The long-term shift in power between the OTT players and mobile operators is a bit like watching a Samuri wrestling bout. They move round each other threateningly, making loud grunts, then hang on to each other for a while before one falls over.
As TV White Spaces goes commercial, some of the mobile operators have got the jitters again.
Microsoft and Google have been pioneering TV White Spaces technology on an increasingly large-scale. Microsoft now has 27 different projects around the world, all of which have “different flavors and different reasons for the concept,” according to Fernando de Sousa, General Manager of Africa Initiatives.
Some have a commercial purpose, others do not.
There are nine projects in Africa in the following countries: Morocco, Cote d’Ivoire, Ghana, Namibia, Botswana, South Africa, Malawi, Tanzania and Kenya.
Of these, four have got approval for a standard ISP licences: Ghana, Namibia, South Africa and Malawi. The South African one is waiting for approval but the regulator Icasa has said they can operate while they get a change ratified that will take them 18 months.
It does not stop there as there are continuing expressions of interest and new projects being formulated including in Egypt, Tunisia, Nigeria, Zimbabwe and Rwanda. Getting a project off the ground always involves a regulatory conversation and as a minimum there needs to be regulatory approval for a pilot to operate.
But de Sousa said that they want each project to transition into being a business. “As Microsoft, we’ve taken a definitive business model view…and have a business model opportunity…It’s an opportunity for African businesses and we want an ecosystem to develop.”
So I ask him what’s happening in Kenya where the licence for the project was not forthcoming?
“Kenya has been challenge at the regulatory level. We’ve been caught in an election process. The old Government moved in one direction and the new Government’s priorities have changed, they’re not focused on TV White Spaces. I believe we’ll get the full licence but it will take a little longer,” de Sousa said.
What de Sousa is far too diplomatic to say is that Safaricom saw TV White Spaces as a threat in the new data space and effectively vetoed the new licence through its opposition: “We need to engage much more closely on a strategic level with Safaricom. I think we appeared to be adopting a confrontational approach.”
One of the latest of the TV White Spaces projects is Ghana’s Spectra Wireless which has focused its business on serving university students.
Catch the next generation of Internet users and you stand a strong chance of having them long into the future: “Spectra Wireless is developing business opportunities in Nigeria, Cote d’Ivoire and Cameroon. It’s built a business model as a tertiary education focused product. We’re encouraging them to be successful in that space but they are ready to look at other opportunities.”
The new network offers students affordable, high speed internet bundles and zero-interest loans in partnership with UT Bank for the purchase of eligible internet-enabled Microsoft, Lenovo, Dell and HP devices.
Data packages start from GHS2 (USD0.6) for 24 hours access. At launch, it had 5,800 unique devices registered against a student population of 8,500.
The campus chosen is the Polytechnic at Koforidu, which is about an hour and half drive north of the capital Accra: “We wanted to be out in a rural space so that we could appeal to Government and regulators (with the argument) that these areas are not currently covered. Also Spectra wanted a manageable campus. Students away from Accra have a very different economic profile and we wanted to make sure we got it to work in that environment. It has to work sustainably at low cost.”
So what has the mobile operators’ attitude been to TV White Spaces?
“We’ve sat down with all the operators, particularly those with large country presences. It ranges from absolute fear and denial to wanting to engage in partnerships. And I have to say that’s the same right across the world,” de Sousa said.
De Sousa makes three arguments that he thinks should be persuasive for mobile operators. The biggest one is strategic and that as an OTT player: “Microsoft is not going into competition with them… We want to be able to deliver our services and we’re not going into carrier services.”
This may be true for Microsoft but certainly in the USA Google seems to have lost patience with the mobile operators and is building out fibre coverage. However, aside from drone talk, nothing similar seems planned for Africa but the suspicion hangs in the air.
His two other arguments to mobile operators are operational.
He says that TV White Spaces are able to go into areas that are not currently commercial for mobile operators. They can work with that extension of coverage to offer their own data services.
On this one, the mobile operators want to have their cake and eat it. There are areas that are not currently commercially addressable for them but they do not want someone else demonstrating that they can make them work.
And to repeat what I’ve already said several times during 2014, regulators need to remove coverage obligations from existing mobile licence holders and then allow both the mobile operators and any other operators to get licences for uncovered areas.
Progress in extending coverage to these areas has thus far been glacial and the only way to speed things up is to see whether others can succeed where the mobile operators have been reluctant to go.
The second argument for mobile operators may prove more persuasive to them: “They can use TV White Spaces as an offload mechanism for non-profitable traffic and focus on the profitable parts of 3G and 4G. Video is not very profitable so pass it on to another network.”
Africa’s regulators need to adopt a progressive attitude to two things that are interlinked: the introduction of new technologies and the extension of both voice and data coverage. TV White Spaces needs to be given the regulatory space to show that it can deliver on both counts.