How South Africa’s open-access mobile network will work

South Africa has committed to the national WOAN by ensuring it features heavily in the spectrum auction that will take place next year.

The WOAN is controversial in South Africa as many believe it is unnecessary because the spectrum allocated to it could just as easily be used to improve the networks of existing operators.

While the WOAN has become a popular buzzword within the telecoms industry, those who are not deeply entrenched may not understand what the WOAN is.

We have therefore explained what the WOAN is below.

What is a WOAN

WOAN is an acronym for Wholesale Open Access Network and refers to a large network that is available across the country to mobile operators so that they do not need to build their own infrastructure.

The touted benefits of the WOAN are that it allows more competition in the industry as new or existing mobile operators do not need to spend billions of rands just to compete with the current giants of mobile telecommunications – MTN and Vodacom.

As a result, Telkom has historically been a major proponent of the WOAN.

In 2017, Telkom justified the WOAN as follows:

Telkom is of the view that a WOAN is necessary to level the playing field in mobile communications and increase competition by allowing new players to enter the market.

A WOAN will be the most economically compelling approach to mobile network operators (MNOs) for meeting future demand, subject thereto that all unassigned high demand spectrum (HDS) is assigned to the WOAN and that the WOAN has spectrum in both the low bands (for rural coverage, in building penetration) and higher bands (for capacity).

By extending mobile broadband access to unserved and poorly served regions and enhancing broadband competition, it will further bring down price.

While in the above, Telkom suggests “all unassigned high demand spectrum” be assigned to the WOAN, this is not what is going to happen.

Instead, the WOAN will be allocated a portion of all spectrum auctioned next year, while there are additional measures that require networks which purchase spectrum in the auction to allocate a certain percentage of this spectrum to the WOAN.

These obligations are as follows:

  • The applicants that are to be assigned the radio frequency spectrum through this process shall procure a minimum of 30% national capacity from the WOAN collectively as soon as the WOAN is operational for a period of five years.
  • The 30% national capacity to be procured from the WOAN will be shared proportionally to the amount of the spectrum acquired from the Auction amongst the successful licensees.
  • The 30% national capacity uptake in the WOAN will be imposed on all successful applicants as licence terms and conditions in accordance with regulation 7(e) of the Radio Frequency Spectrum Regulations, 2015 as amended.

Criticism of the WOAN

The idea of universally accessible network infrastructure sounds great as it theoretically allows for increased competition, which would hypothetically drive data costs down.

In practice, however, WOANs have many critics.

In a 2017 whitepaper on WOANs, the GSMA was heavily critical of the WOAN model and said it has not historically been successful.

“Research shows that of five countries originally considering this option, only one, Rwanda, has rolled out a network. Although it appears the network hasn’t delivered on what was promised,” said the GSMA.

“The lessons from these countries should serve as examples to other countries contemplating this route. They highlight the real challenges of SWNs and WOANs and are a wake-up call to those  regulators that look to them as an alternative to tried-and-true approaches to network deployment.”

It noted in the paper that those who are proponents of WOAN models “often gloss over the fact that in order to be built, the SWN or WOAN require significant public subsidies and other forms of support which are typically not available to competing network operators.”

It said that instead of a WOAN model, traditional network competition has proven to deliver mobile network coverage, and in areas where building networks is not economically beneficial for these entities, there are other options – such as voluntary network sharing.

It also provided the following summary of how WOAN rollout had fared across heh world as of July 2017 – years after many of these WOANs were meant to be active.

GSMA WOAN

The GSMA reiterated its stance on WOANs late last year, when it said in a case study that WOANs sound better in theory than they are in practice.

“Citizens are promised better coverage, more competition, and as a result, more affordable prices. However, turning this vision into a working reality with an impact that goes beyond what traditional networks can achieve is difficult,” said the GSMA.

“They [failed WOAN projects] are a wakeup call to those regulators that look to them as an alternative to tried-and-true approaches to network deployment.”

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How South Africa’s open-access mobile network will work