South Africa’s plans to let networks trade wireless capacity

South Africa has again emphasised plans to establish a secondary market for spectrum as part of the Next Generation Radio Frequency Spectrum policy. However, the Cabinet-approved policy has still not yet been made public.

The confirmation comes from National Treasury and The Presidency’s phase one review of Operation Vulindlela.

It stated that government plans to establish the spectrum market and auction additional high-demand spectrum for mobile networks.

The Next Generation Radio Frequency Spectrum Policy, introduced in 2022 and approved by President Cyril Ramaphosa’s Cabinet at the end of November 2023, promises to lay the foundation for this.

When the Cabinet approved it, one stated goal of the policy was to end a spectrum regime that only benefits larger industry players.

Therefore, it aims to promote small and medium-sized enterprises and foster the emergence of new entrants into the ICT sector.

Around the time the first draft was released, then-communications minister Khumbudzo Ntshavheni emphasised this commitment.

“While we acknowledge that due to limitations in spectrum, it is not possible to license spectrum to all more than 400 ECNS and ECS license holders, of which majority are SMMEs,” Ntshavheni said.

“However, we must continue with measures which will ensure that ultimately SMMEs are included in the ICT sector including on access to spectrum.”

By allowing spectrum trading, SMMEs will be able to enter into sub-letting and sharing arrangements with other mobile network operators.

This is due to the price of acquiring spectrum, setting a high barrier to entry and expansion.

A spectrum auction in March 2022 saw South Africa’s top six mobile network operators spend over R14 billion to acquire highly sought-after radio frequency bands.

MTN and Vodacom spent over R5 billion each.

In addition to spectrum trading and auctions, the policy also promises to give direction for a planned shutdown of South Africa’s 2G and 3G networks.

This was initially scheduled to happen by March 2025 for 3G and June 2024 for 2G.

However, both now have the same deadline: 31 December 2027. The government plans to commence the switch-off on 1 June 2025.

These network shutdowns aim to free up radio frequency spectrum for other uses while migrating South African residents to newer technologies.

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South Africa’s plans to let networks trade wireless capacity