South African operators won’t have to give spectrum back, yet – Minister

The Minister of Telecommunications and Postal Services, Siyabonga Cwele, has announced a compromise regarding the National ICT Policy White Paper.

The policy was released in September 2016 and stated that radio frequency spectrum must be assigned to a national wireless open access network (WOAN).

It also suggested that radio frequency licenses would be taken away from Vodacom, MTN, Cell C, and Telkom to incorporate their capacity into the WOAN.

Operators, who have invested billions into their networks, stated that the proposal was incredibly damaging to the industry.

In the lead up to Cwele’s Budget Vote speech in Parliament today, the department has announced a compromise.

“There is general agreement with the thrust of the policy and the need to implement it without delay. Most of the discussions focus on how best we implement the WOAN and the allocation of and the return of the high-demand spectrum,” said the department.

The compromise

Cwele said the following approach was agreed to by stakeholders:

  • There may be no urgency to return the current high-demand spectrum from licensees (Vodacom, MTN, Cell C, Telkom, and others) until the end of the current licence period to ensure investment certainty.
  • In return, the licensees committed to buy at least 30% of the existing capacity of WOAN to ensure its viability.
  • A high-level study will be conducted to determine if WOAN will use all the currently-unassigned high-demand spectrum.

The “high-demand spectrum” includes capacity in the 2,600MHz band, and in digital dividend bands – with a focus on the 800MHz bands.

Cwele said the study into how much spectrum the WOAN will need was agreed to in view of current levels of investment in 4G networks.

“If there will be remaining spectrum it will be licenced to operators with rural coverage obligations. In such case, the licensees further committed to buy at least 50% of WOAN capacity,” said Cwele.

“It is important to realise that without WOAN, the new entrants, particularly black entrepreneurs and SMMEs, will find it impossible to enter this industry.”

“In the next few months, we intend to finalise the implementation plan.”

Update – Telkom approves of plan

Telkom has stated that it welcomes the study proposed by Cwele to investigate the amount of spectrum to be used by the WOAN.

“We are, however, wary of proposals to allocate the unused spectrum through an auction as this will further entrench the current duopoly and may have a negative effect on the consumer,” said Telkom.

“The minister and the regulator must recognise that Telkom does not have the sub-1GHz spectrum, which inhibits our ability to compete fairly. This needs to be addressed as a matter of urgency.”

Now read: These are the networks which should get more 4G spectrum in South Africa

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South African operators won’t have to give spectrum back, yet – Minister