Promise Tracker: A small step for analogue, but a great leap for dialogue

When President Cyril Ramaphosa delivered his first State of the Nation Address (SONA) in 2018, he promised swift action with regards to the allocation of high-demand radio spectrum. It was the same promise made by his predecessor Jacob Zuma the year before.

He sang the same tune at the beginning of 2019, adding that the department of communications, “will shortly be issuing policy direction” to the Independent Communications Authority of SA (Icasa) for the licensing of the spectrum.

The minister of communications, Stella Ndabeni-Abrahams, had been expected to issue the policy direction to Icasa by the end of April, but at the last minute unexpectedly deferred it to after the 8 May general election. And just like the years before, any hope of action in terms of the final policy directive on spectrum allocation was dashed.

Mismanagement and instability at the department of communications have impeded the process for close to 14 years. South Africa has had 11 ministers during this period, leaving many failed attempts and projects in their wake. One is the production of the SA Connect digital migration set-top boxes.

The department failed to publish the policy paper on 19 July following the president’s second attempt in June at making this promise, announcing that the minister of communications would issue the policy direction to Icasa to commence the spectrum licensing process within the next 30 days.

Publication of the policy direction, which Icasa will use to assign spectrum suitable for 4G/LTE networks — and possibly for next-generation 5G infrastructure — has been delayed so many times, it was just another round of déjà vu.

Meanwhile, the high cost of mobile data and broadband access in South Africa is costing consumers, business and the economy a pretty penny.

In his 2019 Budget speech in February, the minister of finance, Tito Mboweni, stated that out of 17 African states, South Africa’s broadband was the fourth most costly. One gigabyte of data costs $14.10 in SA. In Cameroon (the cheapest country), one gigabyte costs $2.10, he said.

SA ranks 126th in terms of prepaid mobile cellular tariffs and 69th in terms of fixed broadband internet tariffs, according to the World Economic Forum. National Treasury, in a report released last week, said this is a significant inhibitor of the country’s competitiveness.

Treasury noted that a 10% increase in fixed broadband penetration could lead to a 1.35% increase in GDP growth in developing countries and a 1.19% increase in developed economies.

South African telecommunications prices can decline by as much as 25% in the next three years if additional radio frequency spectrum is rapidly released, it said.

SA mobile operators are desperate for access to new spectrum to continue rolling out their 4G/LTE networks. They have been forced to use the same 2G and 3G spectrum assignments, which have become very crowded. It has also prohibited them from deploying 5G technology.

They blame the lack of new spectrum for their inability to cut mobile data prices in any meaningful way.

The minister declined to indicate when the policy document would be published after the initial deadline was missed. However, the department issued a press release on the day with details on her budget vote to Parliament as the now combined minister of Communications and Digital Technologies on 11 July. It stated that the Policy Direction on Unassigned High Demand Spectrum had been finalised and was going through the requisite processes prior to publication, which allows Icasa to start reviewing the related radio frequency regulations.

Less than a week later, Icasa announced it was already working on the list of radio apparatus that did not require a radio frequency spectrum licence. In this regard, Icasa has published a notice of its intention to amend Annexure B in the Government Gazette where interested stakeholders are invited to submit written representations with regards to the proposed amendments by close of business on 6 September 2019.

Things have been moving pretty fast there.

In an announcement on the same day, the minister confirmed that much of the high demand spectrum would be assigned to a Wholesale Open Access Network (Woan).

The idea of a Woan was proposed as part of the National Integrated ICT Policy White Paper, published in 2016. It calls for a shake-up of the previous policy framework for spectrum allocation in favour of an “open access regime” with the Woan outlined as a “public-private sector owned and managed consortium”. This is in line with changes made to the Electronic Communications Act (ECA) in the Government Gazette published at the end of 2018.

Once this spectrum has been assigned to the Woan, the remaining high demand spectrum may be assigned to other electronic communications network service licence-holders, Ndabeni-Abrahams said.

The minister’s statement did not, however, specify how much spectrum would go to the Woan and how much to network operators. It did add that the consideration of 5G spectrum would be covered in a separate policy directive in 2020.

“To this extent, the licensing of the 5G candidate bands will be informed by the outcome of the aforementioned investigation and report from the authority. The minister will thereafter issue a separate policy direction on the 5G candidate bands,” the statement said.

On 30 July, Icasa issued a notice that it was lifting the moratorium in respect of applications for Class Community Sound Broadcasting Service Licences and applications for Radio Frequency Spectrum for purposes of providing a community broadcasting service.

It said it would publish an invitation for prospective applicants with a list of available frequencies for their respective districts, as per the Terrestrial Broadcasting Frequency Plan 2013, and include all the relevant regulations. This would be done within three months, it stated.

Forward to mid-August, when the department of communications published its policy on the high-demand spectrum, paving the way for distribution to SA mobile operators. It revealed that the Woan will receive preferential treatment for spectrum in the 700MHz, 800MHz, and 2,600MHz bands.

“It is expected that further delays will occur before the spectrum is finally assigned, and Icasa will need to determine specifically which spectrum slots will be assigned to each mobile operator,” says Professor Brian Armstrong, the chair in Digital Business at Wits Business School.

Mobile operators declined to comment until they could properly study the documents and terms of reference. The general consensus, however, was positive and that it is a step forward in alleviating the spectrum problems of SA networks. They confirmed that the direction provides an overview of spectrum licensing, and specific information would be needed from Icasa to determine the licensing process.

But industry players say the market should not expect immediate price relief or a significant drop in the shorter term either.

“Telecommunications companies still have to build the relevant infrastructure,” says Armstrong. He says it will take some time for the benefits to pull through.

He believes the lack of spectrum is not purely to blame for high data prices. The operators are partly to blame by being too rigorous in how they structure their data packages and limited in their product offerings.

“If they were more diverse in the contract periods, the bundle costs – even allow customers to choose the services they are subject to – there would be much more room for them to save in fixed input costs for example, even add economy of scale in specific, more lucrative areas.”

Icasa told Business Insider South Africa in August that the body was still “applying its mind on the published policy direction” and would only outline the process to release spectrum at a later stage.

In South Africa, the spectrum is limited as television broadcasting is still hogging frequencies – because a move from the analogue TV system to digital television has been delayed for half a decade. In February, the department announced the latest digital migration deadline to which the government had committed had been moved to 2020.

The department of communications has missed by miles the June 2015 deadline set by the International Telecommunication Union (ITU) for countries to complete the full switch from analogue to digital terrestrial television (DTT), as the goalpost continues to be moved forward.

According to the department, its new digital migration deadline is in line with the adoption of a new delivery model for DTT, approved by Cabinet in 2018.

Perhaps we can’t expect them to change their ways overnight. But at least they are showing a willingness to do so. BM