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    Home»Opinion»Duncan McLeod»Free the spectrum

    Free the spectrum

    Duncan McLeod By Editor30 November 2011
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    By Duncan McLeod

    Further hold-ups in migrating from analogue to digital terrestrial television could have profound economic implications for SA and the sub-Saharan African region, new research from a powerful mobile industry lobby group shows. The picture it paints is clear: further delays by policy makers and regulators in freeing up spectrum could cost the region billions of dollars.

    The report, prepared by Plum Consulting and commissioned by the GSM Association, a grouping representing most of the world’s mobile operators, shows that releasing spectrum in the “digital dividend” bands below 900MHz, currently occupied by broadcasters, as well as spectrum in the 2,6GHz band, by 2015 could create up to 27m new jobs, increasing GDP per capita by 5,2% and lifting 40m people out of poverty by 2025.

    In addition, it shows GDP and government tax receipts could increase to US$82bn/year and $18bn/year respectively in the next 14 years. Mobile operators across the region are desperate to get access to the spectrum to deploy next-generation mobile broadband services using technologies like long-term evolution, or LTE, that promise wireless connectivity speeds previously only possible on fixed-line networks. In SA, MTN is champing at the bit to build an LTE network but says it needs to wait for additional spectrum before it can build a nationwide commercial network.

    Because fixed-line penetration in the region is so low, mobile broadband is going to be the way hundreds of millions of people across the continent get online for the first time. Yet countries have been slow to award new spectrum to mobile operators. GSM Association figures show only 80MHz is available for delivering mobile broadband in a typical African market, compared to as much as 400MHz in some developed markets.

    Peter Lyons, the association’s director of spectrum policy in Africa and the Middle East, says if governments in sub-Saharan Africa allocate more spectrum for mobile broadband over a 10-year period from 2015, this will result in $235bn in additional GDP and $50bn in additional tax revenues. However, if the release of spectrum is delayed by five years, then these benefits will fall to $50bn in additional GDP and $10bn in taxes.

    Lyons reckons many markets in the region have set lofty goals to switch off analogue broadcasts within the next few years, but they are underestimating what the process involves. He says there hasn’t been much practical progress to reach their goals.

    This is a problem for mobile operators that have to make multibillion-dollar investment decisions in next-generation networks. The lack of clarity and timelines is holding back investment. One of the challenges is that broadcasters often regard digital migration as what Lyons calls a “zero-sum game” and are not sufficiently motivated to accelerate the shift away from analogue technologies.

    Ultimately, there has to be a “more inclusive discussion” between the mobile and broadcasting industries, Lyons says. Yet it’s seldom that the two sectors meet to discuss the big issues. Governments and regulators need to facilitate that process and ensure the deadlines they’ve set are met. Penalties should be considered.

    In SA, auctioning off of the 2,6GHz band has already been delayed several times. The band was meant to be made available by the end of this year, but it now seems likely an auction will only happen in the first half of 2012 at the earliest. And there’s still no clarity on how access to the digital dividend bands will be made available, just two years before broadcasters are meant to switch off their analogue transmissions.

    The broadcasters say privately there’s no way the country will meet its digital migration targets. The report makes clear the economic implications of not doing so.

    • Duncan McLeod is editor of TechCentral; this column is also published in Financial Mail
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    Duncan McLeod GSMA Icasa Peter Lyons Plum Consulting
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