Government not backing down on WOAN plans

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Communications and digital technologies minister Stella Ndabeni-Abrahams.
Communications and digital technologies minister Stella Ndabeni-Abrahams.

Government has reiterated its support for the licensing of a wholesale open access network (WOAN) as a way to promote “healthy” competition in the country’s ICT sector.

This is according to minister of communications and digital technologies Stella Ndabeni-Abrahams’s reply to a Parliamentary question posed by MP and IFP member Zandile Majozi.

In her reply, Ndabeni-Abrahams emphasises the deployment of a WOAN will encourage licensees to work together as far as it is practicable.

“The value of sharing and collaboration between licensees is that it will result in the more effective use of spectrum,” she states.

“Government fully supports this as a means to meet the public policy objectives. Therefore, high-demand spectrum will be assigned to a WOAN, as a shared approach to spectrum use, and the remaining high-demand spectrum will be assigned to other electronic communications network service licensees.”

The proposal to establish a WOAN first came to light in the 2016 ICT white paper and more recently in the policy directive to the Independent Communications Authority of South Africa (ICASA) issued by Ndabeni-Abrahams.

The administration has identified it as an important policy instrument to improve the ownership of the ICT sector by historically disadvantaged individuals.

As a result, in the policy issued to ICASA, Ndabeni-Abrahams directs that high-demand spectrum must first be assigned to a network category of licensees, known as WOAN, and the remainder must then be assigned to other eligible licensees.

According to the minister, government recognises there are over 400 players that hold electronic communications network service licences but cannot access spectrum, due to its scarcity.

“This has an adverse effect on competition, contributes to the high cost to communicate and serves as a barrier to entry for new entrants and SMMEs,” states the policy document. “Government is committed to maximising the socio-economic benefits derived from the use of the spectrum and recognises that a shared approach to spectrum use is necessary.”

While government is adamant on its plans to establish a WOAN, the jury is still out about the feasibility of such a model in South Africa.

Industry bodies like the GSMA have also cautioned about the implementation of WOAN models, noting they do not deliver on promises to provide better coverage, more competition, or lower prices for consumers, with most failing to get off the ground.

Commenting on whether a WOAN can work in SA, Sabelo Dlamini, senior research and consulting manager at IDC, believes the chances are very slim.

“We have seen the model failing in several countries. Revenues from the spectrum alone will not be able to sustain the WOAN. There is a need for buy-in from industry players in developing long-term agreements with the entity to be successful.”

Dlamini is of the view that full support from incumbent operators is required, and the well-developed structure operational model of the entity will also help.

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