The Cabinet has put on hold South Africa’s plan to license the wholesale open access network (WOAN).
In a statement today, Cabinet says it approved the amendment of the policy on high-demand spectrum and the policy direction on the licensing of a WOAN to be published for public comment.
“The proposed amendments remove the requirements to license the WOAN,” says Cabinet.
The statement adds that Cabinet had in 2019 approved this policy on high-demand spectrum and the policy direction on the licensing of a WOAN to give effect to the Electronic Communications Act, 2005 (Act 36 of 2005).
“The licensing of high-demand spectrum remains critical to the country’s economic recovery drive,” it says.
The move comes after telecoms regulator the Independent Communications Authority of South Africa (ICASA) in November last year said it was reviewing the timelines relating to the licensing of the WOAN.
However, the move was slammed by industry bodies such as the ICT SMME Chamber, which said ICASA’s decision to change direction in regards to licensing of the WOAN was “inconsistent” with the policy directive on spectrum licensing.
In making this decision, ICASA has also “gone beyond its powers”, it said.
Amid the backlash, briefing Parliament’s Portfolio Committee on Communications last year, ICASA chairperson Dr Keabetswe Modimoeng reassured MPs of the regulator’s commitment to the WOAN.
A WOAN would operate as a single network, built via a consortium, which will sell high-demand spectrum to telecoms operators on a wholesale basis.
Government believes the WOAN will enable more competition in the telecoms market that will result in data prices coming down.
According to ICASA, applicants for the WOAN licence must be at least 70% owned by South African citizens and at least 50% black-owned. It must also be at least 20% owned by black women.
ICASA set aside radio frequency spectrum within the 700MHz, 2 600MHz and 3 500MHz spectrum bands for the WOAN.
The WOAN invitation to apply provides for a radio frequency spectrum licence to be issued for the WOAN, which will be valid for a period of 20 years, renewable annually on payment of a prescribed licence fee.
ICASA also imposed empowerment obligations on successful spectrum bidders, requiring them to support the WOAN through procuring, collectively, at least 30% of the WOAN’s national capacity on a proportional basis.
However, the concept of the WOAN has been met with some scepticism after failing to bear fruit in some countries, such as Mexico, where it has been implemented.
Industry bodies like the GSM Association 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.
Meanwhile, Cabinet has congratulated ICASA for the commencement of the auction of the high-demand radio frequency spectrum, despite the ongoing litigations.
This week the regulator commenced with the opt-In phase of the auction process in line with its commitment to the licensing of high-demand spectrum.
The first round of the auction was won by Rain Networks and Telkom although the latter is suing the telecoms regulator over the spectrum auction process.
The main auction is set for 10 March.
The spectrum court case pitting ICASA and Telkom is set to be heard in April. Among Telkom’s qualms in the court case is lack of clarity on the WOAN invitation to apply, which the telecoms company said had not been published.
Cabinet also congratulated the bidders who participated in the auction, which, it says, shows the intent by the telecommunications industry to continue investing in the digital infrastructure in South Africa.
“Government remains committed to creating an enabling environment for radio spectrum to be used optimally, not only by the telecommunications industries but also to benefit the economy and society,” Cabinet says.
It adds that the licensing of high-demand radio spectrum will improve the ability of mobile telecommunications operators to build robust telecommunications with greater penetration and reach.
“Great benefits of this long-awaited process include the reduction of the costs of data and voice communication. The spectrum is also expected to contribute to economic transformation in the various sectors and the proceeds of the auction will inject over R8 billion into the national fiscus,” Cabinet notes.
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