WiMax BEE requirements lowered

By Candice Jones, ITWeb online telecoms editor

Johannesburg, 24 Jul 2009

The Independent Communications Authority of SA (ICASA) has decided to lower the empowerment requirement for WiMax spectrum applications.

The regulator released its new gazetted decision last night, stipulating that the new BEE requirement will be 30% black equity shareholding, allowing smaller players to get back in on the bid for the spectrum.

Last year, ICASA released a document saying any additional WiMax spectrum will be allocated to companies with 51% black ownership only. Meeting the high empowerment requirement would have granted companies the right to then bid for spectrum in an auction.

The 51% requirement caused an outcry, specifically among the smaller operators, who were looking to use WiMax as a means to compete effectively against the incumbent operators.

Internet Solutions and MWeb were two of several companies that were granted a test licence and invested in technologies for trial sites. The 51% empowerment figure effectively cut them from the race for additional spectrum. Black ownership requirements for ECNS licences are 30%, and MWeb specifically noted the vast difference.

This is the first move made by the regulator in just under a year on WiMax spectrum and many operators have been getting concerned that the spectrum would not be released this year. Earlier this month, international technology business Motorola called on the regulator to make a decision - and soon.

SA is fast lagging behind in the WiMax space, with countries like Uganda and Gabon already on the high-speed wireless map.

According to ICASA's decision document from last year, each successful applicant in the 2.6GHz band would be allocated 20MHz. The allocation of 20MHz allows for a maximum of six companies to be allocated spectrum.

However, companies explained to ITWeb then that 20MHz was not enough to make any significant impact. It appears as though ICASA has reversed this decision and granted blocks of 30MHz to each operator, allowing for a maximum of four operators in the spectrum.

While many companies would have been hoping to get going before 2010, to take advantage of the expected surge in tourism, it is unlikely that many of them will be able to roll out a WiMax network, even if these regulations are approved over the next few weeks.

However, there is a chance that IS and MWeb could use their test networks to get off the ground quickly.

The new decision document does not stipulate what will happen to companies that are not using their allocated spectrum efficiently. Most of the incumbent operators are already running commercial WiMax services, since all have already been allocated spectrum.

Two-fifths of the 3.5GHz spectrum was allocated to Telkom, Sentech and Neotel, leaving the remainder for further allocation. Spectrum licences in the 2.6GHz band were allocated to Sentech and iBurst, leaving 126MHz available for others to snap up.