The Independent Communications Authority of SA's (ICASA) framework on the licensing of high-demand spectrum aims to avoid the creation of another Telkom, says an analyst.
The regulator yesterday published a framework to license spectrum in the coveted 2.6GHz and 800MHz bands.
“There's a sense running through the regulations that the regulator doesn't want to see another Telkom. It doesn't want to create a Telkom in the wireless space,” says World Wide Worx MD Arthur Goldstuck.
“The spectre of Telkom's past hangs over these regulations.”
Healthy move
He explains that the concept of the spectrum park and the wholesale open access model are both directly aimed at Telkom, because that's how Telkom constrained the market in the past decade.
ICASA has outlined an Open Access Model to allow one network many service operators. This will happen through no locking of devices; no blocking of content, applications and services; and “no retail” - where transport capacity will be offered to retail service providers on a non-discriminatory basis.
Entities licensed for both the 2.6GHz and 800MHz bands will be obliged to provide this wholesale open access network.
“The open access model is a healthy move by ICASA. This has become an international best practice and will allow the operators to focus on marketing, product innovation and customer care,” says senior telecoms consultant at analyst firm BMI-T Tim Parle.
“It will, however, need a strong and adequately resourced company to provide this service. I guess that you could liken this to a wireless LLU, as a single resource is being used by multiple operators.”
Useless slice
The regulator also put forward the Managed Spectrum Park Model. It explained this will allow a number of entities to participate in sharing common spectrum on a self-managed basis.
“In the determination of the spectrum allocations, ICASA has had to strike the balance between the number of operators and their allocations: too many operators means too much wasted bandwidth in the form of guard bands, and each user needs sufficient channel width to be able to provide high-bandwidth services,” says Parle.
He cites the recent situation in Kenya where the regulator, KCC, allocated so many licences that each were “Marie Biscuit thin” and effectively useless.
“This led to Safaricom acquiring several companies to compile a meaningful and workable chunk of spectrum.”
The other element to note, according to Goldstuck, is the “use it or lose it” policy, where licensees must effectively utilise the spectrum or have it taken away. Communications minister Dina Pule says ICASA has been directed to ensure efficient spectrum utilisation and to allow for the introduction of new entrants.
“This also sends a signal upfront to the abuse of spectrum that has taken place by Telkom and Sentech previously,” says Goldstuck.
Operators mum
Dominant operators in the telecoms space have declined to comment on the spectrum licensing framework.
MTN and Vodacom both say it is too soon to comment at this stage, as they are still studying the documents and the potential implications.
“MTN appreciates that ICASA is seeing the urgency on this matter,” says Kanagaratnam Lambotharan, CTO at MTN SA.
Telkom also says it requires time to examine and analyse the framework document before it can comment on the matter.
GM of Strategic Business Development at Neotel Angus Hay says the open access and sharing concepts introduced are similar to spectrum trends elsewhere in the world.
“We will be able to comment further once the exact models become clear, but Neotel generally supports the sharing of infrastructure and scarce resources, provided that this is done efficiently, with clear rules, and preserves strong competition between telecommunications providers.”
Cell C's executive head of Regulatory Affairs Mothibi Ramusi says the company supports the concept of open access.
“Cell C welcomes the process started by ICASA; however, the company is concerned about the timelines as proposed. We have strongly advised ICASA to engage with the municipalities as a matter of urgency, from the outset, to facilitate the achievement of the proposed roll-out obligations, including issues surrounding site acquisition and the issuing of permits.”
The regulator set the closing date for the Draft ITA and Spectrum Plan as 31 January. There will then be public hearings from 1-3 February and the final publication of the plan and ITA will happen on 13 February.
The closing date for applications is 23 March and the licensing process will be finalised on 30 April.
Allocating more spectrum in the 2.6GHz and 3.5Ghz ranges has been on the cards since 2006, but invitations to apply for frequency in the bands were withdrawn in June 2010. Since then, there has been very little movement towards auctioning the spectrum, which is vital for operators to move to the next generation of technology.
Comments please
Pule yesterday gazetted the two draft Policy Directions for public consultation.
The Policy Directions seeks to direct ICASA to fast-track the finalisation of the methodology for spectrum and eligibility criteria in the 2.6 GHz band; and to consider the scope of the action to be taken at the national level to promote the efficient use of the digital dividend spectrum.
Interested parties are invited to furnish written submissions on the proposed Draft Policy Directions to ICASA on Electronic Communication Services in High Demand Spectrum, says the Department of Communications (DOC).
The comments must be sent within 30 calendar days from yesterday. It can be posted to Private Bag X860, Pretoria, 0001; delivered to First Floor, Block F, iParioli Office Park, 399 Duncan Street, Hatfield, Pretoria; or faxed to (012) 421 7019.
Comments can also be e-mailed to spectrum@doc.gov.za. All comments must be marked for attention to Cynthia Lesufi, deputy-director of Frequency Spectrum at the DOC.
Related story:
ICASA moves on spectrum allocations
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