EGSM 'not the answer`

Johannesburg, 07 Nov 2000

When MTN suggested extended GSM (EGSM) as a solution to competitive concerns, it hardly expected the submission to be turned against it.

In its ruling on MTN and Vodacom`s application for access to the 1800MHz cellular spectrum, the Independent Communications Authority of SA (ICASA) cited EGSM as a solution to the operators` bandwidth crunch.

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

Sufficient frequency

MTN brought EGSM into the discussion as an example to show that there was sufficient frequency bands for a third licensee to operate it, and that ICASA need not deprive the incumbent operators of some of their 900MHz spectrum.

EGSM uses the 880MHz to 890MHz and 925MHz to 935MHz range, while primary GSM (PGSM) uses 890MHz to 915MHz and 935MHz to 960MHz.

According to the authority`s summary of arguments during oral hearings in October, MTN convinced the ICASA council that EGSM is effectively equivalent to PGSM and that either could be used by a new operator.

But when it came to the suggestion that MTN and Vodacom actually use the spectrum themselves to alleviate their frequency shortage, the companies balked.

"We don`t have access to EGSM," said Vodacom MD Andrew Mthembu when asked about the suggestion. "Judging by the past performance [of ICASA], should we apply for EGSM we could wait 12 months or more for it."

He also said that handsets that can switch between PGSM and EGSM had not achieved market penetration sufficient for the spectrum to be a viable resource.

Mature compatibility

MTN, however, told the authority that new handsets were compatible with both bands and that EGSM "had reached maturity".

MTN legal and regulatory advisor Graham de Vries says ICASA`s take on the suggestion is "unfortunate".

"The council raised competition concerns. While we were prepared to relinquish some of our 900MHz allocation in exchange for 1800MHz, we added this possibility to that."

MTN also says it is not ready to use the extended spectrum and that it would not fully satisfy its needs.

The 1800MHz frequency that the companies are pursuing allows for far higher rates of data transmission than either PGSM or EGSM. Although both companies say their primary purpose would be to use the allocation to satisfy voice needs, both said providing new data services would be a natural progression.