Picture: DAILY DISPATCH
Picture: DAILY DISPATCH

SA’s telecoms operators have welcomed the implementation of the next phase in the allocation of high-demand spectrum by the Independent Communication Authority of SA (Icasa) as a positive step to a future of lower data costs and capital expenditure, while also raising some concerns about the process. 

On Friday, Icasa surprised the industry by kicking off the 5G licensing process, as well as publishing detailed proposals on how five bands of new 4G spectrum will be licensed.

Spectrum refers to the radio frequencies on which data is transmitted. More spectrum means a better quality service with fewer dropped calls and faster download speeds.

Vodacom’s group CEO Shameel Joosub said: “The publication of Icasa’s information memorandum is encouraging and a step in the right direction. That said, there are some points of clarification that we will seek from Icasa before we table our response ahead of theJanuary 31 2020 closing date. This includes a timeline on when the digital migration will take place as this is a critical component in fully understanding the terms and conditions attached to 4G spectrum awards.”

Lengthy delays in completing the digital migration and allocating 4G spectrum have curbed the pace at which data prices could have fallen, he said. 

Lower data costs

Local operators have long held the view that new spectrum will allow for the lowering of mobile data prices. As spectrum has not been allocated in more than a decade, operators have had to spend a lot of capital repurposing existing spectrum. They have had to extend network coverage to offer new and faster services, such as 3G and 4G, the cost of which has largely been borne by consumers. 

MTN said it believes Icasa’s information memorandum on spectrum will provide a framework for the regulator’s approach to licensing of high-demand spectrum. “This will also provide transparency to the market prior to the publication of the invitation to apply (ITA) and a greater understanding of the process and rationale applied in the licensing approach adopted by Icasa,” said Jacqui O’Sullivan, executive for corporate affairs at MTN SA. 

Cell C echoed the sentiment, but said it noted that Icasa  had included the 3.5GHz band that was excluded in communications minister Stella Ndabeni-Abrahams’s policy directive issued in July 2019. “Cell C will study the [information memorandum] and will make further comments in due course,” the operator said. 

“We look forward to the ITA process, which is the next step in inviting bids for the various spectrum bands. Cell C supports Icasa’s efforts in speeding up the deployment of high-demand spectrum for next-generation technologies,” the operator said. 

Vodacom has said the awarding of new spectrum remains a vital part of reducing input costs and reducing data prices in SA. “Icasa’s plan to address 5G spectrum is also welcomed, as we are ready to provide 5G services to our customers in SA. The advent of 5G will open up a world of possibilities when it comes to the creation of new industries and jobs,” said Joosub.

Earlier in 2019, the Competition Commission accused local operators of overcharging consumers for mobile data, penalising those with lower incomes the most. Operators typically charge more for data services in SA than they do in other markets where they operate, according to the provisional findings of the ongoing data services market inquiry.

gavazam@businesslive.co.za