The policy rolling back on spectrum reserved for a wireless open access network (WOAN) model has ended a prolonged policy impasse.
However, for some, this has raised questions about how competition and transformation objectives in the telecoms sector will be delivered.
The communications department last month confirmed minister Solly Malatsi’s withdrawal of the requirement that certain high-demand spectrum must first be reserved for a WOAN – a move that came after seven years had lapsed without the WOAN being licensed.
A WOAN was envisaged to operate as a single network, built via a consortium, which would sell high-demand spectrum to telecoms operators on a wholesale basis. Government pinned hopes on it to enable more competition in the telecoms market, resulting in data prices coming down.
Some in the industry believed the WOAN would open the monopoly and usher in “much-needed” transformation of the industry by awarding spectrum to an experienced consortium to operate.
However, there were reservations around such a model, given its dismal failure in Mexico and fears that it would suffer the same fate in South Africa.
Spectrum enablement
The move to officially withdraw the policy has freed up the affected spectrum for licensing by the Independent Communications Authority of South Africa (ICASA).
South Africa’s internet industry body ISPA and the Association of Comms and Technology (ACT) have welcomed the policy change, noting it ends long-standing uncertainty.
ISPA states that availability of any new spectrum is significant for the telecoms sector. “The ability of all operators to deliver quality, high-speed wireless services depend on the spectrum they have access to.
“Given that the WOAN proved to be a non-starter, the minister should be applauded for returning the idle spectrum to ICASA, so that it can be allocated and used to service South African consumers. It is, however, lamentable that it took [several] years to complete the process.”
ACT CEO Nomvuyiso Batyi tells ITWeb that high-demand spectrum in the 700MHz, 800MHz, 2 600MHz and 3 500MHz bands was reserved for a WOAN that never materialised, making it available for ICASA to license.
“ACT welcomes the decision and considers it long overdue. The benefits of more capacity, better quality and wider coverage will only materialise once the spectrum is licensed and networks are deployed.”
Asked why the WOAN model failed to progress from policy conception to implementation, ISPA is of the view it was the wrong solution from the outset.
“The goal of the WOAN was to build a privately-owned wholesale network to promote more competition in retail services. The plan to achieve this was, however, not properly thought through and was at odds with the strategies of the major incumbent infrastructure providers.
“Rather than trying to create a new network to compete with large, established networks, government should take the necessary steps to ensure existing networks are providing competitive wholesale options.
“The Electronic Communications Act (ECA) already envisages a two-tiered market structure, with ECNS licensees operating wholesale networks, and ECS licensees selling retail services using those networks. In the mobile space, the mobile network operators play the role of both ECNS and ECS provider to most consumers and offer only limited wholesale options to other ECS.
“ICASA/government could use the existing regulatory framework to address this problem and could also strengthen the legislation to increase wholesale options. The pending amendments to the ECA aim to do exactly that.”
Gaining competitive-edge
ACT’s Batyi believes how regulator ICASA forges ahead with the design of the spectrum licensing process − including eligibility criteria, assignment method and licence conditions − will determine the competitive outcome between established operators and smaller or newer players.
“ACT’s position is that the process should promote fair competition and support participation by smaller providers.”
She notes the amended policy expressly retains network and facilities leasing and wholesale capacity requirements under ICASA’s oversight. “The underlying objectives of affordable connectivity, transformation and smaller-provider participation remain essential.
“They should be pursued through effective competition, wholesale access and sustainable infrastructure investment. Whether the obligations are enough will depend on how ICASA implements and enforces them.”
ISPA adds: “Those obligations, if properly enforced, could certainly result in more competition in retail services, which was the WOAN’s original objective.”
Credible transformation alternative
The Progressive Blacks in ICT (PBICT) argues that abandoning the WOAN risks leaving its original transformation objectives without a credible replacement.
The organisation acknowledges that radio-frequency spectrum cannot remain unused indefinitely, noting it is a scarce national resource.
It says the WOAN emerged as an attempt to lower barriers to entry by creating shared wholesale infrastructure. New and emerging operators could participate without first having to replicate the capital-intensive national infrastructure accumulated by established operators.
As a result, its abandonment cannot simply conclude with the release of its spectrum, according to PBICT.
“A successful WOAN could have materially altered the economics of market entry. A black-owned ECNS licensee in Mthatha, Giyani, Mahikeng or Mbombela could, in principle, have acquired wholesale capacity on transparent terms, and concentrated its capital on connecting communities, developing services and competing for customers, rather than attempting to construct an entire national mobile network.
“The broader opportunity was to create an ecosystem of black-owned ISPs, regional operators, MVNOs and telecommunications enterprises participating in network engineering, fibre deployment, tower infrastructure, software, cyber security and other components of the digital value chain.”
The organisation has called for measurable interventions through a national spectrum and telecommunications transformation framework, involving government, ICASA, industry, black ICT organisations, SMMEs, organised business, labour and academia.
Such a framework, according to the PBICT, must establish measurable interventions for emerging operators, wholesale access, infrastructure sharing, rural and regional networks, black-owned ECNS and ECS licensees, local procurement, access to finance and meaningful participation by women, young people and persons with disabilities.
The PBICT also seeks a substantive review of why the WOAN failed to progress to implementation.
“Our position is that efficiency and transformation cannot be treated as mutually-exclusive objectives. Spectrum can and must be put to productive use, while simultaneously broadening ownership, competition and meaningful economic participation.
“If government has concluded that the WOAN has reached the end of its policy life, it carries a corresponding responsibility to explain what credible instrument will replace its transformation mandate.
“The policy instrument may change, but South Africa's developmental imperative to transform the telecommunications sector cannot.”
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