More spectrum, lower prices

Vodacom CEO Alan Knott-Craig recently said that one of the best ways to enable his company to reduce prices was to give it more spectrum.

Knott-Craig also said that ICASA should follow a use-it-or-lose-it policy where unused spectrum in the hands of companies such as Sentech was taken back and redistributed to telecoms players who would make the most of this valuable resource.

This view is shared by many telecoms experts who feel that the massive amount of spectrum in the hands of Sentech and Telkom – often unused – is making it difficult for other competing companies to cost-effectively roll out wireless networks and provide broadband services to consumers.

WiMax

There is currently no uniform global licensed spectrum for WiMax, but the WiMax Forum has published licensed spectrum profiles for 2.3GHz, 2.5GHz and 3.5GHz. This sets the standard and it can be expected that WiMax embedded devices will support at least the 2.5GHz and the 3.5GHz bands.

There has been a great deal of hype around WiMax but the technology’s increasing industry support, spectral efficiency and potentially high throughput rates do make it very suitable for last mile broadband access, making WiMax a treasured commodity.

Currently only four players – Telkom, Neotel, Sentech and WBS/iBurst – have WiMax spectrum. Neotel and Telkom each have 56MHz (2 x 26MHz) of 3.5GHz spectrum while Sentech has 28MHz (2×14MHz) of 3.5MHz spectrum.

WBS/iBurst and Sentech have 2.5GHz WiMax spectrum – 20MHz and 50MHz respectively – widely seen as the most suitable to provide broadband services to consumers.

While WBS/iBurst, in partnership with Vodacom, has already rolled out a WiMax network in Gauteng and Cape Town, Sentech’s WiMax spectrum remains mainly unused. 

And considering that Sentech has 50MHz of very valuable 2.5GHz WiMax spectrum (two and a half times more than what ICASA plans to provide new WiMax operators with) in addition to its 56MHz of 3.5GHz spectrum, it is not difficult to see why industry players are unhappy.

How much is enough?

ICASA has recently published guidelines on how it plans to allocate the remaining 126Mhz of spectrum in the 2.6GHz frequency band, but has come under severe criticism from industry players about these guidelines.

The regulator intends to provide six new WiMax players with 20MHz each despite requests from both Intel and industry players to provide operators with at least 30MHz of spectrum each.

At the recent Internetix conference in Johannesburg, Vodacom’s Knott-Craig said that 20MHz of WiMax spectrum was simply not enough to provide a profitable broadband service.

ICASA chairman Paris Mashile defended the regulator’s decision, saying that a full consultation process was followed after which a decision was made to ensure the optimal allocation of spectrum.

Mashile said that with 20MHz of spectrum one can produce data rates of up to 75Mbps and added that operators can do compression, modulation and other things to make sure the spectrum is used efficiently.

ICASA’s requirement of 51% black ownership of companies who apply for WiMax spectrum has also been criticized widely with commentators saying that it is an unnecessary hurdle in the drive to liberalize the local telecoms environment and encourage broadband rollout.

The most valuable spectrum may however not be in the WiMax bands, but rather the 700MHz to 850MHz band. The lower frequency means far better coverage per base station and better in-building penetration. 

This frequency band, along with 450MHz and 2.6GHz, has been assigned to Long Term Evolution (LTE) and a future battle can be expected among operators to get their hands on this valuable resource.

Other bands also important

While WiMax’s suitability for broadband provisioning means that anything surrounding the technology – including spectrum allocation – receives a great deal of media exposure, other frequency spectrum bands can also help companies in their network rollout.

This is the most notable in the cellular space where delays in the delivery of transmission links by Telkom and the high cost associated with these links are severely hampering Vodacom and MTN’s broadband rollout.

Both cellular players have indicated that Telkom’s poor service delivery is stopping them from launching higher speed services, a situation that could possibly be alleviated if they had adequate spectrum to self provide such transmission links wirelessly.

The lack of microwave frequency in various frequency bands, including 8GHz-12GHz, 12GHz-18GHz and 18GHz-40GHz, are not doing the cellular providers any favours in their wireless network provisioning.

Adequate microwave frequencies are typically provided to cellular providers internationally to ensure cost effective network rollout, and following international trends will mean that Vodacom, MTN and Cell C will most likely become less reliant on wired links from Telkom for their transmission needs.

Using microwave as a backhaul basically means that a provider needs 2x28MHz bandwidth to obtain a STM1 155 Mb/s throughput link. New technology that uses adaptive modulation can double this bit rate but this only happens under very good signal to noise ratio conditions.

To meet their network expansion bandwidth requirements providers like MTN and Vodacom need numerous 2x28MHz channels in bands ranging from lower frequencies like 7GHz and 10.5GHz to higher frequencies like 26GHz and 38GHz.

Industry experts generally agree that frequency allocations for both backhaul and primary network access are problematic. Spectrum is a scarce commodity and should be managed and used effectively.

“It always surprises me how some organisations that have made no efficient use of their frequency allocations are being allotted a glut of such a scarce commodity,  while others, who have utilised their allocation highly effectively, have to fight continuously for additional spectrum,” said one industry expert.

Again much of the microwave spectrum sits in the hands of Sentech, Telkom and Neotel, often unused. ICASA may do well to implement a use-it-or-lose-it policy on spectrum and strictly enforce it. 

Spectrum has become a very valuable resource in the modern telecommunications market which is increasingly relying on wireless infrastructure, and with operators sitting on unused spectrum the regulator is doing the country a tremendous disservice.

Spectrum allocation – give your views