TELECOMS: Urgent action pledged on data, spectrum
Mboweni promises to ‘work relentlessly’ with the communications minister to license spectrum for wireless broadband
Data costs must fall, finance minister Tito Mboweni declared in his budget speech.
He said the long-delayed licensing of spectrum for wireless broadband will begin this year, and promised to "work relentlessly" with communications minister Stella Ndabeni-Abrahams to achieve this.
Mboweni said Ndabeni-Abrahams "will shortly be issuing policy direction" to the Independent Communications Authority of SA (Icasa) for the licensing of spectrum.
"I will work relentlessly with the minister until this matter is resolved," he said. "This includes resourcing Icasa for this mandate."
Unlike previous years, when telecommunications has barely rated a mention in budget speeches, the industry was highlighted — along with mining and tourism — in the Budget Review on Wednesday.
"Progress has been made on growth-enhancing reforms, including preparations to allocate telecoms spectrum, reform visa requirements and remove barriers to mining investments," the review says.
As part of an update on President Cyril Ramaphosa’s economic stimulus and recovery plans, the review says "licensing for high-demand spectrum will take place this year, with the process expected to be complete in 2020-2021".
It may be no coincidence that Mboweni gave such prominence to the highly lucrative sale of spectrum for fourth-generation (4G) networks at a time when the government is scrambling to find new sources of revenue. It could be a useful fillip for the government as it tries to repair the economic damage done during the Jacob Zuma years.
Mboweni’s remarks on spectrum licensing will be music to the ears of the cellular industry after a series of destructive interventions by previous communications ministers.
Operators have been forced to re-allocate spectrum for 4G — or long-term evolution (LTE) — from their 2G and 3G frequencies.
This month Ndabeni-Abrahams withdrew the controversial Electronic Communications Amendment Bill, which sought, among other things, to force operators to give up their spectrum through its provision for a wholesale open-access network.
Operators have been unable to benefit from all the advantages of 4G frequencies that make it cheaper to distribute wireless broadband while having better reach.
The advantages include the ability to provide better coverage with fewer base stations. 4G is being introduced by operators across the world as their revenue shifts from voice to data traffic.
The spectrum frequencies Mboweni has in mind likely include those currently used by analogue TV signals. The switchover to digital terrestrial television has been delayed for years, thanks in part to a bizarre flip-flop by the previous minister, Faith Muthambi, that flew in the face of the ANC’s own policy.
Muthambi not only gave confidential cabinet minutes to the Guptas — as revealed in the leaked Gupta e-mails — but stalled the highly important digital switchover process, presumably to allow Zuma’s benefactors to get into the business of making the decoders that older televisions would need to receive the digital signal.
This extremely valuable spectrum, known in the industry as the "digital dividend", could be better used for wireless broadband than for broadcasting soapies.
As for the government’s project to provide connectivity to its departments and bring cheaper broadband to citizens, known as SA Connect, Mboweni’s budget provides further funding for its second phase.
Adopted by the cabinet in 2013, SA Connect is SA’s national broadband policy. It is described in the National Development Plan as — wait for it — "a seamless information infrastructure by 2030 that will underpin a dynamic and connected vibrant information society and a knowledge economy that is more inclusive, equitable and prosperous".
The 2020 vision for broadband, according to the 2013 Government Gazette in which it was promulgated, "is that by 2020, 100% of South Africans will have access to broadband services at 2.5% or less of the population’s average monthly income".
No wonder Mboweni says he wants to "work relentlessly" on the spectrum allocation — the target is set for next year and the project has been mired in delays and controversy.
The Budget Review says: "The provisional allocation for SA Connect phase 2 requires an implementing model to roll broadband out to public buildings.
"This amount may be confirmed in the 2020 budget, after the department of telecommunications & postal services completes the detailed institutional framework required."
An amount of R1.23bn has been allocated to this for 2021/2022, which is more than the R1bn for "road asset management" and three times the R433m for fixing municipalities.
Mboweni’s enthusiastic endorsement of the #DataMustFall movement is just what the telecoms industry and SA’s mobile-using citizens need.
Cheap broadband has enabled many countries to thrive in the knowledge economy and to use cloud-based and on-demand computing enabled by the internet.
Such connectivity is key to joining the fourth industrial revolution — a mix of new technologies and services (including artificial intelligence) for which the country needs to urgently prepare if it does not want to be left even further behind by the internet age.