Vodacom and MTN should not be given any additional exclusive-use broadband spectrum to expand their networks, despite the two operators increasingly running up against network constraints, Telkom said in Pretoria on Wednesday. The remarks have put Telkom on a collision course with its bigger mobile rivals.

Alphonzo Samuels, CEO of Telkom’s wholesale subsidiary Openserve, told a workshop hosted by the department of telecommunications & postal services on the Electronic Communications Amendment Bill that all unassigned “high-demand” spectrum (spectrum ideal for offering broadband) must instead be given to a wholesale open-access network (Woan).

Samuels said this is the best way of breaking the “duopoly” of Vodacom and MTN, which, he said, together control more than 80% of the market in terms of revenue. He said the two companies had an early advantage in getting access to prime radio frequency spectrum, especially in the 900MHz band, and that allocating all unassigned spectrum in the 700MHz, 800MHz, 2.6GHz and 3.5GHz bands to a Woan will help break down the two companies’ dominance.

The Woan, Samuels said, is a “pragmatic instrument to level the playing field”. He suggested there has been “market failure” in the mobile industry.

“We believe we should take competition to the services level, open access to the radio access network infrastructure and make sure the consumer has a choice of the company they wish to subscribe to.”

He cautioned government against a spectrum auction, saying this will serve only the interests of those who can afford to bid — the industry incumbents. “A spectrum auction will not promote competition. They (MTN and Vodacom) will have first-mover advantage compared to the Woan and it will be difficult for new players to enter the market.”

In addition, should spectrum be awarded to operators other than the Woan, this will “jeopardise the success” of the wholesale network.

To ensure the Woan succeeds, government should make it mandatory for other licensed operators to provide access to their high sites “at reasonable pricing”.

Open access

Samuels voiced support for “open access” to the mobile operators’ network facilities, despite vociferous opposition from MTN and Vodacom.

“We embrace the open-access principle and this should be done on a non-discriminatory basis.”

He agreed with Vodacom and MTN that operators should retain currently assigned spectrum, contrary to a suggestion in the bill that this spectrum could be returned at some point.