The department of communications & digital technologies will intervene in the standoff between mobile network companies and the telecoms regulator over the expiry of temporary spectrum in an attempt to find “an amicable solution”.
In April last year, after SA went into hard lockdown, the Independent Communications Authority of SA (Icasa) issued temporary spectrum, a radio frequency used for the rollout and access of super-fast internet.
This was done in anticipation of high demand for internet access as more people worked from home and schools taught online.
The temporary agreement was renewed twice, with the final deadline being the end of August. The operators were given three months, until the end of next month, to hand back the temporary spectrum to Icasa.
But this month, Telkom, joined by MTN, filed court papers in a bid to stop Icasa from withdrawing all the temporary spectrum, arguing that the country is still under state of disaster regulations and warning that if the temporary arrangement is terminated it will disadvantage consumers as there will be network interruptions.
Communications department spokesperson Tlali Tlali said this week: “The minister [Khumbudzo Ntshavheni] is engaging with all parties to find an amicable solution in the matter.”
He added that “the department’s view is that the courts should be an option of last resort to be explored only in the event all other efforts do not yield desirable outcomes”.
Icasa said its decision to withdraw the temporary spectrum was informed by the decline in Covid infections, the gradual reopening of the economy and steady progress in the vaccination programme.
It said there is a need to focus efforts on the permanent licensing of spectrum, which it aims to complete by the end of the first quarter next year. The latest deadline came after operators including Telkom successfully challenged the regulator’s licensing process in court, resulting in Icasa having to restart the process. The regulator was hoping to raise as much as R8bn on the auction.
President Cyril Ramaphosa and businesses have been calling on the regulator to expedite the permanent licensing of spectrum as it is critical to SA’s economic growth.
This will disable competition. This is a very serious matter
— Brandon Leigh, Rain CEO
Faster access to the internet will attract new investment and may also stimulate the growth of start-ups. During lockdown, there was a spike in the adoption of e-commerce and delivery services, and mobile network operators also allowed free access to certain websites, such as education.
Spectrum is a finite resource that is needed to accelerate the rollout of super-fast technologies and bridge the digital divide by offering quality services to the rural areas.
It comes in different bands and is used in the provision of services in broadcasting‚ cellphone networks‚ fixed telecommunications and defence and aviation. Some spectrum band is for coverage and the other for capacity.
Mobile network operators are in desperate need of the spectrum allocation in the 700MHz-800MHz UHF band, which offers superior geographic coverage. This will be a clincher in connecting rural communities.
This band is now occupied by broadcasters who are migrating from an analogue platform to digital. This process has also been delayed by more than five years, after SA missed the June 2015 deadline set by the International Telecommunications Union to switch off the analogue signal. This also contributed to the delay in spectrum allocation.
Ntshavheni has set a target of five months to complete the national migration to digital. If this happens, it will coincide with Icasa’s plans to also finalise spectrum licensing by the end of March 2022.
Dobek Pater, director for business development at research firm Africa Analysis, said the biggest threat to spectrum allocation is broadcasters who are concerned about losing viewers should the government switch off the analogue systems while consumers do not have the set-top boxes required to convert the analogue signal to digital.
They might not let go of their spectrum until such a time that households that rely on analogue have access to set-top boxes, Pater said.
Telkom and MTN’s move to challenge Icasa’s temporary licence termination was met with fierce criticism from Rain, which is partly owned by Patrice Motsepe’s African Rainbow Capital. Rain provides internet data services.
The company's CEO, Brandon Leigh, said if the temporary arrangement is allowed to continue, it will remove Rain as a competitor, because “we will not get a chance to apply for spectrum that will enable Rain to have wider coverage. It effectively means the temporary licence will be converted to permanent; there won’t be an auction”.
“This will disable competition. This is a very serious matter,” he said.
Pater said if the auction is planned for the next six months, “I am not sure if there is merit in trying to withdraw it now — might as well continue with it until the spectrum auction takes place.”
Cell C’s position at the time was that it had sufficient capacity on its existing network as well as its virtual network to meet customer demand
— Cell C CEO Douglas Craigie Stevenson
He said even though the situation has improved, the state of disaster is still in place and for as long this continues, operators need the spectrum.
Leigh said: “Our concern is that if Telkom, MTN and Vodacom are successful in this application then a temporary, unfair, uncompetitive, opaque assignment process will effectively replace the auction and kill the WOAN.”
WOAN refers to the wholesale open access network that is aimed at bringing new entrants to the market.
Leigh said Rain is opposing the temporary spectrum remaining in place because of how it was assigned — on an emergency basis, with no consideration given to the long-term, competitive effects on the telecommunications industry.
It was assigned in “good faith” with the understanding that it was temporary in nature and would need to be returned, he said. The framework used for the application and assignment of temporary spectrum was not through a robust, formal licensing process.
Leigh said applicants were meant to only apply for spectrum they could deploy immediately to alleviate the rapid increase in demand brought about by the unique circumstances at the start of the pandemic.
The assignment was intended to be used only on existing compatible equipment and not to build new 4G or 5G networks 18 months later as the operators have done, he added..
“Unfortunately, no audits were done at the time to verify if the applicants had the necessary equipment. Rain followed the process and only applied for the spectrum we could immediately deploy and not for ‘future’ spectrum,' Leigh said.
“If we knew that Icasa would allow applicants to build new networks and use the spectrum as a stop gap until the auction, then we would definitely have applied for additional spectrum.”
Cell C, which is staying away from the current legal challenge, did not apply for the temporary licence.
“Cell C’s position at the time was that it had sufficient capacity on its existing network as well as its virtual network to meet customer demand,” said CEO Douglas Craigie Stevenson.
Leigh said the “market has been misled to what extent the temporary spectrum is being used and hence exaggerated the impact of its removal”.
According to Leigh, the number of sites that are using the temporary spectrum is small in comparison to those using the permanent spectrum. This is due to operators not having the investment certainty that they require to commit the large sums needed to deploy this spectrum widely to the benefit of all consumers.
“In some cases, specific temporary spectrum assigned to operators is not being used at all, or on a very small number of sites. Such temporary spectrum should be returned or shared so that it can be assigned to others who need it and will put it to good use.”
Valencia Risaba, chief corporate affairs officer for Liquid Intelligent Technologies SA, said if Icasa took back the spectrum it was allocated the company would try to mitigate any impact, but that delays in allocating spectrum had been a significant obstacle to SA’s broadband ambitions.
