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Telkom cautions on ICASA’s move to segregate WOAN process

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Three days after the council of the Independent Communications Authority of SA (ICASA) issued the final invitation to apply (ITA) for the International Mobile Telecommunications spectrum, Telkom has once again raised a red flag.

The telco says while it is still studying the ITA, it is “concerned” by the separation of the publication of the ITAs and the reasons given by ICASA to separate the licensing process of the wholesale open access network (WOAN).

Announcing the new licensing roadmap on Friday, ICASA said it had resolved to separate the auction of high-demand spectrum and the licensing of the WOAN.

ICASA said the spectrum set aside for the WOAN will be licensed in due course, following engagements with the relevant stakeholders.

In response, Dr Siyabonga Mahlangu, Telkom group executive: regulatory affairs and government relations, says the licensing of the WOAN is intertwined with, and has a bearing on, the current licensing process.

“We hope that a further reading of the published ITA will reflect that the ITA has been designed to substantively deliver much-needed competition in the sector and lower prices for consumers,” says Mahlangu.

“ICASA has a duty to use the consultation process to design ITAs that promote competition, attract foreign direct investment and set South Africa up to participate effectively in the digital economy.”

In the current economic climate, the licensing is an opportunity to drive economic activity, he adds.

“The expected yield of R8 billion from the licensing process should be an enabler for further economic growth.”

Telkom was among the first operators to challenge the regulator’s previous spectrum allocation process, which was subsequently halted with a court order on 15 September.

Despite Telkom’s current “concerns” with the latest ITA, Mahlangu notes the telco is confident of its ability to meet the timelines.

Siyabonga Mahlangu, Telkom group executive of regulatory affairs and government relations.
Siyabonga Mahlangu, Telkom group executive of regulatory affairs and government relations.

“The timing of the publication of the ITA, though consistent with ICASA's previous action, is unfortunate and places pressure on a very important process,” he says.

With the latest licensing process, the regulator says applications for the spectrum are due no later than 16h00 on 31 January 2022, while the announcement of qualifying bids and the commencement of the actual auction has been scheduled for 21 February 2022 and 8 March 2022, respectively.

Douglas Craigie Stevenson, Cell C CEO, has also commented on the latest development: “Cell C notes ICASA has indicated that the auction design (in the ITA) will make provision for spectrum-sharing, which is an important step for the industry.

“The telecoms value chain has evolved to the point that regulations must consider a more complex market structure and a new set of business models, whilst ensuring the efficient use of network infrastructure.

“The deployment of high-demand spectrum is a catalyst to infrastructure investment; it will stimulate much-needed economic growth in our country and speed up the introduction of next-generation technologies which will address the digital divide.”

Vodacom says: “Vodacom welcomes ICASA expediting the permanent assignment of high-demand spectrum with the latest ITA, and trust this will go a long way to improving digital inclusion in South Africa. We are currently in the process of analysing the ITA, and will comment in due course.”

MTN hadn’t responded to ITWeb’s requests for comment by the time of publication.

Douglas Craigie Stevenson, Cell C CEO.
Douglas Craigie Stevenson, Cell C CEO.

ICASA published the ITA in the Government Gazette on Friday, saying it aims to ensure the realisation of many of the key policy objectives originally identified in the SA Connect Broadband policy, particularly as regards the provision of universal and affordable broadband services for all South Africans.

Also, in framing the current ITA, ICASA said, it considered the issues raised by stakeholders in their challenge to the previous licensing processes (particularly the 2020 ITA), as well as the representations received to the first and second information memorandum.

In addressing competition concerns that led to the protracted litigation process, ICASA said it now provided for the auction design (in the ITA) to include, among other provisions, spectrum floors and spectrum caps, the opt-in round, and spectrum-sharing provisions.

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