MHz (2G)||15MHz (2G)|
|2,100MHz||15MHz (3G and 4G)||15MHz (3G)||15MHz (3G)||10MHz (3G)||15MHz (3G)|
|2,600MHz||–||10MHz (4G)||20MHz (4G)||30MHz (4G)||20MHz (4G)|
|Dedicated newly issued spectrum for 4G||–||15MHz||30MHz||40MHz||30MHz|
|Vodacom Spectrum per Country|
|Spectrum Band||South Africa||Mozambique||Kenya||DRC||Lesotho|
Excellent 4G coverage in South Africa
Despite the shortage of spectrum in South Africa, Vodacom and MTN have achieved excellent 4G population coverage.
This was achieved by refarming 2G and 3G spectrum to roll out 4G services, as the government had not assigned new spectrum suitable for the technology.
Refarming refers to the practice of repurposing spectrum for a different technology or use. In simple terms – Vodacom and MTN took spectrum away from 2G and 3G to roll out 4G.
The chart below shows MTN and Vodacom’s 4G population coverage in their major African operations.
Please note that the DRC and Mozambique have no 4G coverage.
Spectrum should be assigned
Instead of simply accusing Vodacom and MTN of profiteering and trying to force them to drop prices through political and regulatory means, assigning spectrum is a much better solution.
By giving Vodacom and MTN more spectrum it forces them to come clean on their commitment to cut data prices when they receive more spectrum.
Some of the spectrum can also be used to increase competition, which will put further pressure on the two major operators to compete on price.
Assigning new spectrum is by far the best thing the government can do to make Internet access more affordable.
Before politicians try to score cheap political points by slating Vodacom and MTN, they should get their house in order first by completing the digital migration and giving additional spectrum to operators.