BEE bloc takes on National Treasury over telecoms tender

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A bloc of interest groups in the ICT sector is demanding National Treasury suspend its tender to procure mobile data and voice services until the spectrum allocation process is completed.

The group says spectrum allocation is critical to the reduction of data prices, which will result in government savings; hence there is no justifiable urgency to procure telecoms services before high-demand spectrum licences are issued.

National Treasury is currently on the market for a service provider of mobile communication services, and this has irked the bloc, which believes the multibillion-rand budget will exclude black-owned entities.

Treasury intends to supply government employees with uncapped data, without applying a fair usage policy.

Vodacom has been government's exclusive supplier of mobile communication services since September 2016 and National Treasury is now searching for a new supplier of services until 2026.

The closing date for applications is 27 November, says Treasury, while the Independent Communications Authority of South Africa (ICASA) will issue the much-awaited spectrum licences in March 2021.

The ICASA licensing process imposes empowerment demands on the successful bidders in the auction process.

The imposition of these empowerment obligations ensures the licensing process becomes a credible empowerment tool that will assist ICASA to achieve the sector’s transformation agenda.

As a result, the ongoing National Treasury process has annoyed the bloc, which is made up of mainly black empowerment interest groups.

Progressive Blacks in ICT (PBICT), Youth Economic Alliance, SA Black Internet Service Providers Association and SA Women in ICT Forum, operating as MzansiWOAN, feels the process is inherently wrong.

The group has since made objection submissions to National Treasury.

The bloc says there are a number important state-led processes under way that affect mobile services in SA, and in turn require National Treasury’s attention and alignment in order to achieve the bigger government objective of transformation of the telecoms sector and address economic injustices of the past.

According to MzansiWOAN, the processes include policy on high-demand spectrum and policy direction on the licensing of the wireless open access network (WOAN).

It says among the demands on these processes is the empowerment of previously disadvantaged individuals, in particular women, youth and persons with disabilities.

“The struggle for opportunities continues and government continues to set land mines for our SMMEs that are trying to access the sector,” says Leon Rolls, PBICT president.

“We are concerned that as ICASA is in the process of finalising the WOAN, you have Treasury releasing this tender for a period of five years instead of one year. This doesn’t show seriousness on the part of government about transformation.”

MzansiWOAN says the current process unfairly excludes its members and it is concerned about the misalignment on various government initiatives related to matters that affect consumption of mobile data and voice services.

Rolls explains further: “The main objective of the WOAN and the new spectrum is to bring down prices and allow for new entries. Entering into a contract before the spectrum is awarded and new entries come into the market is not a very commercially viable decision to make.

“There is no rush or emergency for this contract; it can wait and the state can save millions. Treasury talks about cost saving as we try and recover from the lockdown but they fail to understand this simple logic. Five years is a very long time and billions can be saved, billions that can be channelled to projects like SA Connect.”

National Treasury hadn’t responded to ITWeb’s request for comment by the time of publication.

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