Why spectrum allocation is urgent – And temporary spectrum is not enough

ICASA has postponed the auction for high-demand spectrum in South Africa from December 2020 until “no later than 31 March 2021”.

Additionally, the Invitations to Apply (ITAs) for high-demand spectrum will be published by 30 September 2020 – as opposed to the original date of June 2020.

These delays are due in part to the prioritisation of COVID-19 emergency temporary spectrum to help mobile networks cope with increased demand during the national lockdown.

The authority also noted that it has been “almost inquorate” for nearly three months.

Spectrum is critical

While the allocation of temporary spectrum during the national lockdown has been valuable, it is critical that permanent, high-demand spectrum is allocated to mobile carriers as soon as possible.

According to research by World Wide Worx, mobile networks have noted that the emergency spectrum they received – particularly in the 700-800 MHz bands – is “dirty spectrum.”

This is because this spectrum is degraded by interference, meaning it doesn’t allow for optimal connectivity.

“The 700-800 MHz emergency spectrum can only be used for experimentation and innovation for now,” added MTN.

“Unfortunately, we couldn’t use this emergency spectrum in the areas we expected and wanted to release in because of high-levels of interference from analogue.”

Vodacom echoed this statement.

“One of the biggest challenges is around the usability of the emergency spectrum band we were issued,” said Vodacom.

“We would like to see a complete migration path to getting analogue out of and digital into those bands.”

The importance of low-cost spectrum auction prices

The GSMA published a paper in March which discussed best practices for 5G spectrum allocation.

It noted that when spectrum is held back from the market, commercial services are likely to suffer, and operators may need to overpay at auctions to receive ample spectrum for their needs.

By overpaying, this will result in these networks not being able to invest as much in other areas of their network infrastructure.

“Governments and regulators should avoid inflating 5G spectrum prices, as this risks limiting network investment and driving up the cost of services,” added the GSMA.

“This includes excessive reserve prices or annual fees, limiting spectrum supply (e.g. set-asides), excessive obligations and poor auction design.”

Goldstuck points out that one option, not yet offered by ICASA, is for instalment pricing, allowing operators to pay off the auction fee.

ICASA chairperson Keabetswe Modimoeng said that the auction of this spectrum is one of the most important and potentially contentious regulatory processes they have ever undertaken.

“The delicate nature of the licensing process requires that the Authority exercise added caution to ensure full compliance with all administrative and procedural fairness requirements,” he said.

“It is also of significance that the ultimate outcome of the process receives the buy-in and support from all interested stakeholders.”

For this reason, ICASA has invited representations from stakeholders on the impact of the COVID-19 pandemic on the market and any specific factors which ICASA should take into account before finalizing the ITAs.

“The representations must reach the Authority by end of the business day on 16 September 2020 and must be marked for the attention of Mr Phil Molefe on [email protected] and Ms Fikile Hlongwane on [email protected],” said ICASA.

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Why spectrum allocation is urgent – And temporary spectrum is not enough