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Broadband spectrum licensing edges forward

Paula Gilbert
By Paula Gilbert, ITWeb telecoms editor.
Johannesburg, 15 Sept 2015
A step forward from ICASA in the licensing of three bands of spectrum could help unlock South Africa's true mobile broadband potential.
A step forward from ICASA in the licensing of three bands of spectrum could help unlock South Africa's true mobile broadband potential.

The process for the allocation of in-demand spectrum will likely still take another two years, according to analysts, despite a big step forward by the Independent Communications Authority of South Africa (ICASA).

Yesterday, ICASA announced the publication of an 'information memorandum' that provides guidance to prospective applicants that wish to apply for licensing of the 700MHz, 800MHz and 2 600MHz bands. These bands are in particular high demand from mobile and wireless operators, which need them to deliver high-speed broadband services.

"The news is very welcome and is sure to be welcomed across the industry," says Ovum senior analyst Richard Hurst. "The real issue behind the allocation of the spectrum is that it will allow the country to begin unlocking its true mobile broadband potential with a knock-on effect for services, which will be a boost for both business and consumers.

"These bands allow for a greater coverage area and for greater throughput of data services. This will help with the delivery of services in rural areas, as well as being able to add capacity to existing metropolitan networks," says Hurst.

Africa Analysis MD Dobek Pater says the lower frequency spectrum allows for network deployment with a wider reach at a lower cost than using higher frequencies.

"As the signal is better propagated in the lower frequencies (reaches further from a base station/transmission site) and is also stronger in terms of indoor/building penetration (therefore, better signal quality indoors).

"This would allow operators to reach peripheral/rural areas with high-speed broadband at a lower capex than using the spectrum they currently have."

DTT on the horizon

Pater believes the allocation process for these spectrum bands will still need to unfold over the next two years or so. A large part of this is because the 700MHz and 800MHz bands are currently being used for terrestrial broadcasting entities, and can only be freed up and allocated to other entities once South African television switches from analogue to digital terrestrial television (DTT).

The Department of Communications (DOC) is yet to announce a date for digital migration, but minister Faith Muthambi last month told Parliament that DTT will be implemented in the next 18 to 24 months.

South Africa has been planning for digital migration since 2008 but in June missed the International Telecommunication Union's deadline to turn off analogue broadcast and shift to a digital television era. The information memorandum from ICASA does, however, show a step towards that process.

DOC spokesperson Mishack Molakeng could not comment on a timeframe for the process, but says "stakeholders involved in the implementation of digital migration meet twice every week to work towards management of tight deadlines".

"ICASA is part of ministerial task team, and a key role player on the implementation of the Broadcasting Digital Migration programme. Together with the South African Post Office as a distributing agent for set-top boxes, the minister will from the 1st of October, embark on a registration drive for qualifying indigent TV-owning households," adds Molakeng.

Government has committed to subsidising five million poor TV-owning households by providing free set-top boxes (STBs) when DTT goes live. Universal Service and Access Agency of SA CEO Zami Nkosi yesterday told ITWeb the DOC has placed an order for 1.5 million STBs so far. This after a tender worth R4.3 billion was awarded to 26 STB manufacturers earlier this year.

Pater says the manufacturing and distribution of the millions of subsidised STBs will take time, as will the process of awarding the freed up spectrum.

"ICASA may want to position itself to be ready to award the spectrum before the migration has been completed, so that operators can begin using this spectrum as soon as the migration has been concluded," says Pater.

Hurst says the timing of this re-allocation of the spectrum will need to be perfect; however, it is an indication that South Africa is taking a step closer to DTT.

"I think we should adopt a cautiously optimistic approach and I think all parties agree that this needs to be carried out sooner rather than later but the process must be carried out in the correct manner."

DTT obligations

ICASA says that in order to help fast-track the DTT migration project and utilisation of 700/800MHz, applicants that are awarded this spectrum "are obliged to provide set-top-boxes free of charge to households for free to air terrestrial television service, to who may not qualify for the subsidy scheme for ownership for poor television-owning households in the affected areas".

Pater says operators are desperate to begin using this spectrum as soon as possible.

"By assisting with deployment of STBs, they will expedite the migration process and be able to use the spectrum sooner rather than later."

ICASA says the cost of providing the STBs will be offset against the price of the spectrum once it goes to auction, so Pater says this is ultimately a win for operators.

Hurst believes this move by ICASA is more aimed at the broadcaster and not so much the mobile broadband players and "is one way of the regulator getting around the high cost of STBs for the rural areas".

When probed on whether the STBs provided by successful applicants will be part of government's five million, ICASA responded that "the intention of the authority is to propose that on top of the five million government set-top boxes wherein there is a shortfall, successful applicants be required to procure and install fully-functional government STBs to other poor households."

ICASA says it took note of the fact that government STB allocations are only targeting five million households out of the likely eight million needy households.

However, ICASA pointed out the information memorandum is still a consultative document and it is awaiting comments on the proposals.

Telcos react

"The frequency bands in question are key frequency bands internationally, especially for the delivery of mobile services. As a national player in the mobile broadband space, and in order to remain competitive in the market, Telkom will consider its options when these bands are put to auction," says Telkom's managing executive for group communication, Jacqui O'Sullivan.

This after Telkom CEO Sipho Maseko last week publicly called for more spectrum to be made available, particularly sub-1GHz spectrum (700MHz, 800MHz), pointing out Telkom remains the "only mobile operator with no sub-1GHz spectrum available to it".

Vodacom also welcomed ICASA's announcement, saying the intervention by the regulatory authority will be helpful as South Africa is "currently experiencing an acute shortage of spectrum in the local market".

"The assignment of this spectrum would enable us to increase broadband coverage, especially in rural areas and thus improve the lives of households in these remote parts through access to broadband," Vodacom told ITWeb in a statement.

Graham de Vries, MTN SA executive for corporate services, says MTN welcomes the publication which he says "provides much-needed clarity that is required".

"In general, the lack of requisite spectrum has hampered the industry to roll out new-generation networks and provide quality service to subscribers. To compensate for the lack of requisite spectrum, MTN had to re-farm spectrum in order to deploy new generation networks such as LTE. We cannot continue to do so as demand for data is increasing exponentially," adds De Vries.

Cell C says it is "reviewing the document and will comment through the provided for processes".

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