The worst-case scenario for the upcoming spectrum allocation by ICASA sees nobody winning in the medium to long-term, with just one or two entities gaining financially in the short term.
This is why it is crucial to ensure that South Africa’s spectrum allocation strategy is well thought-out, said Dr Martyn Roetter of BMIT, who published a whitepaper on the topic entitled Spectrum Policy for the Gs.
The whitepaper discusses how South Africa should approach spectrum allocation to the WOAN and network operators, highlighting that delays to spectrum allocation could end up being a blessing in disguise.
“The delay in awarding high demand spectrum licences, and ICASA’s decision to include the 3.5GHz band in the future ITA open the opportunity for the country to coordinate the award not only of high demand spectrum in the 700MHz, 800MHz, and 2,600MHz bands, but also of other bands envisaged in many countries for 5G deployments,” said Roetter.
Roetter said that South Africa will need to consider how best to balance the trade-off between monetising the allocation of spectrum – providing short-term benefits to the treasury – and the long-term economic advantages of making spectrum available cheaply.
Roetter used the examples of China and India, which have adopted drastically different strategies for the allocation of high-value spectrum.
China has already allocated spectrum in the mid-band, including the 2.6GHz, 3.5GHz and 4.9GHz ranges, at no cost to its four state-owned 5G operators.
“The determining driver behind this decision is the country’s goal of establishing global leadership in the exploitation of 5G technology, as one key component in the fulfilment of its overall economic and technological ambitions,” said Roetter.
In contrast, India has controversially proposed selling blocks of 5G spectrum at prices substantially higher than in other Asian markets.
According to Roetter, this may deter some operators from participating in the auction for several bands, including 700MHz, 800MHz, 1,800MHz, 2.3GHz, and 3.4-3.6GHz.
Roetter also argued that India’s strategy downplays the possibility that high spectrum fees could reduce licence holders’ abilities to invest in “actual and ultimately productive” network deployments.
“China and India represent two extreme positions,” said Roetter.
“The former is driven by national economic and geopolitical policy and reliance on state-owned entities, while the regulator in the latter, although relying mainly on private sector players in the market, is nevertheless inclined to view spectrum awards as a valuable or even essential contributor to the Treasury.”
The importance of mid-band frequency
According to Roetter, South Africa will need to balance these two attitudes towards spectrum allocation to ensure that the allocation is beneficial across the board.
“South Africa faces comparably complex choices and tradeoffs in reaching its decisions regarding spectrum awards, both for a new WOAN and for existing and potentially new network operators, as well as for structuring the ITA processes it will establish to make these awards,” said Roeter.
“It will be critical to coordinate policy goals with how spectrum is allocated, forging a sensible balance between interests that are complementary in some respects while they conflict in others.”
“Otherwise the dissension and contradictions between the hopes for the economy and goals for society that are riding upon wireless networks, and the ability to deploy these networks efficiently, economically and productively to fulfil these hopes and achieve these goals, will persist.”
Roetter said that prioritising mid-band frequencies such as 3.5GHz for 5G deployments makes sense and aligns with Europe and Asia’s strategies.
However, it is important to be patient before prioritising higher spectrum bands.
“Decisions about high bands should reflect the outcome of the imminent World Radiocommunication Conference (WRC-19) scheduled to start in late October, at which among other items global and regional allocations to terrestrial mobile services in these bands will be made,” added Roetter.