Spectrum auction spurs far-reaching reform for economy, jobs

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President Cyril Ramaphosa and communications minister Khumbudzo Ntshavheni have emphasised the fulfilment of social obligations by telecoms operators now that the spectrum auction has been concluded.

Telecoms regulator the Independent Communications Authority of South Africa (ICASA) last week confirmed the “successful” conclusion of the long-overdue high-demand radio frequency spectrum auction, saying the process has netted the national fiscus R14.4 billion.

As part of the licensing conditions, the successful bidders are obligated to fulfil certain social responsibilities and obligations, such as connecting unconnected citizens and public institutions within a stipulated timeframe, as previously stated by the communications minister.

In his weekly newsletter this morning, Ramaphosa says the conclusion of the spectrum auction is a significant milestone in government’s economic reformagenda.

He points out the licensing of the new spectrum is accompanied by agreed social obligations to connect public schools, health facilities and police stations over the next three years.

Says the president: “Like the mineral wealth that lies beneath our soil, radio spectrum is a valuable national resource that needs to be used for the benefit of all South Africans.”

Likewise, Ntshavheni points out the value of licensing spectrum does not only lie in the amount raised for the national fiscus, but the impact it will have on the country’s socio-economic development.

In a statement, the minister says her department, ICASA and the successful bidders will speedily finalise the 36-month implementation plans for the connection of 18 520 public schools, 5 731 public health facilities, 8 241 offices of traditional authorities and 1 154 police stations.

In addition, the availability of the spectrum will increase the pace of rollout of connectivity in areas that do not have access to networks, where communities still have to travel a distance to just make a call, let alone receive an e-mail, Ntshavheni comments.

“The provision of both private and public services will also improve as the country will have an opportunity to use digital technologies in a way that improves efficiency, productivity and access.”

The auction process, described as a historic moment in the telecoms industry, marked the first time in 17 years that spectrum has been released on a permanent basis in SA.

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

South Africa was one of the few African countries that had not allocated 4G/LTE spectrum. This forced local operators to improvise with spectrum re-farming and carrier aggregation.

With the successful spectrum auction, it is expected SA’s mobile operators will be able to expand next-generation technologies such as 5G, while it will also result in the cost of mobile data going down.

Ramaphosa notes the delay in releasing spectrum was due to policy drift, state incapacity and vested interests that were a feature of the era of state capture.

Now that the process has been completed, mobile operators will be able to use the spectrum for the rollout of 5G networks, he emphasises.

“These 5G networks will accelerate the process towards universal connectivity – where all South Africans are connected – and the deployment of the digital technologies and services that are driving the fourth industrial revolution. This is a crucial step to bring SA back to the cutting-edge of digital technology and ensure our economy remains competitive.”

Ntshavheni adds: “We look forward to continuing to work with the ICT sector in general to take full advantage of the opportunities opening in the digital economy. The licensing of this spectrum is just a beginning, as we work towards the full deployment of 5G and other next-generation networks in a manner that is transformative of both the content of our economy and its ownership.”

Ongoing pricing battle

Among the noted benefits associated with the release of spectrum are reduced costs of data and voice communications.

South Africans have, in the past, been vocal about the high cost to communicate. In 2016, South Africans took to social media to express their frustrations with local mobile operators, resulting in the #DataMustFall movement receiving widespread media attention and attracting Parliament’s notice.

Furthermore, the Competition Commission (CompCom) data services market inquiry in December 2019found the cost of data in SA was considerably higher than in many other countries. The CompCom recommended that telcos reduce data costs and instructed the leading operators, MTN and Vodacom, to cut their mobile data pricing by half.

Ntshavheni notes government remains committed to lowering the cost to communicate.

According to Ramaphosa, the spectrum release is expected to reduce the cost of mobile data, expand network reach to rural and outlying areas and improve network quality.

Every South African who uses a mobile device will feel the benefits of this reform, especially the poor and those who currently don’t access the internet due to high costs or lack of coverage, he says.

“Expanding digital access is critical for economic growth. Cheaper data means young people will have greater access to digital platforms to seek job opportunities online. Students will be able to access information and educational materials. Entrepreneurs will be able to start businesses and reach new markets.

“Equally, the availability of this spectrum will contribute to economic transformation. It will allow many more people, especially those from remote areas and poor communities, to access digital resources and will improve their ability to participate in economic activity.

“We are determined that SA must not be left behind by the digital economy, just as we are determined that no community and no person should be left behind in experiencing the vast benefits of being digitally connected to the world,” he concludes.

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