Spectrum stalemate jeopardises SA’s growth, warn analysts
As the bickering between the telecoms regulator and the telcos over spectrum continues, analysts and industry insiders warn that government’s developmental agenda may be derailed, as key plans for the fourth industrial revolution (4IR) are in jeopardy.
This follows news that the Independent Communications Authority of South Africa (ICASA) failed to reach an out of court agreement in the ongoing spectrum impasse. Resultantly, the regulator will now set aside its earlier decision to invite applications for high-demand spectrum licences, as ordered by the court.
There has been a strong reaction from the telecoms sector, with some saying the latest developments are another “eye roll and huge sigh moment” with broader implications for the country’s developmental agenda.
Key among the government plans that analysts warn will be impacted by ever-more prolonged spectrum squabbles is the 4IR plan, for which the blueprint was gazetted in October last year. Government’s 4IR strategy is in part underpinned by availing data to enable innovation, which will now be delayed further by the spectrum impasse.
4.0 put on ice
Independent telecoms analyst Spiwe Chireka says: “One of the key implications that comes to mind is the presidential commission on 4IR report, a wonderful document that is supposed to kick-off the country's move to 4IR. Now, an underlying requirement for any of the recommendations in the report to become something useful is connectivity infrastructure, in particular mobile connectivity infrastructure.
“We have also learned that one of the biggest enablers of 4IR is 5G. So right now, there is a possible risk that all these strategies and plans coming out of government and the private sector on the back of the commission's requirements will end up gathering dust while the fundamental sector, which is telecoms, gets its act together.
“There are also other ramifications of South Africa lagging behind with regards to our digitisation, cost of services and technology leadership, among other things.”
Zahir Williams, chief legal officer at Cell C, says: “Much has been said about economic development opportunities arising from the 4IR, but we need to keep in mind that additional spectrum is key to enabling such development.
“5G has a major role to play in driving 4IR, but without spectrum, the rate of progress will be painfully slow. Given the slow pace of development of the economy in general, it is in the country’s interests for growth opportunities to be accelerated and that spectrum allocation is viewed in this economic context.”
He says Cell C is looking forward to a non-contentious, efficient and transparent process that will timeously lead to the assignment of high-demand spectrum.
Ofentse Dazela, director for pricing research at Africa Analysis, says the continuous bickering between the regulator and telcos is a “real blow” to the telecoms industry.
“The current situation paints a different picture that says we are heading to a chaotic future, likely to be characterised by poor network quality, increasing data prices and long litigation battles among the warring factions.
“At this point, one is really struggling to unmask the real agenda at play here, considering that operators have been calling for the release of additional spectrum for years, as this will not only lower communication costs, but will unlock growth in the telecoms sector. It is ironic that the very same operators are now refusing to compromise for the benefit of consumers they claim to have their interests at heart.”
Beacon of hope
According to Dazela, ICASA’s move to comply with an order that set aside its decision to publish the invitations to apply for high-demand spectrum licences and for a licence to operate a wholesale open access network implies the courts will now need to step in and guide the planned spectrum auction process to its conclusion.
Meanwhile, some telcos, like Vodacom, feel let down by ICASA’s decision. Vodacom spokesperson Byron Kennedy says: “Unfortunately, the biggest loser here is the South African consumer. We are extremely disappointed that this fourth attempt to license high-demand spectrum in the last decade has failed, considering we did our utmost to try and find a middle ground so that the spectrum auction could progress.
“Vodacom remains ready and willing to work with both ICASA and the minister to expedite the assignment of high-demand spectrum as soon as possible. As we have said previously, the award of new spectrum remains a critical part of reducing input costs and by extension the cost of data.
“We encourage all industry players to join Vodacom in working with government to find a solution that results in all mobile consumers finally experiencing the full benefit of South Africa’s national spectrum assets. This has the potential to have an unprecedented positive impact on our fragile economy.”
MTN says it noted ICASA’s statement and is reviewing the content and the potential implications.