No WiMax commitment to cheaper telecoms

By Damaria Senne, ITWeb senior journalist

Johannesburg, 02 Apr 2007

The Independent Communications Authority of SA (ICASA) is unable to establish if WiMax will drive down telecommunications costs.

This follows hearings held last week to establish the criteria for awarding WiMax spectrum.

SA's communications regulator would like to see a commitment to lower telecoms costs from operators, before it allocates WiMax spectrum.

Some operators were willing to commit, saying WiMax would allow for cost-effective network roll-out, enabling lower costs. However, others were non-committal.

The hearings examined procedures and criteria for awarding spectrum licences in the 2.5MHz-3.5MHz band, which can be used for WiMax technology.

As part of this process, ICASA seeks answers on whether telecoms operators would use access to WiMax spectrum to drive down telecoms costs for consumers, or use it purely to drive profits.

Organisations which hope to later apply for WiMax spectrum, which include fixed-line and cellular operators, broadcasters, Internet service providers and municipalities, were asked to provide input on the criteria and processes ICASA should adopt in allocating WiMax spectrum.

ICASA has already allocated parts of the 3.5MHz band to Telkom, Sentech and Neotel, while portions of the 2.5MHz band have been allocated to iBurst and underserviced area licensees.

Beauty contest

Vodacom, Cell C and the Internet Service Providers' Association of SA (ISPA) were among the organisations that suggested ICASA use a "beauty contest" system to allocate WiMax spectrum.

Judging criteria should include compelling business cases, efficient use of spectrum and equitable access in the proposed approach, said Cell C's head of legal and regulatory affairs, Karabo Motlana.

Vodacom also cited efficient use of spectrum, roll-out times, network architecture and economies of scale.

ICASA chairman Paris Mashile, as well as some of the panel, repeatedly questioned whether the proposed economies of scale will translate into lower telecoms costs for consumers.

Mashile said Vodacom, as the largest mobile phone provider in SA, enjoys huge economies of scale, yet that has not translated into sufficiently lower costs for consumers.

Vodacom's executive head of technical regulation division, Mortimer Hope, was unable to provide a firm answer on the matter, leading Mashile to later comment "it's like drawing blood from a stone".

Preferential allocation

Fastcomm, which designs, develops and implements wireless networks, was firm on the issue of telecoms costs as a criterion for allocating WiMax spectrum. ICASA should allocate WiMax spectrum to those players who can drive down the cost of telecoms and spark competition in the marketplace, said representative David Meintjies.

ISPA representative Michael Silber also argued the spectrum licence price should be the same as it was when incumbents were first licensed, or be more favourable.

This would promote competition, he said. "You can put a hundred Davids against a Goliath, but you have to at least give them a slingshot."

The City of Cape Town also suggested municipalities be granted spectrum on a preferential basis due to their developmental and non-profit focus.

Citizens would be able to make free calls from municipal facilities, and voice calls from any location would be free for those citizens who subscribe to the city for telecoms services, it said.