No 1800MHz for MTN, Vodacom yet

Johannesburg, 06 Nov 2000

The Independent Communications Authority of SA (ICASA) has ruled that mobile operators MTN and Vodacom will not yet be allowed access to the high data-potential 1800MHz spectrum.

Citing competitive business issues as its primary motivation, the ICASA council said on Friday that it would not "at this stage" proceed with licence amendments that would see the two operators swap some of its capacity in the 900MHz spectrum range for an 1800MHz allocation.

Vodacom said in October that its quality of service would start to deteriorate by December and that the holiday period would be marked by an increase in dropped calls in metropolitan areas should it not be granted 1800MHz access.

Legal delays

The regulator again linked its decision to the third cellular licence, which is still being delayed by legal action.

"Research has shown that in many other countries regulators have delayed the granting of 1800MHz spectrum to existing licensees for a specified period of time," the authority said in its ruling. "This pro-competitive regulatory tool is the only one clearly available to ICASA due to uncertainties regarding other pro-competitive rules such as the interconnection guidelines, which are currently the subject of litigation.

"This fact, together with the need, in the South African context, for regulators to assist new licensees who have extensive empowerment and community service obligations which are not imposed on existing licensees, has convinced ICASA that it cannot, as this point in time, grant 1800MHz spectrum to existing licensees."

ICASA said in August that it would not grant the operators 1800MHz immediately, but would consider a swap of 2 x 2MHz of the 900MHz they use at present for a 2 x 10MHz assignment in the 1800MHz band. Both operators indicated a willingness to comply, although Vodacom said that the cost of relinquishing the 900MHz spectrum would be in the region of R2 billion.

Reasonable substitute

The regulator was apparently also convinced by arguments from MTN that EGSM, which operates in the 880MHz to 890MHz and 925MHz to 935MHz region, is a reasonable substitute for the PGSM range currently in use.

MTN used the argument to show that it would not be necessary to deprive it and Vodacom of 900MHz for use by the new entrant, as the third licensee could use EGSM to equal effect.

ICASA, however, saw another reason not to grant the 1800MHz application.

"EGSM and new upgradeable 900MHz equipment could provide solutions to the alleged congestion problems being experienced by the existing licensees," it said in the ruling.

The application was opposed by, among others, third licence applicant Nextcom and the Internet Service Provider Association (ISPA).

ISPA expressed concern that the high data rates possible through use of the 1800MHz spectrum would put the operators in competition with value-added network service providers.

Vodacom would not immediately comment, but said it was preparing a statement on the matter. MTN representatives were not available at the time of publication.