The slow pace at which African countries, including SA, are moving to digital terrestrial television could have serious economic implications in the next few years. It could cost the continent significant economic growth.
That’s the view of Peter Lyons, director of market development and spectrum policy at the GSM Association, an industry body that represents mobile operators. He says dealing with spectrum challenges should be the top telecommunications policy issue across the continent.
Already, broadcasters in SA are warning that it is highly unlikely that the country will meet the targets set by the department of communications to switch off analogue broadcasts by the end of 2013. Migration will open up big chunks of valuable spectrum that can be used by telecoms operators to provide next-generation wireless broadband services, including into rural areas and smaller towns that are currently poorly served by modern communications infrastructure.
“This is going to be a very big issue because ultimately time is money and the longer investment capital is sitting on the sidelines and is not being used to build networks, that’s time these countries are not reaping the socioeconomic benefits connectivity can bring,” Lyons says.
He says there is a significant “opportunity cost” in delaying migration and freeing up the so-called “digital dividend spectrum” in bands below 900MHz.
“The stakes are very high across Africa, and in SA,” Lyons says. “The priority now should be on job creation. The mobile industry accounts for 5,5m jobs across Africa, and that is only set to increase as penetration rises.”
He says the GSM Association will release research later this month that clearly articulates the opportunity cost — jobs that are not created and economic growth that is not realised — of not moving quickly to free up the digital dividend.
Delaying migration and failing to allocate spectrum that is freed up appropriately would hurt consumers and operators, he adds.
GSM Association research shows that countries across Africa, on average, have allocated substantially less spectrum to telecoms operators than peers in other parts of the emerging world. He points to the examples of SA and Mexico. SA has released 204MHz to telecoms providers whereas Mexico has made 360MHz available.
And few countries in Africa have made lower frequency bands available, yet this spectrum, Lyons says, is the most important for trying to bridge the digital divide. Frequencies below 900MHz are much better suited to providing wireless services in rural areas because signals are able to travel further from base stations, reducing the cost of network deployment.
Lyons blames administrative delays for the slow pace at which African countries allocate spectrum to operators. Government departments and independent regulators often don’t have the “institutional capacity” to manage things like spectrum auctions. “It’s a challenging process that requires a lot of institutional capacity that is not available in many countries.”
Though SA is better placed than many other African countries, it has “systemic political issues” that are holding back spectrum allocation.
He says there is a “circular loop” in SA, where issues are bounced back and forth between the department of communications, the Independent Communications Authority of SA (Icasa) and parliament. “It gets stuck in this cycle that keeps things from moving forward and that probably comes from the fact that Icasa and the department and parliament are not communicating as closely on some of these issues as they should. Sometimes they are not aware of what the other is doing.”
He points to the example of Icasa’s plans to license spectrum in the 2,6GHz band in 2010. He says that in meetings he has held with Icasa, the regulatory authority has said it expects to proceed with a spectrum auction in April 2012.
However, in follow-up meeting with government, Lyons was told that this was “ quite impossible” because the department of communications would only release a policy directive to Icasa in April 2012 dealing specifically with the issue and that there would still have to be a public consultation process after that.
“Rather than there being a realistic hope of spectrum licensing in April 2012, it’s more likely not going to happen before the end of 2012, or early 2013,” Lyons says. “This creates a huge problem for the mobile operators to roll out their networks.
“Mobile operators don’t even have clarity as to whether they will be able to participate in auctions because of [black economic empowerment rules] and they don’t know how it’s going to be allocated — through an auction or beauty contest — and investors and operators need to have some idea before they commit to investing billions of rand.”
He says this “opaque” situation is harming investment potential in SA’s telecoms industry. — Duncan McLeod, TechCentral
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