South Africa: Communications Dept pushes for policy allowing them to dictate spectrum pricing
13 March 2020
This would then allow the regulator to play a role in determining what prices all licensed players will pay as opposed to having the regulator license spectrum to one dominant player.
The Department of Communications and Digital Technologies on Wednesday presented cabinet with an information and communications technology (ICT) white paper featuring proposals related to the expected release of more broadband spectrum, as well as suggestions on how to combat any monopolisation that may arise as a result.
This after the department took a decision in 2016 that the ICT market could no longer be left in its current state.
Speaking on behalf of the department, Director-General Robert Nkuna vowed that they were committed to pushing for universal access to spectrum to ensure consumers can afford to communicate and that smaller players gain entry into the ICT sector. This is a message the department has been sending since the spectrum conversation began.
Sitting alongside other communications officials and Deputy Minister Pinky Kekana following their appearance before the Select Committee on Public Enterprises and Communication in parliament on Wednesday, Nkuna added that cabinet had accepted the white paper.
“We are committed to drive universal access and ensure that all South Africans have access to quality and affordable services, and what we are doing now by licensing spectrum and reducing prices speaks to that. We are committed to competition in such a way that we allow smaller operators to participate and play throughout the value chain of the sector,” said Nkuna.
The rollout of this spectrum release, which is expected to be concluded in the first quarter of 2021, is expected to pave the way for South Africa to migrate to higher speed wireless broadband (5G).
Studies done by the Independent Communication Authority of South Africa (ICASA) and the Competition Commission found that while there were four major mobile players in the country; Vodacom was the biggest player as it owned the most ICT infrastructure across municipalities, followed by MTN, and that other players like Cell C and Telkom often had to approach Vodacom to use its infrastructure, which made it difficult for them to compete.
“Recently, we have a situation whereby Cell C and Telkom have gone to the bigger [operators] to ask to use their infrastructure. So we have a situation where there are four companies that are supposed to be competing with each other, but then the smaller ones have less infrastructure and have to go to the bigger one,” said Nkuna.
This is of particular concern to the department as they believe this infrastructure issue would create a situation where only the networks with infrastructure would gain access to extra spectrum once it is released.
According to Nkuna, the white paper proposed a policy in which open access is promoted, allowing the process to take on a wholesale form through the establishment of what they call “Wireless Open Access Network”. This would then allow the regulator to play a role in determining what prices all licensed players will pay, as opposed to having the regulator license spectrum to one dominant player thus allowing them to charge their own exclusive prices.
“So this overall is what we are proposing in the white paper. This is called openness and transparency. So we have been saying to the mobile operators that we need openness and transparency. What this means is that we see in the fibre environment all the companies that are operating in that space are operating on an open-access basis.
“Now the question is that if we can do it in the fibre environment, why can’t we do it in the wireless environment because the same industry is already operating on open access. Equal access and non-discrimination means that you can’t give something to one company and refuse to give to another company unless it is on the grounds that capacity is not available,” he added.
Their plans for the Wireless Open Access Network would be to have it structured like a private company, modelled after signal distributor Sentech – which currently provides signal to all broadcasters.
These plans were slightly changed, however, after an outcry from smaller players in the sector.
As a result, an agreement was reached in July 2019 and it dictates that the Wireless Open Access Network will take on the form of hybrid model where a wholesaler will co-exist with other established and smaller players in the ICT sector.