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Ex-Vodacom, SAA boss Vuyani Jarana calls out ICASA over WOAN

Samuel Mungadze
By Samuel Mungadze, Africa editor
Johannesburg, 28 Dec 2020
Vuyani Jarana, Mafadi Consortium CEO.
Vuyani Jarana, Mafadi Consortium CEO.

There is growing opposition to the forthcoming spectrum auction, with ex-Vodacom Business and South African Airways CEO, Vuyani Jarana’s Mafadi Consortium becoming the latest entity to criticise the process being championed by the Independent Communications Authority of SA (ICASA).

Mafadi Consortium, which is bidding for the Wholesale Open Access Network (WOAN) licence, says problems with the planned spectrum allocation are so significant and warns that the process will produce “a still born that will be extremely costly to funders and which will damage the mobile market going forward”.

The latest criticism of the ICASA spectrum allocation process comes on the back of a recent court bid by Telkom to halt the auction, which is slated for March next year.

Telkom wants ICASA to stop the whole process to allow broader participation and address some of the concerns it raises.

According to Telkom, the fundamental flaw made by ICASA is that the Invitation to Apply (ITA) involves the auction of portions of spectrum in the 703-733 MHz paired with 758-788 MHz (the 700 MHz) and the 791-821 MHz paired with 832-862 MHz (the 800 MHz) frequency bands, which it argues are not immediately available for use on a national basis by a licensee who may ultimately succeed in its bid during the auction process.

In October ICASA opened the ITA for the licensing of International Mobile Telecommunications (IMT) spectrum, also known as high-demand spectrum, and that of the WOAN.

Now, Jarana, Mafadi Consortium CEO, says he has written to ICASA seeking clarification in terms of both the approach and details of the ITA “as we find crucial elements of the ITA mitigating against the successful operations of the WOAN.

“Raising the alarm is crucial taking into consideration the envisaged role of the wholesaler wireless open access network in transforming the industry to play a meaningful role in social and economic changes that our country so dearly needs.

“It is now a universal truth that the ICT infrastructure is the core and indispensable input for national economies and well-being of societies. Just like in all other countries, it is critical that access to and use of this infrastructure be extended to reach all South Africans. The Wireless Open Access Network was conceived as a crucial element of this infrastructure extension.”

Viable vision

According to Jarana, the WOAN was conceived as an aggregator network that would consolidate retail traffic, especially from small retail operators and mobile virtual network operators (MVNOs) who do not have the commercial opportunity to access large scale telecommunications infrastructure over which to deliver services.

“To be able to deliver traffic at scale, the WOAN must have adequate spectrum, access to current passive telecom infrastructure, as well as attract the required investments to rollout the telecommunications network.

“The study conductedby the Council for Scientific Industrial and Research (CSIR) deals with the issue of viability of the WOAN as well as spectrum as a key factor endowment upon which the success and viability of the WOAN is predicated.”

Jarana says the study points out a viable WOAN achieving 20% market share.

“The study indicates the minimum allocation of spectrum allocations to the WOAN in the following combinations for viability at 20% market share: 1 x 25 MHz in the 800 MHz band, 2 x 20 MHz in the 2600 MHz FDD [frequency division duplex] band and 1 x 25 MHz in the 2600 MHz band TDD [time division duplex].”

Contrary to the CSIR study, Jarana says, the WOAN ITA recommends a much smaller allocation of spectrum to the WOAN “effectively killing each chances of existence even before it can start.

“The WOAN ITA prescribes the following spectrum allocation to the WOAN: 1 x 10 MHz in the 700MHz band, 2 x 20 MHz in the 2600 MHz FDD band and 1 x 25 MHz in the 2600 MHz band TDD.

“Having crunched the numbers and dealt with the capacity of the WOAN, based on the allocated spectrum, the Mafadi Consortium is of the view that the reduction in the quantum of the Sub-1 Gig spectrum allocation to the WOAN is fatal to the WOAN business case and needs to be addressed.”

Grandfathering telcos

Furthermore, Jarana says: “The 700MHz band is not clean as digital migration has not been completed, meaning that even if the licensing of the WOAN would be fast-tracked, the WOAN would have to wait for the digital migration to complete before being able to implement an effective and contiguous service. This places the WOAN in a disadvantaged position from the onset.”

More worrisome to the Mafadi Consortium, Jarana says, is implications for future allocation of spectrum as the ITA suggests that the “spectrum already in the hands of telecom incumbents will remain as such at the point of renewal of their licenses, most of which should happen during the 2022-2023 time-window.

“This basically grandfathering the existing arrangements with no regard to the needs of the new entrant and market dynamics. If this position is maintained, it would mean that the WOAN would be deprived of spectrum for almost another 15 to 20 years. It is important that the WOAN had adequate spectrum if it is to adequately fulfil its wholesale network provider ambitions.”