Vodacom, MTN, and Telkom trying to exploit Covid–19 disaster — Rain CEO

Mobile network operators in South Africa should not be taking advantage of the Covid–19 pandemic to gain access to precious radio frequency spectrum, Rain CEO Brandon Leigh has told MyBroadband.
Leigh said that Rain agrees with the Independent Communications Authority of South Africa (Icasa) that the temporary spectrum assigned to operators must not become a side-door for permanent allocations.
“This was never the intent,” said Leigh.
Spectrum is the raw capacity wireless networks use to connect devices such as mobile phones to cellular towers.
Icasa assigned spectrum to mobile networks at the beginning of South Africa’s national state of disaster to help them cope with the increased demand for data.
As people were told to stay at home and companies required to allow staff to work remotely, a surge in demand for mobile data was anticipated.
Operators have used this temporary spectrum to expand their 4G and 5G networks. Vodacom and MTN used some of the spectrum to accelerate the launch of their 5G networks.
“Extending the temporary spectrum allocation ultimately disincentivises the operators from supporting the auction,” Leigh argued.
“This would circumvent the whole auction process or any other pro-competitive formal allocation process.”
Leigh’s comments come after Telkom declared victory over the Independent Communications Authority of South Africa (Icasa) when the regulator consented to an order setting aside its spectrum assignment process.
Icasa announced at the end of August that it was abandoning its defence against Telkom’s case.
The regulator said at the time that it chose to consent to the order to avoid protracted drawn-out litigation.
Just before it announced its intention to concede, Icasa revealed that it plans to take back the temporary spectrum on 30 November.
Leigh said they were not surprised by Icasa’s announcement to take back the temporarily assigned radio frequency spectrum.
“We have prepared our technical teams to be ready to hand back the spectrum to ensure it will not impact our customers.”
When Telkom launched its legal challenge against the spectrum process, it said that Icasa’s approach would “mess up the industry for 20 years” and that there are “a number of grounds of review”.
Two of Telkom’s key points were:
- The “digital dividend” spectrum in the 700MHz and 800MHz bands are not currently commercially viable because television broadcasters are still using it.
- Icasa has not considered the lack of competition in South Africa’s cellular market in its spectrum auction plans.
MTN also launched a case against the spectrum auction, taking issue with Icasa’s plan to exclude “Tier 1 operators” from the first round.
Vodacom and MTN would therefore not be allowed to bid on certain lots of spectrum.
MTN warned that this may cause it to lose out on the 5G spectrum it needs, and that it may choose not to participate in the rest of the auction at all if it can’t get the spectrum best suited to its network.
MTN also said that the smaller operators would pay far less for the spectrum than it would be willing to.
“Rain engaged in settlement discussions and remained hopeful throughout that it would produce a favourable outcome for all parties involved,” Leigh said.
“Unfortunately, this did not materialise. The breakdown of these settlement discussions will have a negative impact on the telecommunications industry and ultimately have an impact on the consumer as well.”
Vodacom CEO Shameel Joosub said they are engaging with the Ministry of Communications and Digital Technologies and Icasa to find a quick solution to the spectrum auction being set aside.
Joosub said that there is lots of support from the government — all the way from President Ramaphosa — to get the process done.
However, this support needs to be turned into definitive timelines and definitive actions.
“We need to put a lot of energy behind it now because South Africa is getting left behind,” Joosub said.
“We need to move on 5G. We need to get the spectrum allocated.”
Joosub disagreed with Leigh on the issue of the temporary spectrum, saying that it was disappointing that Icasa plans to take it back before the spectrum auction has happened.
“We do need an extension on the temporary spectrum to carry on until this auction process happens so that customers don’t suffer in the short term,” said Joosub.
Icasa said it hopes the auction for high-demand spectrum can take place by the end of January 2022.
However, industry insiders have told MyBroadband that this ambitious deadline is unlikely to be met, considering that Icasa has to restart the process.