“Telkom is holding South Africa to ransom”

Human settlements minister Mmamoloko Kubayi has accused partially state-owned Telkom of holding South Africa to ransom through its court actions over the country’s high-demand spectrum auction.

This follows communications minister Khumbudzo Ntshavheni’s attempts to convince all parties to allow the auction to happen in March.

“From where we are sitting, she [Ntshavheni] is on track, and we are hoping that Telkom does not continue to hold the country at ransom,” said Kubayi in an interview with Business Times.

“I think it’s far too long, the sector has been holding the country at ransom. At times you get confused … what is it they are looking for?”

Kubayi added that the country has already been affected significantly by the lack of high-demand spectrum, and it is important to fast track the auction process.

Radio frequency spectrum is the raw network capacity cellular networks use to communicate between their towers and mobile devices. In simple terms, cellular technology works on similar high-level principles as AM and FM radio, and TV broadcasting.

“You can’t have companies blocking the country’s growth,” Kubayi said.

“Spectrum is needed in this country. We have been surpassed by countries that should not have passed us.”

Kubayi stated that the appropriate parties are in negotiations and hoped these discussions would not ultimately revert to court action.

Khumbudzo Ntshavheni
Khumbudzo Ntshavheni, Minister of Communications and Digital Technologies

Together with E-tv owner eMedia, Telkom sits at the centre of the controversy over South Africa’s high-demand spectrum auction.

Telkom has argued that some of the valuable sub-1GHz spectrum being auctioned is still occupied by old analogue TV signals, which would make any investment into network infrastructure that uses this frequency extremely risky.

For example, Telkom’s head of network planning and engineering Lebo Masalesa said that when Telkom tried to roll out extra network capacity in Bloemfontein, the spectrum industry regulator Icasa had claimed was available turned out to suffer significant interference.

One reason for this issue, Masalesa explained, could be that many South Africans have erected their own repeater sites to counter poor TV signals.

“We suspect it could be a case that Sentech does not have a view of all the repeaters out there and are unsure if these repeaters are deployed with their permission,” Masalesa told MyBroadband.

The issue is fundamental to Telkom since it doesn’t currently have sub-1GHz spectrum, which puts it at a significant disadvantage compared to its competitors.

Therefore, the spectrum auction is a major opportunity for Telkom to gain access to this lower-frequency band it desperately wants.

This is why it has asked the court to force Icasa to implement remedies that will compensate Telkom if it cannot use any of the spectrum it has acquired during the auction.

Notably, Telkom has withdrawn the first part of its court application — an urgent interdict to halt the auction.

However, it has said that Icasa should think carefully about whether going ahead with the auction makes sense given the implications if the rest of Telkom’s application is upheld by the court.

Telkom map of interference in sub-1GHz “digital dividend” frequency bands. Auction batches are represented by coloured areas. Pins represent sites where interference was detected.

In addition to the problem of old analogue TV broadcasting frequencies still being occupied, Telkom also raised several other issues with industry regulator Icasa’s spectrum auction.

A significant concern is that E-tv owner eMedia has a pending court case against the communications minister and Icasa over the switch-off of analogue TV signals that the High Court will only hear in mid-March — after the spectrum auction is set to conclude.

Telkom also maintains that Icasa has not adequately considered the impact on competition the auction will have in South Africa’s telecommunications sector.

It has baulked at specific restrictions that Icasa wants to use, such as uniform caps on the amount spectrum each operator can hold. This is a major disadvantage for Telkom, which already has a substantial higher-frequency spectrum.

Telkom has also taken issue with Icasa’s delay in licensing a national wireless open-access network (WOAN).

By not doing this at the same time as the rest of the spectrum auction, Telkom said it creates too much uncertainty in the models operators use to value spectrum and develop a bidding strategy.

Now read: Spectrum trading will make all Icasa’s problems disappear

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“Telkom is holding South Africa to ransom”