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WOAN will change status quo in telecoms industry, says minister

Johannesburg, 08 Oct 2020

The wholesale open access network (WOAN) will address past imbalances in South Africa’s telecommunications industry.

So said communications and digital technologies minister Stella Ndabeni-Abrahams during a media briefing this week.

The minister indicated that through the WOAN, government is looking to change the status quo of SA’s telecoms industry and empower previously disadvantaged groups.

In SA, the industry is dominated by mobile operators such as Vodacom and MTN which have, for years, been waiting for the allocation of spectrum from government in order to boost their services.

Last week, the Independent Communications Authority of South Africa (ICASA) released the long-awaited invitation to apply (ITA) for both the international mobile telecommunications (IMT) spectrum, also known as high-demand spectrum, and the WOAN.

The closing date for the IMT spectrum ITA is 28 December 2020, and the WOAN ITA closes on 30 March 2021.

Spectrum combinations

In the policy, the communications minister directs that a portion of unallocated high-demand spectrum must first be assigned to a network category of licensees, known as wholesale open access networks, and the remainder must then be assigned to other eligible licensees.

It also states that preferential treatment must be given to a WOAN concerning the assignment of certain spectrum within the 700MHz, 800MHz and 2 600MHz bands.

A WOAN must be a consortium at least 70% owned by South Africans, that participate voluntarily and comply with the empowerment requirements contemplated in the Electronic Communications Act.

It also stresses a diversity of ownership to ensure the meaningful participation of all entities involved, including SMEs, and to prevent monopolistic behaviour.

The WOAN must also have effective participation by targeted groups, including women, youth and persons with disabilities.

During the media briefing, Ndabeni-Abrahams pointed out that the WOAN seeks to deal with the imbalances of the past and give an opportunity to new entrants in the telecommunications space.

“We are seeing the regulator and the ITA being clear in terms of the empowerment of black people,” she said.

“It is high time that we change the status quo and empower people that must be empowered. We really welcome that bold move by the authority – now the onus is on the BBBEE ICT Sector Council.

“Key to the ITA is the fact that the authority goes to an extent of saying those that will be applying must make sure they meet their level one BBBEE status and that such status must be maintained for the duration of the licence.

“This means if you have gotten spectrum and a licence for 10 years, for 10 years, we expect you to respect that the black people of this country need to be empowered and you must remain on that level one BBBEE status.

“I won’t be surprised if others would want to fight it, but I want to assert that we will stand with the regulator on this one because it is our responsibility to make sure the policies and the regulations that we develop also serve the interest of the public.”

Minister of communications and digital technologies Stella Ndabeni-Abrahams.
Minister of communications and digital technologies Stella Ndabeni-Abrahams.

Achieving transformation goals

Meanwhile, law firm Webber Wentzel notes ICASA took some important considerations into account when finalising the ITAs.

It notes says these include imposing empowerment obligations on successful bidders, requiring them to support the WOAN through procuring, collectively, at least 30% of the WOAN's national capacity on a proportional basis.

Furthermore, the WOAN must fulfil various empowerment obligations to assist ICASA in achieving its transformation agenda for the telecoms sector.

“In order to ensure more telecom operators gain access to this high-demand spectrum, ICASA has created a policy which requires that a portion of unallocated high-demand spectrum be assigned to the WOAN,” says the law firm.

“The WOAN will operate as a single network, built via a consortium, which will sell high-demand spectrum to telecom operators on a wholesale basis.”

ICASA has set aside radio frequency spectrum within the 700MHz, 2 600MHz and 3 500MHz spectrum bands for the WOAN.

Webber Wentzel points out that the WOAN ITA provides for a radio frequency spectrum licence to be issued for the WOAN, which will be valid for a period of 20 years, renewable annually upon payment of a prescribed licence fee.