A long-awaited spectrum frequency audit by the Independent Communications Authority of SA (ICASA) has stalled, delaying competition in the sector and negatively affecting end-users.
An audit is vital to understand what spectrum is currently being used and make space available to operators, so SA can benefit from more competition and access to broadband services, which could push prices down.
The process was initially announced in 2009, when the Department of Communications, under former minister Siphiwe Nyanda, included the review in its 2009 to 2012 strategic plan. It was set to finally get under way earlier this year.
However, the plan seems to have stalled and there is no clarity around available frequency, say market commentators. As a result, local operators are unable to plan ahead and new entrants cannot gain a foothold in the market.
Mobile broadband has the potential to add R72 billion to the economy and create 28 000 jobs by 2015. However, this economic boost depends on operators being allocated more frequency, as SA is running out of space in current allocations, warns global industry association GSMA.
Vital undertaking
The objective of the audit, according to advisory firm Ellipsis Regulatory Solutions, was to make sure that licensing of the radio frequency spectrum results in efficient usage, and is in support of national interest, development and diversity.
However, more than two years have passed and the audit has yet to take place. Ellipsis argues “very little information is available regarding spectrum usage in SA, and there is a reasonable suspicion that such published usage statistics as they exist are inaccurate”.
A tender for the appointment of a service provider to audit the current national radio frequency spectrum between 500MHz and 20GHz had a 29 October 2010 deadline, and a further tender was issued in February to be awarded last month, says the Ellipsis Web site.
ICASA has audited space between 450MHz and 470MHz, as well as between 790MHZ and 862MHz for the 2010 Fifa Soccer World Cup. “The accuracy of these documents is contested, but they do indicate an astounding under-utilisation of spectrum in these bands,” says Ellipsis.
Dominic Cull, owner of Ellipsis, says the audit is vital to work out what spectrum is being used, and where there are gaps that could be used by new or incumbent players.
Cull explains ICASA has a backlog of invitations to apply (ITA) requesting spectrum allocations from players in the industry, which is negatively affecting competition. “We need to make progress and those ITAs have been sitting since 2006. It's not an acceptable situation.”
No planning
Steven Ambrose, MD of WWW Strategy, says ICASA must sort out spectrum allocations urgently, because operators can't plan overnight and the current allocated space is becoming overused.
Ambrose says without an audit, it's difficult to know what is available, and to whom. ICASA needs to audit what is available, and allocate frequency on a commercial and proper basis, he adds.
Frost & Sullivan ICT industry analyst Vitalis Ozianyi says an audit is needed for clarity on available spectrum. He explains competition is being hindered, because new players can't launch, which could be hindering cheaper communications as market forces come into effect.
In addition, says Ozianyi, if companies don't have any information about allocations, they cannot plan or invest in telecommunications. Networks require capital investment in aspects such as base stations, he says.
Going nowhere
GSMA's special government advisor, Ross Bateson, has argued spectrum is finite and current allocations won't be enough to allow operators to expand broadband access in the short-term. Bateson says ICASA must provide guidance on how spectrum will be allocated to cellular operators this year, and start allocating new frequencies next year, or in 2013 at the latest.
Vodacom CEO Pieter Uys has said growth of its network is limited by the amount of available spectrum. Because of the limited spectrum, Vodacom had to find other ways of improving the network by using smarter technology. “It's in Vodacom's interest to quickly upgrade capacity.”
A recent research paper, by Research ICT Africa, argues that the local telecoms sector has been in flux over the last decade from a policy and regulatory perspective. According to the report, the “anticipated opening up of the market has been hampered by a number of legal and regulatory bottlenecks”.
The report, South African ICT Sector Performance Review for 2009 and 2010,says the liberalisation was anticipated when the Electronic Communications Act was enacted in 2005, but has failed to materialise.
It adds that the landmark court ruling, about three years ago, allowing value-added network services (VANS) to self-provision was a “hollow” victory, because there is still no “equitable spectrum allocation”.
“The rights secured through the courts for service providers may be hollow, should the bottlenecks in the current legislation not be removed. The inability of the regulator to effectively perform its role will continue to inhibit innovation and constrain affordability,” argues Research ICT Africa.
Neither ICASA nor the DOC responded to requests for clarity on the audit process.
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