The regulator will finally give operators the chance to get their hands on spectrum that could be used for LTE or WiMax networks.
Considered a scarce commodity, spectrum in the 2.6GHz and 3.5GHz band will, after years, finally find its way into the market, after the Independent Communications Authority of SA (ICASA) announced the details around how it will be allocated.
Incumbent operators and alternative players had all but given up hope of ever seeing the spectrum come to the market, and many have made alternative plans to build up networks of their own.
For years, the spectrum in the two bands had become the best bet for the smaller players to provide services to customers across their own networks, since it will be used for wireless technologies, as Telkom owns most of the available fixed infrastructure.
Making good on its promise to release a decision before the end of the month, ICASA chairman Paris Mashile says iECNS licensees will need a 30% historically-disadvantaged business rating before even considering applying.
The 30% will come as a relief to many players in the market, since the original regulations published in 2008 stipulated that companies needed to have a 51% black empowerment rating to enter the auction.
The regulator says it will release two invitations to apply for the spectrum, one for the 2.6GHz band and one for the 3.5GHz band. The latter will be specifically allocated to metro rings at a local level. Municipalities will be given the option to apply for two licences per municipal area, each at 30MHz.
The 2.6GHz band is what the telecoms providers will be after, and the regulator says that if more than four companies make it through the beauty contest phase, where it must prove 30% HDI, then it will go onto a closed auction.
“If only four companies make it through, then they will automatically be given the spectrum, and receive 30MHz each,” explains Mashile.
The 30MHz allocation size was determined after an industry outcry, when the first set of regulations dictated that operators would only receive 20MHz each. The reserve prices have also been set for the auction, with 3.5GHz set at R250 000 and the 2.6GHz at R750 000.
With the release of clarity around spectrum, coupled with the Department of Communications' Spectrum Policy, operators will now be frantically looking to get their applications together.
Most operators declined to comment this morning on ICASA's announcement, since many of them will have to review whether they will be eligible to enter the auction under the BEE requirements.
Local service provider MWeb has already started setting itself up to be one of the first applicants, with the release of its uncapped wireless offering, using the company's WiMax trial network backhaul as be basis of its service.
The company already has several dormant WiMax base stations across the country and will likely make a play for the spectrum. The regulator did not exclude companies that already have spectrum in those two bands.
Companies which already have access to spectrum include Telkom, Neotel and Sentech, which has been licensed to use two fifths of the available spectrum in 3.5GHz. Sentech and iBurst already have access to 2.6GHz.
Sentech's access to a large chunk of the spectrum has been an industry bone of contention since 2006. However, the DOC's policy calls for a “use it or lose it” attitude from the regulator, which could see Sentech either making use of it, or losing it.
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