WOAN plans don't solve SA's spectrum woes
The creation of a wholesale open access network (WOAN) as proposed by government is still "very bad idea" and will likely result in irreversible repercussions.
This is the view expressed by industry analysts sounding off about their concerns following the pronouncement by Cabinet that it has approved the submission of the Electronic Communications Amendment Bill (ECA Bill) to Parliament.
The ECA Bill, which will be tabled in Parliament for consideration and processing, amends the Electronic Communication Act of 2005 to give effect to the policy objectives set out in the National Integrated ICT Policy White Paper.
In essence, the approved Bill clears the way for the following provisions: the introduction and licensing of the proposed monopolistic WOAN, rapid deployment of electronic communications facilities, and measures to reduce infrastructure duplications in the sector.
From the onset, the amendments to the ICT Bill garnered widespread criticism from some stakeholders in the sector. Other issues are that the Bill gives too much power to the minister of telecommunications and postal services, and erodes the power of the Independent Communications Authority of SA.
Despite this, government has remained resolute, stating the amended Bill provides for the transformation of SA into an inclusive, innovative and digital society.
Adrian Schofield, ICT veteran and programme consultant at IITPSA, says: "Opposition to a proposed Bill would never stop this government from going ahead with it, especially if they believe it will secure support from the broader voting pool or from the inner power block that keeps them in office.
"The ANC policy towards ICTs is to control their use instead of facilitating broader access, using terminology that belies their true purpose. Word has been out on the street that 90% of the Bill would be unchanged after the consultation process."
Preparing for WOAN
The South African market has had a spectrum scarcity issue for years now. There have been countless calls to government to provide clarity and fast-track spectrum allocation for the telcos.
There was further worry with the proposed shake-up of the previous policy framework for spectrum allocation in favour of an "open access regime" in the form of the WOAN.
As a result, the telecommunications ministry commissioned the Council for Scientific and Industrial Research (CSIR) to conduct a study to investigate the spectrum needs of a sustainable WOAN and how much would be left over for private companies.
The CSIR study, approved by Cabinet, confirms that a portion of the radio frequency spectrum can be licensed to both WOAN and the industry.
"A monopolistic WOAN remains a very bad idea. The industry proposed a hybrid, largely because they are already operating wholesale services on their current networks and they saw it as a means to unlock the impasse over spectrum allocation," Schofield warns.
Last August, the GSM Association released a report warning countries against implementing a WOAN model. It found WOANs do not deliver on promises to provide better coverage, more competition, or lower prices for consumers, with most failing to get off the ground.
The telecoms industry body cautioned South African government, highlighting that if it goes ahead with its plans, it could have irreversible repercussions and result in a negative impact on the economy.
ICT policy and regulatory expert Charley Lewis is of the view that licensing the WOAN puts SA in the position of forging ahead with an experiment that has no successful precedent anywhere in the world.
"The WOAN could well turn out to be the ill-fated USALs all over again; a noble idea betrayed by policy vacillation, regulatory stasis and implementation failure," he says.
"A wholesale infrastructure provider is not in principle a bad thing, provided it's the outcome of a competitive bidding process, with a licence issued on fair and competitive terms, and expected to play in the marketplace like any other provider, with a similar degree of access to high-demand spectrum, high sites and the like."
Last December, Robert Nkuna, director-general at the telecoms department, said the WOAN is about the sharing of spectrum by industry.
According to him, the WOAN would encourage a sharing model for spectrum allocation as opposed to auctioning the resource to the highest bidder.
Dobek Pater, director at Africa Analysis, says the main concern has been in regards to the WOAN being the only network in the country operating on a large national scale in the so-called high-demand frequencies sub-1GHz and 2.6GHz.
Subsequently, Pater says, the government has modified this approach to allow excess spectrum to be licensed to other operators. However, operators would only be able to apply for this spectrum if they had bought a certain quantity of capacity on the WOAN.
"The government would force private sector operators to buy into the WOAN before they become eligible to be allocated excess spectrum. Without buy-in from the large operators, the WOAN is likely to fail.
"It would make more sense to have the WOAN as a competing network to the large operators with their own spectrum, as is the case being developed in Mexico, rather than have the WOAN as the only network of this nature in the market."
Commenting on whether concerns highlighted by stakeholders had impact on the decision to allocate spectrum to both WOAN and the industry, Pater says probably, although government does not appear to have taken much of this into consideration.
"Spectrum would be allocated to other operators but only to those who have bought into the WOAN. So restrictions are still being put in place by the government as to the allocation of the excess spectrum. Once an operator has bought into the WOAN, there may be little reason to acquire more spectrum, especially if it is going to be allocated through an auction process, which could result in significant amounts of money having to be paid for the spectrum. It also depends on how much spectrum will be left available for allocation to the interested operators."
According to Lewis, it is high time government sorts out the broadcasting digital migration delay so that high-demand spectrum can be made available for the rollout of wireless broadband.
When the country switches to digital terrestrial television (DTT), it will make radio frequency spectrum available, which is currently occupied by analogue services for other broadband and broadcasting services. Mobile operators are eager to see the full implementation of the project, as this will unlock the necessary spectrum they have long been calling for.
After missing the June 2015 deadline set by the International Telecommunication Union for countries to complete the full switch from analogue to DTT, SA's digital migration project has been on the back foot.
"It remains of grave concern that we continue to forge ahead with the implementation of policies that are based on a false separation of telecommunications and audio-visual media. We are dealing with a complex and highly integrated ICT ecosystem, and silo polices and silo legislation is simply destructive," states Lewis.