The news this week, first reported by TechCentral, that government has again kicked the spectrum licensing can down the road by deferring a policy direction to communications regulator Icasa to sometime after the election is further evidence that it isn’t taking the needs of the sector seriously enough.
Stella Ndabeni-Abrahams, the communications minister, said on Wednesday that she had “deemed it necessary” to “hold the policy direction on unassigned high-demand spectrum in abeyance for consideration in the sixth administration”. In other words, after promising it would be released by no later than 30 April, it will now only be published at some undetermined date in the future. This is a big problem, for several reasons.
Firstly, we don’t know if Ndabeni-Abrahams will be reappointed as communications minister after the election. Even if the ANC wins a majority – a likely outcome, based on polling data – there’s no guarantee President Cyril Ramaphosa will keep her in the portfolio after 8 May. And if she doesn’t stay, it could take her successor many months to get on top of the complex issues.
Secondly, regulators, especially the Competition Commission, are increasingly looking to impose controls on the industry to resolve problems (read: high data prices) that, at their core, are policy related, not the result of “market failure”, that hoary chestnut favoured by politicians like economic development minister Ebrahim Patel.
Thirdly, the operators simply can’t afford to wait any longer for spectrum licensing to take place. The big companies are already being forced to build more base stations in the cities to compensate for the lack of additional spectrum. This costs money (a lot of money), which will be passed on one way or another to consumers. And if South Africa is not going to lag in the roll-out of next-generation 5G services — never mind having any hope of pioneering in this area — they need 5G-specific spectrum to be licensed soon (this year).
Ridiculous
The situation has become ridiculous, and that’s putting it mildly. Though the operators have rolled out 4G/LTE networks, government, through Icasa, has never actually licensed spectrum to allow them to do this. This should have happened at least eight years ago already. To build 4G, the three incumbents — Vodacom, MTN and Cell C — have been forced to reallocate their 2G and 3G spectrum assignments. This is no mean feat as they’ve had to continue to support a large, legacy 2G user base — people using basic phones that can only make calls and send text messages — while retooling some of that spectrum for demanding smartphone users and for data-hungry (and spectrum-draining) fixed-line replacement services.
What’s particularly disappointing, and surprising, about Ndabeni-Abrahams’ decision not to issue a policy direction to Icasa by her own deadline is that it comes on the back of an apparent sense of urgency from Ramaphosa and his finance minister, Tito Mboweni, about the importance of getting it done.
As far back as September last year, Ramaphosa — a former chairman of MTN Group — said government would accelerate the licensing of spectrum in the 700MHz, 800MHz and 2.6GHz bands to “hasten the growth of mobile communications”. Then, in the budget speech in February this year, Mboweni said he would “work relentlessly” with Ndabeni-Abrahams to ensure additional spectrum was allocated to operators as soon as possible.
This stuff is not rocket science, but it is now extremely urgent. What is taking so long? Is government trying to include so many conditions and requirements in the policy direction to Icasa that it’s twisting itself in a knot? One can only speculate, but national treasury no doubt wants to maximise revenue for the fiscus. A spectrum auction to the highest bidders will ensure this happens. Perhaps other arms of national government don’t agree on the approach. Whatever’s happening, it’s time to end the paralysis.
Then there’s the slow-motion train wreck of digital television migration, a project that is inextricably linked to spectrum allocation. Migration should be been completed many years ago, but the government seems singularly incapable of running a project of this magnitude. The entire thing should probably be handed over to the private sector, led by the broadcasters (with the help of the telecoms sector), with a firm deadline set (perhaps a year), after which analogue broadcasts will be terminated (with no possibility whatsoever of any further slippage).
Allocating the “digital dividend” bands currently occupied by the SABC and e.tv to the mobile operators is one of the most important steps government and Icasa can do in bringing down the cost to communicate. These bands will allow operators to roll out 4G services more cheaply, and to extend meaningful coverage to more South Africans. Doing so would have a far bigger impact on data prices than any efforts by the competition regulator to meddle in the industry. But then regulators like to regulate. It’s all they do.
It’s easy to become despondent about this week’s latest setback (of many setbacks) in the spectrum licensing process. It’s also deeply disappointing that the government, despite promises from the president on down, doesn’t seem to genuinely understand the real urgency here. I hope there’s swift action immediately after the new administration is formed following the election. Based on past performance, though, I won’t be holding my breath. — (c) 2019 NewsCentral Media
- Duncan McLeod is editor of TechCentral