Short notice for new law to take back Vodacom and MTN spectrum

Vodacom has requested more time to comment on a proposed Electronic Communications Act Amendment Bill that was recently approved by Cabinet.

The Minister of Telecommunications and Postal Services, Siyabonga Cwele, has given stakeholders 30 days to comment on the Bill.

The Bill is intended to help implement the ICT Policy White Paper, which has caused controversy.

The paper stipulated that new spectrum suitable for cellular networks would go to a national wireless open access network (WOAN). Spectrum currently assigned to mobile operators would be taken back and given to the WOAN.

After deliberations between Cwele and stakeholders like Vodacom, a compromise was reached.

Operators would keep their spectrum and be in the running for “high-demand spectrum” in the 2,600MHz and 800MHz bands yet to be licensed.

In return, the operators committed to buy at least 30% of the capacity on the WOAN. Rural coverage obligations and 50% capacity purchase on the WOAN are requirements if spectrum is allocated to operators.

These outcomes do not appear in the Amendment Bill, however.

Spectrum certainty

Vodacom said while it was encouraged by the ministry’s intent, legal clauses of the latest Bill do not give “full effect to the practical outcomes of the engagement process”.

“Specifically, the bill doesn’t address the industry’s urgent need to access available spectrum. It also doesn’t provide certainty on licensing of current and future spectrum,” said Vodacom.

Vodacom said the Bill is vague on how the WOAN will operate, but that the WOAN must be operational before more spectrum may be provided to industry players.

“Positively, the Bill provides the legislative framework for the rapid deployment of electronic networks and facilities to enable speedy deployment of national broadband infrastructure.”

Vodacom said it supports the transformative objectives of the White Paper, including making broadband more affordable for all, and remains committed to engaging with the ministry to achieve these goals.

It said it will study the Bill and make the necessary submissions.

Duopoly must be addressed

Telkom said it is still studying the implications of potential new legislation on the sector and will participate in the deliberations about the ECA Amendment Bill.

“We will comment fully on the implications of the proposed amendments once we have fully analysed them,” said Telkom.

“In our view, any amendments must address the current uncompetitive structure of the ICT sector, characterized by a duopoly. This duopoly is as a result of past policy and regulatory interventions which require redress.”

Minister will keep data prices high

MTN said the risks associated with the Bill are extensive and significant.

“This Bill will discourage investment in the sector. A slowdown in capital investment in our mobile networks will degrade the service and quality of the networks,” said MTN.

“This will have serious and unintended consequences, including the hindering of economic growth with a negative impact on job creation.”

It said the Bill does not address the “single biggest issue” facing South Africa’s telecommunications industry – the spectrum crunch.

Withholding spectrum will see networks scale back plans for continued growth into rural areas, said MTN.

It will have no choice but to re-farm its current spectrum and densify its networks, which will incur more costs.

“As a consequence of this, data costs will not be driven down, with the impact being worst felt by South Africa’s most economically-marginalised communities,” said MTN.

It appealed to the government to adopt the proposed “hybrid model” that was produced after deliberations, stating that the new Bill “deviates substantially from that proposal”.

Now read: South Africa’s wholesale mobile network is a terrible idea – GSMA

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Short notice for new law to take back Vodacom and MTN spectrum