ICASA to auction spectrum despite lack of broadband white paper

July 18th, 2016, Published in Articles: EngineerIT


On 15 July 2016 the Independent Communications Authority of South Africa ( ICASA) issued an invitation in the Government Gazette (no 40145) for a radio frequency spectrum licence to provide mobile broad band wireless services for urban and rural areas. This despite the absence of the broadband white paper which the Department of Telecommunication and Postal Services Minister Siyabonga Cwele said would be published after it was approved by Cabinet at the end of June 2016. It has still not been published.

While the industry welcomes the announcement, there are questions as to whether  this is another standoff between the two departments; or did the Department of Communication shout  the loudest?  Ever since President Jacob Zuma created two different departments to deal with aspects of communication, there has been a continual standoff between these departments. Zuma himself had to intervene and a Memorandum of Understanding  between the two departments was signed in order to keep the peace. It has not augured well for the communications industry. South Africa is already two years behind the International Telecommunications Union (ITU) deadline for digital TV migration and there is no indication that it will happen anytime soon.

However, ICASA has followed its mandate. The Electronic Communications Act (ECA) gives ICASA discretion to develop regulations setting out the procedures and criteria for radio frequency spectrum licences in instances where there is insufficient spectrum available to accommodate demand. So if your company has R3-billion in the kitty you could be smiling. The 61 page document sets out the conditions for the auction and the process to be followed. If all goes to plan the first licences in the newly-available spectrum could be issued as early as 28 March 2017.

ICASA has identified spectrum in the 700 MHz, 800 MHz and 2600 MHz bands. The objective is to ensure nationwide broadband access for all citizens by 2020. This is to be achieved by increasing universal services and access by ensuring rural connectivity, giving consumers more choice, promoting investment and economic growth, ensuring quality of service and ensuring affordability of services.

A tall order for mobile operators. The South Africa Connect policy requires that by 2020, less than four years from now, all citizens must enjoy broadband access and 50% must have a throughput of 100 MHz. By 2030 the universal download speed of 100 Mbps must be available to all citizens.

A licensee must provide data services across South Africa with an average uplink of 15 Mbps and the downlink of at least 30 Mbps to all citizens by 2020.

Quoting from the OpenSignal State of LTE report of February 2016 (available at hyyp://opensignal.com) in the country with the greatest LTE coverage, 97% of the population has an average download speed of 29 Mbps whereas the country with the average download throughput of 35 Mbps has an LTE4 population coverage of 83%.

ICASA will evaluate the technical capability and will require assurances that the applicant has the technical, managerial and organisational ability to deploy the planned communications network. A licensee must also demonstrate progress to date in sufficiently meeting the criteria of uplink and throughput speed obligations.

The spectrum available has been packaged in four lots C, D and E. The announcement in the gazette is not clear what happens to Lot A. All it states is that it is to be awarded though a separate process. Lot A covers 2 x 15 MHz in the 700 MHz band and 25 MHz in the 2,6 GHz band.

Lot B consists of 2 x 5 MHz in both 700 and 800 MHz bands and 2 x 20 MHz in the 2,6 GHz band.

Lot C and E each consist of 2 x 10 MHz in the 800 MHz band and 2 x 20 MHz in the 2,6 GHz band. Lot E offers 2 x 10 MHz in the 700 MHz and 2,6 GHz bands.

Applicants may only bid for one lot. The spectrum licences will be technology- and service-neutral.

All successful licensees are required to provide open access to a minimum of three mobile virtual network operators (MVNO) within three years of the issuing of the licence.  A MVNO must have more than 51% ownership by persons from historical disadvantaged groups. Failing to do so could result in withdrawal of the license by ICASA.

Each application requires a non-refundable application fee of R3-million. Applications to bid close on 3 October 2016 at 15h00 and no late entries will be allowed.

While industry leaders have general welcomed the announcement, they have expressed concerns about having to meet the throughput requirements and yet offer the service at very affordable rates. Industry has been campaigning for the past decade for access to more spectrum, had it happened then, with far better exchange rates, it would have cost the country billions of rand less than today.

The auctions start on 17 January 2017, with a bidder’s seminar and mock auction from 12 to 14 December 2016. The Government Gazette (40145) is available at www.gpwonline.co.za

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