Vodacom Group CEO Shameel Joosub says the deadlock over the spectrum auction could lead to another year of cost to the economy and called for the matter to be resolved urgently.
Vodacom and rival Rain this week joined MTN in opposing Telkom’s application for an urgent interdict to stop the regulator, the Independent Communications Authority of SA (Icasa), from proceeding with the radio frequency spectrum auction.
“The fact that it is back in court is highly disappointing,” Joosub said.
“These ongoing delays are holding South Africa’s development back and come at a time when the need for additional spectrum is getting increasingly desperate. It’s no secret that telecommunications infrastructure is key to the growth of any economy. This latest impasse needs to be resolved urgently or another year of economic opportunity will be lost.”
Zahir Williams, Cell C’s chief legal officer said the company “is consulting its lawyers and has reserved its rights to oppose Telkom’s interdict application”.
Regulators across the world are auctioning spectrum, a finite resource that is key to the rollout of superfast technologies and bringing broadband to rural areas. Designated according to frequency band, spectrum is used to provide services such as broadcasting, mobile-phone networks, fixed telecommunications, satellite broadcasting, short wave radio services, aviation and defence.
Icasa is auctioning spectrum covering bands from 700MHz to 3,500MHz.
Mobile network operators are in desperate need of ultra-high frequency (UHF) spectrum in the 700MHz-800MHz band, which offers superior geographic coverage and is vital in connecting rural communities.
However, this band is occupied by broadcasters, who are migrating from an analogue platform to digital. That’s also been delayed more than five years after SA missed a June 2015 deadline set by the International Telecommunications Union (ITU) to switch off the analogue signal.
These ongoing delays are holding South Africa’s development back and come at a time when the need for additional spectrum is getting increasingly desperate
— Vodacom CEO Shameel Joosub
A key aspects of Telkom’s argument in seeking to delay the spectrum auction is that broadcasters still occupy the 700MHz-800MHz band, and any successful bidder would not have immediate access to it. E.tv has brought a separate court action against Icasa in which it argues it cannot share spectrum with mobile operators.
That was among the issues which led to Telkom and other mobile operators heading to the courts to force Icasa to withdraw a previous invitation to apply (ITA) for spectrum early last year.
The other issue is the lack of clarity about the licensing of a wireless open access network (Woan), which is intended to bring new entrants to the market. Icasa has since suspended the timelines relating to the licensing of the Woan so that it can conclude the consultation process for spectrum licensing.
Telkom, says it has had to go back to court after it emerged that Icasa had once again included the spectrum currently occupied by broadcasters in the planned auction, which is supposed to be held by the end of March.
Siyabonga Mahlangu, Telkom’s group executive for regulatory affairs and government relations, said last week that the ITA in its current form will restrict the company to bidding for a limited amount of frequency — a total of 42MHz — which would jeopardise its ability to compete.
Mahlangu cited an ITU guideline that mobile network operators need 80MHz to 100MHz of continuous spectrum to offer 5G services. Telkom would need about an additional 62MHz to meet the ITU minimum to offer 5G services, which it might not be able to achieve given the structure of the allocation at present.
Mahlangu said that in issuing the latest ITA, Icasa “unduly prioritised speed above a fair and objective process”.
In its court papers Telkom says it is the only mobile infrastructure competitor to Vodacom and MTN; Cell C had decided to decommission its sites and exit infrastructure-based competition. Cell C has been roaming on MTN’s network and had made its spectrum available to the company, Telkom said.
As for Rain, Telkom said: “At the infrastructure level, Rain is not a competitor to Vodacom, but it is a provider of additional spectrum capacity to Vodacom. This is relevant to the implications of the licensing of spectrum on infrastructure-based competition in the mobile market.”
Due to the delays in allocating the spectrum, in 2018 Vodacom entered into an agreement to lease Rain’s spectrum and is now using it to extend its coverage and ease congestion on its network.
Rain, which offers data services, is also leasing some of Vodacom's network towers. Telkom has previously raised concerns about the partnership, saying that it entrenches Vodacom as a dominant player. It has since referred the arrangements between Rain and Vodacom to the Competition Tribunal for adjudication.
According to Telkom’s affidavit, Liquid Intelligent Technologies has exploited its radio frequency spectrum to only a limited degree. “What is relevant to this application is that Liquid, like Rain, has opted to enter into wholesale spectrum arrangements that benefit Vodacom and MTN respectively,” it said.
For now, Vodacom is only opposing Telkom’s urgent interdict to stop the auction, but it said it is considering its options regarding the other parts of Telkom’s legal challenge against Icasa, which deal with issues such as the terms of auction and the inclusion of the spectrum that is being used by broadcasters.
Business Leadership SA CEO Busi Mavuso said this week that the legal challenge “is unfortunate because litigation creates risks of delays to the auction process, but we fully support all parties ensuring their rights are protected. It is important that Icasa conducts a process that is beyond reproach.”
Mavuso said that if the court challenge resulted in another delay in the spectrum auction, “it will take longer for SA’s telecoms sector to become internationally competitive, while consumers continue to pay higher costs for data”.
While the cost of these delays for the economy was impossible to quantify, Mavuso said much of it was measured in lost opportunity: limited bandwidth availability barred telecoms companies from pursuing 5G technologies, for example, while for consumers the elevated data costs ate into disposable incomes.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.