When the government unveiled its plan to launch a wireless open-access network (WOAN), it drew sharp criticism from many stakeholders.
The main reason for the resistance was that the government was planning to give all available spectrum to the WOAN.
The government argued that this would reduce duplication and infrastructure cost, and provide faster and more affordable mobile broadband to all citizens.
We have, however, heard all of this before. South Africa’s government is well-known for its grandiose plans and big promises, but less so for its results.
And to now use all the available spectrum on a WOAN, which has not been successfully implemented anywhere in the world, is downright stupid.
The simple truth is that the government cannot run telecoms projects and should not be allowed to hog valuable spectrum to try and prove the world wrong.
New spectrum policy
Since the initial WOAN proposal, the Department of Communications has published its policy on high-demand spectrum.
According to the new high-demand spectrum policy, the WOAN will only get a portion of the available high-demand spectrum, leaving the rest to the private sector.
The WOAN will, however, still get preferential treatment when it comes to the assignment of spectrum within the 700MHz, 800MHz, and 2,600MHz bands.
This is in line with the blended model proposed by Vodacom and MTN, where they get access to some of the spectrum instead of the WOAN getting everything.
Remgro/CIVH enters the race
The WOAN’s biggest challenge was that no serious investor showed a strong interest in joining this project – until now.
Community Investment Ventures Holdings (CIVH), which is 54% owned by Remgro and 35% by NewGX, seems keen to get involved in the WOAN.
With former Vodacom CEO Pieter Uys as chairman and Vodacom’s Andries Delport as CTO, CIVH has the perfect skills to build and manage a wholesale mobile network.
With deep pockets and a big fibre footprint through DFA and Vumatel, CIVH is the government’s best chance to get the WOAN right.
Vumatel has shown that an open-access model, which empowers ISPs to compete as service providers, works well to drive down prices and encourage innovation.
If done right, CIVH can shake up the mobile data market in the same way Vumatel has revolutionised the fibre-to-the-home market.
The big risk – Government interference and incompetence
The biggest risk to the WOAN is government interference and not trusting the free market to drive down prices and provide quality services.
Unless a company like CIVH is given the freedom to run the WOAN as a commercial entity (like Vumatel), it is set to fail.
Another risk is that the government’s obsession with the WOAN will further delay the allocation of new spectrum which is desperately needed in South Africa.
Ellipsis Regulatory Solutions owner Dominic Cull said the implementation of the WOAN and getting applications in for licenses could delay the spectrum auction by another year or two.
So, while I am warming up to the concept of a wireless open-access network run by a company like CIVH, I remain sceptical about the government’s ability to do what is needed to make it work.
The government has broken so many businesses with its ideological plans that it is hard to believe that it will do things differently this time around.
Let’s hope I am wrong.