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SA's overdue spectrum auction to ‘unlock’ digital economy

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South Africa's long-overdue high-demand spectrum auction will unlock economic opportunities in the digital economy.

So says Boyce Maneli, chairperson of Parliament’s Portfolio Committee on Communications, speaking ahead of the much-anticipated and long-awaited auction.

The Independent Communication Authority of South Africa (ICASA) said yesterday it is ready to auction the International Mobile Telecommunications (IMT) spectrum – also known as high-demand spectrum – indicating this will get under way today, 8 March.

This, after a wave of legal challenges hampered the timely release of the scarce resource, with some mobile operators being at odds with ICASA over its roadmap to license spectrum.

Maneli, who chairs the committee responsible for oversight of the communications ministry and its entities, has wished ICASA well in its efforts to finally license the high-demand spectrum.

“Although long overdue, the auctioning has come at the right time, when the Department of Communications and Digital Technologies is also finalising the analogue TV transmitter switch-off in order to migrate to digital.”

The chairperson states the two projects − digital migration and the spectrum auction − are important not only in regards to the envisaged lower cost to communicate, but also because the spectrum will potentially bring in more content creators, whereas digital transmission will widen the broadcasting platform.

According to Maneli, the committee will afford ICASA the space to do its work uninterrupted throughout the auction phases.

The country’s spectrum allocation has been up in the air for a number of years, with the last significant spectrum awarded 16 years ago.

The allocation of IMT spectrum by means of an auction is key among the South African government’s economic structural reforms, as the state looks to boost the fiscus. It’s expected the national fiscus will benefit in excess of R8 billion from the proceeds of the auction.

For mobile operators, the last big set of spectrum issued was in the 2.1GHz band, which helped the operators in their 3G network deployment.

Unlike its African counterparts, South Africa is one of the few countries that have not allocated 4G/LTE spectrum on the continent. This has forced local operators to improvise with spectrum re-farming and carrier aggregation.

Boyce Maneli, chairperson of Parliament’s Portfolio Committee on Communications.
Boyce Maneli, chairperson of Parliament’s Portfolio Committee on Communications.

Access to high‐demand spectrum will help mobile operators provide faster and more widespread high-speed data services. On the consumer front, it would mean making affordable data available to firms and households.

The continued delays in allocating spectrum had been criticised by many, including president Cyril Ramaphosa, who lamented the slow pace of auctioning the spectrum during his State of the Nation Address (SONA) last month.

During the SONA, Ramaphosa pointed out that innovation is being held back by a scarcity of broadband spectrum, and companies are reluctant to invest, which stifles the economy.

Communications minister Khumbudzo Ntshavheni last month also acknowledged the country’s long journey to allocate spectrum, saying government looks forward to the positive benefits associated with release of spectrum, which include reduced costs of data and voice communications.

Ntshavheni said at the time: “This spectrum is expected to unlock economic transformation not only for the telecommunications sector but to service other industries such as mining, agriculture and manufacturing.

“We expect industry growth of between R4 billion and R6 billion in 2023. We are also working on a radio frequency spectrum policy for embedding 5G network and preparations for advances to sixth- and seventh-generation networks. This will allow us to prescribe minimum data to the home because data has become the new utility, like water and electricity, that our home needs.”

Telecoms regulator ICASA’s licensing process will make radio frequency spectrum in the 700MHz, 800MHz, 2 600MHz and 3 500MHz bands available.

The regulator will kick-off this official process with the “opt-in auction” as of today, 8 March.

The opt-in auction consists of a single bidding round where eligible bidders may submit bids to achieve a minimum spectrum portfolio.

The main auction will start on 10 March and will be conducted using an online auction platform, according to ICASA.

It states that all six qualified bidders will be eligible to bid for spectrum in this stage. Bidding is normally scheduled on business days between 09h00 and 17h00.

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