All mobile operators want to keep temporary spectrum — except one
All South African mobile operators favour extending the use of temporary spectrum until the spectrum auction is concluded, except one – Rain.
The Independent Communications Authority of South Africa (Icasa) temporarily assigned radio frequency spectrum at the start of South Africa’s national state of disaster.
This spectrum, Icasa said, was needed to help network operators cope with the surge in demand for data during the Covid–19 lockdown.
The regulator now wants this spectrum back. The Icasa Council said temporary spectrum assigned to licensees would have to be returned by no later than 30 November 2021.
Telkom, MTN, and Vodacom have launched legal action against the regulator’s decision to take back the temporary spectrum.
As part of their legal challenge, the operators argued that the temporary spectrum must remain in place for the duration of South Africa’s Covid-19 national state of disaster.
MTN added that it saw unprecedented growth in data traffic when South Africa’s state of disaster began, impacting the quality of service on its network.
MTN’s chief corporate services officer, Graham de Vries, said the consequences to MTN’s network would be dire if Icasa takes back the temporary spectrum.
Graham de Vries, MTN chief corporate services officer
Vodacom also urged the regulator to reconsider its withdrawal of the temporary spectrum at the end of November.
Vodacom spokesperson Byron Kennedy said they want Icasa to extend the use of temporary spectrum for as long as the country remains in a National State of Disaster or until three months after the high demand spectrum auction is concluded.
Cell C and Liquid Intelligent Technologies SA also favour extending the use of temporary spectrum until an auction takes place.
Liquid told MyBroadband South Africa needs spectrum now, more than ever, to support reliable and efficient telecommunications networks.
Cell C’s chief legal officer, Zahir Williams, said the national lockdown has increased voice and data traffic, contributing to network congestion.
“Although we are just emerging from the third wave of the pandemic, remote work is here to stay for many organizations, and remote workforces are still consuming more data to continue working from home,” Williams said.
“For many South Africans working, learning and studying, transacting and entertaining online is a daily digital reality.”
“To fully experience the benefits of our digital lives, we need more, not fewer data, and this, in turn, requires more, not less spectrum.”
That means five of the six operators who will form part of the spectrum auction – Vodacom, MTN, Cell C, Telkom, and Liquid Telecom – support the use of temporary spectrum until after the auction.
The only mobile operator who wants the regulator to take back the temporary spectrum is Rain.
Brandon Leigh, Rain CEO
Rain CEO Brandon Leigh said the main reason they do not want the temporary spectrum to remain “as is” is the process of how it was allocated.
“The temporary spectrum was allocated on an emergency basis, so no consideration was given to the long-term effects on the market,” he said.
“The framework used for the application and rewarding of temporary was under the disaster act and was not designed to be a formal licencing process.”
Leigh said the perpetual licensing of temporary spectrum creates a disincentive for the recipients to support the spectrum auction as effectively they have already been awarded the spectrum they would otherwise need to buy at auction.
To understand why Rain wants mobile operators to give back the temporary spectrum, you have to understand their business model.
Rain’s main revenue stream is charging Vodacom to roam on its network.
Rain’s 1,800MHz and 2,600MHz spectrum bands are used to enhance the capacity and performance of Vodacom’s network.
The only reason Vodacom pays Rain to roam on its network is a lack of spectrum. The more spectrum Vodacom has, the less it uses Rain’s network, and the less money Rain gets.
It is, therefore, in Rain’s interest to ensure Vodacom does not keep the temporary spectrum.
Shameel Joosub, Vodacom CEO
Leigh said if Icasa decides to offer spectrum as an interim measure for the period before the auction, there should be a new licensing process.
It is unrealistic. Anyone who has followed the South African telecoms industry knows that an interim licensing process is a pipe dream.
Even Icasa’s plan to license new spectrum no later than the end of March 2022 is ambitious and unlikely to happen.
The spectrum licensing process has been dragging on for over a decade, with many empty promises and missed deadlines along the way.
As a result, valuable spectrum has been wasted for years when network operators could have used it to lower data prices, improve network quality, and even increase competition.
The temporary spectrum assignment is a tremendous opportunity to ensure the spectrum is not wasted.
An agreement to allow mobile operators to keep the temporary spectrum until after the high demand spectrum auction is concluded is an elegant solution to a decade-long problem.
If the Department of Communications and Icasa stick to their deadlines, operators will get additional spectrum soon. If not, the temporary spectrum will continue to benefit consumers and the country.
Like Vodacom CEO Shameel Joosub said — it is time for all parties to put their vested interests aside and do what is best for South Africa.
What is best for South Africa is to ensure mobile operators have access to additional spectrum — however this is achieved.
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