Communications regulator Icasa this week defended its plan to require successful bidders in South Africa’s 2021 spectrum auction to support a minimum of three black-controlled mobile virtual network operators (MVNOs) amid industry criticism of the idea.
An MVNO — examples of these include the recently launch PnP Mobile from Pick n Pay (the first to piggyback on MTN South Africa) and FNB Connect from First National Bank (on Cell C) — utilises the network of an established network operator to provide own-branded mobile services to its client base.
In Icasa’s long-awaited “reasons document” for the invitation to apply to participate in the upcoming spectrum auction, published on Friday, it’s clear that there is opposition to the MVNO idea from many quarters, including those interested in investing in the planned wholesale open-access network (Woan). The Woan is a government-led idea, but set to be backed by private-sector investors, to foster more service-based competition in the South African mobile market.
MTN, in a submission to the regulator, recommended that all MVNO access obligations be removed from successful spectrum licensees, while Cell C said it doesn’t make sense for the MVNO obligation to be imposed on licensees. Vodacom Group CEO Shameel Joosub previously advised caution on the subject, too, as it could undermine the business case of the Woan.
Telkom is of a similar view in its submission to Icasa, saying MVNOs will be important customers for the Woan and that Icasa’s obligations in this regard could undermine the new network’s viability.
Not good for the Woan
Remgro-controlled CIVH — the parent company of Dark Fibre Africa and Vumatel, and a company known to be keen to invest in the Woan — said the three-MVNO requirement could reduce demand for the Woan’s capacity. CIVH said the obligation should simply be lifted.
The Competition Commission, in its submission to Icasa, also said the obligation for operators to carry three MVNOs could work against the business case of the Woan. The commission said that instead of committing to a number of MVNOs, spectrum licensees should rather commit to a standard MVNO agreement under which the maximum wholesale rate per gigabyte is at a discount to the average retail rate paid by consumers and that this should apply to all spectrum licensees in all spectrum bands being auctioned.
However, Icasa has defended the three-MVNO obligation, saying in its reasons document that it is mandated to promote transformation in the ICT sector. “It is the authority’s view that requiring the industry to support MVNOs will build a potential market for MVNOs,” it said. — (c) 2020 NewsCentral Media
