The biggest loser — South Africa’s cellphone network users

Vodacom says it is extremely disappointing that the fourth attempt by the Independent Communications Authority of South Africa (Icasa) to licence high-demand spectrum has failed.

The mobile network operator said it was especially disappointing considering that it did its utmost to try and find a middle ground so that the spectrum auction could progress.

“Unfortunately, the biggest loser here is the South African consumer,” said Vodacom spokesperson Byron Kennedy.

Vodacom’s statements come after Icasa announced that it could not reach an out-of-court settlement with Telkom, E-tv, and MTN regarding their objections to its spectrum auction process.

Radio frequency spectrum is the raw capacity used by wireless networks such as Vodacom, MTN, Telkom, Cell C, and Rain.

South Africa’s mobile network operators have said that getting access to additional spectrum would allow them to offer better services, faster speeds, and reduced prices.

In addition to licensing highly sought-after radio frequency spectrum, Icasa was also hoping to licence the controversial national wholesale open-access network (WOAN).

Icasa said it would consent to an order setting aside its decision to publish the Invitations to Apply (ITAs) to avoid long, drawn-out litigation.

It plans to do this by 15 September, Icasa said.

Dr Keabetswe Modimoeng, ICASA Executive Chair
Dr Keabetswe Modimoeng, ICASA Executive Chair

With the ITAs set aside, Icasa said it must reconsider the licensing of the spectrum and the WOAN.

It said it would also consider licensing the WOAN through a separate process from the spectrum auction.

Icasa said it would consider the issues with the spectrum auction raised by the litigants. It specifically named the completion of the broadcasting digital migration process and assessing competition in the ICT sector.

These are two of the major issues that Telkom raised in its legal action against the regulator.

MTN objected that it and Vodacom, as “Tier 1 Operators”, were being excluded from the first round of the auction.

MTN said it was concerned it would miss out on getting the spectrum it needs for its 4G and 5G networks.

It also argued that South Africa’s fiscus would miss out because MTN would be willing to bid far higher for the spectrum it needs than smaller players.

Vodacom

Kennedy said that the benefits of additional spectrum were illustrated when Icasa released some temporarily as part of the National State of Disaster due to the Covid–19 pandemic.

“Temporary spectrum has enabled customers to enjoy wider coverage and faster speeds as they have worked from home and accessed educational and entertainment content online since March 2020,” stated Kennedy.

He said that it would be detrimental to consumers if Icasa took back the temporary spectrum before the end of the state of disaster.

“Given that South Africa remains in a National State of Disaster, and that the assignment of high demand spectrum will be further delayed, we call on the regulator to reconsider its decision to end temporary spectrum assignments at the end of November.”

Kennedy encouraged all industry players to join Vodacom in working with government to find a solution that results in all mobile consumers finally experiencing the full benefit of South Africa’s national spectrum assets.

“This has the potential to have an unprecedented positive impact on our fragile economy,” said Kennedy.

Sipho Maseko, outgoing Telkom CEO

Telkom praised Icasa for its decision to consent to the order to have its ITAs set aside.

It also said that Icasa’s decision is an admission that the process was “irredeemably flawed”.

MTN said it is still studying Icasa’s announcement but, in an earlier statement, it agreed with Vodacom that the regulator should extend their temporary spectrum assignments.

The network warned that Icasa’s plan to take back the temporary spectrum before it was permanently assigned would result in a kind of “digital load-shedding”.

Rain declined to comment until the outcome of the court hearing on 15 September, where Icasa said it would consent to the order to have its ITAs set aside.

Zahir Williams
Zahir Williams, Cell C Chief Legal Officer

Cell C agreed with Vodacom and MTN that there are compelling reasons for spectrum to be issued on an urgent basis.

“Firstly, the Covid–19 pandemic has a profound impact on the consumption of data by business and consumers,” said Cell C chief legal officer Zahir Williams.

“The increased demand for data places a huge strain on networks with the limited spectrum available. Additional spectrum is urgently required to support networks to meet growing demand for data.”

Secondly, Williams said that much had been said about economic development opportunities arising from the Fourth Industrial Revolution.

“We need to keep in mind that additional spectrum is key to enabling such development,” he said.

“When more spectrum is allocated to the established MNOs, this should facilitate better prospects for active spectrum sharing, and improved efficiencies will filter down to their wholesale customers and consumers at large,” stated Williams.

“We look forward to a non-contentious, efficient and transparent process that will timeously lead to the assignment of high demand spectrum.”

Regarding the impact of the delayed spectrum auction, together with Icasa’s plan to reclaim the temporary spectrum at the end of
November, Cell C said its customers would be insulated from the effects.

“Based on our new operating model, we are becoming the biggest buyers of capacity from our infrastructure partners,” Williams stated.

“All our capacity requirements have been built into agreements with our infrastructure partners.”


Now read: South Africa’s digital Covid–19 vaccine passport launching this month

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The biggest loser — South Africa’s cellphone network users