Vodacom recently demonstrated Africa’s first LTE network deployment, with real world download speeds of between 70 Mbps and 80 Mbps. This network is fully integrated into Vodacom’s current 3G\/HSDPA network.<\/p>\n
According to Vodacom they are basically ready to start rolling out LTE, but the main issue holding back a new LTE network rollout is spectrum. And this is where it becomes challenging.<\/p>\n
ICASA lays down the gauntlet<\/strong><\/p>\n The Independent Communications Authority of South Africa (ICASA) recently released regulations on how it will grant radio frequency spectrum licenses for competing applications or instances where there is insufficient spectrum available to accommodate demand.<\/p>\n ICASA has various requirements for applicants to qualify for spectrum, including that a company must have 30% direct ownership by Historically Disadvantaged Individuals (HDI) and may not have any shareholding in a company which has spectrum in the band which is applied for.<\/p>\n ICASA further requires 2.6 GHz licensees to achieve population coverage of 50% within two years of being granted spectrum. And this is where the regulator may have been over-ambitious.<\/p>\n Unachievable goal?<\/strong><\/p>\n According to Vodacom CEO Pieter Uys an operator rolling out a 2.6 GHz LTE network will need between 4,000 and 5,000 sites to achieve 50% population coverage. <\/p>\n Considering that it took Vodacom nearly 5 years to build 3,400 3G\/HSDPA sites, it is virtually impossible to build a larger network in less than half the time.<\/p>\n There are numerous time consuming facets to rolling out a new network, including network planning, high site acquisition, environmental approval and installing fibre transmission links. <\/p>\n Each of these issues can take months, if not years, to complete which means that it is simply not feasible to impose 50% population coverage on spectrum licensees within two years. While it might be difficult for established networks, such as Vodacom and MTN, to achieve this ambitious target, it will be impossible for any new entrant starting from scratch.<\/p>\n ICASA’s proposal may in fact have the undesired effect of compelling some companies to promise the world – although they know it is unachievable – and then rewarding them with spectrum despite their unachievable undertaking. South Africa can ill afford wasting another couple of years with spectrum unused as has been the case in the past.<\/p>\n Other considerations<\/strong><\/p>\n There has also been widespread criticism of the fact that ICASA does not seem to value the fact that the needs of LTE applicants are best served through at least 2 x 20 MHz (FDD) rather than a single block of 30 MHz (TDD, typically used for WiMAX). <\/p>\n The current allocation of spectrum in the 2.6 GHz band means that ICASA will have to re-allocate Sentech and WBS’s spectrum to accommodate operators that favour LTE rollouts. But it’s not clear if the regulator has thought through the best usage of the band for both FDD and TDD networks.<\/p>\n In addition, just allocating available spectrum in 30MHz blocks, ICASA will ensure a non-standard usage of the 2.6 band which will lead to difficult and costly deployment as South Africa will not be able to leverage international standards and volume pricing.<\/p>\n One industry expert further feels that 30 MHz, even if it is handed out in two blocks of 15 MHz, is simply not enough for future LTE and ultimately 4G LTE Advanced purposes. It therefore seems ICASA is favouring WiMAX over LTE, against international indications that LTE will dominate wireless broadband in the future.<\/p>\n Winners and losers<\/strong><\/p>\n ICASA’s 50% population coverage requirement effectively disqualifies anyone apart from MTN and Vodacom (although it may well be impossible to achieve as previously stated). No other telecoms players currently have both the network coverage and funds to roll out such an extensive network.<\/p>\n Giving valuable 2.6 GHz spectrum to a smaller player is also risky as they may not be able to fulfill the assurances made in a business proposal. Others are however of the opinion that smaller players should in fact be the only recipients of spectrum.<\/p>\n According to Siyabonga Madyibi, Regulatory Director at Internet Solutions, the objective of allocating additional spectrum in the 2.6 GHz and 3.5 GHz bands has always been to encourage more equitable distribution of spectrum which would in turn create more competition.<\/p>\n There do not seem to be any easy answers to the 2.6 GHz spectrum debate, but the current situation seems to suggest that ICASA should ensure that FDD\/LTE applicant’s needs are catered for and that they set more realistic network rollout targets for licensees.<\/p>\n