The South African government has taken steps towards approving the controversial Integrated ICT Policy White Paper. This paper is set to replace two separate historic white papers on Telecommunication (1996) and Postal Services (1998). This development has received a lukewarm reception within the industry.
The ICT policy has been eagerly anticipated, as it promises to outline government’s plans for the rollout of broadband services across the country and direct the allocation of much-needed spectrum. The stated intention of the policy is to strike a balance between opening the use of high-demand broadband spectrum for use by all licensees, while adequately compensating those who have invested in the infrastructure.
It argues that the new open access regime necessitates a revised licensing framework to accommodate more players and open up the market for more competition, stating, “The new policy environment of open and shared networks will enable competition to be focused at the service level, enabling multiple service providers to provide high-quality and innovative products and services to South Africans at affordable rates.”
Telkom says has noted the policy’s attempt to balance universal access with the need to innovate with the industry, but voiced a concern that policy proposals may pose a risk to current and planned investment within the industry.
Brian Armstrong, Chief Commercial Officer for Telkom said that the policy’s proposal for operators to return the currently assigned International Mobile Telecommunications (IMT) spectrum “goes against international best practice, where there is a reasonable expectation of spectrum renewal.” He added, “The fundamental problem is you have spent millions on the network and then have to return it. We need industry engagement on this issue.”
The white paper also calls for the deployment of a wireless open access network (WOAN), which it says will be “a public-private sector-owned and -managed consortium.” MTN has spoken out, saying that the government’s plans to create a WOAN will be anti-competitive and essentially create a monopoly in the telecoms market. MTN SA CEO, in a conversation with IT Web said that a WOAN will create a monopoly, adding, “It seems to be counter-intuitive that South Africa has spent the past 22 years creating the regulatory environment for competition to flourish only to revert back to a monopoly. MTN knows of no other country where such a structure has been implemented or is successful,” he says.
Armstrong adds, “What we are not enthusiastic about in the policy is the assumption that a single access network will also be good for a well-functioning market, as we have in urban areas. We don’t believe this is the best way to go for efficiency and competition in the metros. It will also disincentivise investment.”
However, he did add that, while Telkom believes infrastructure-based competition should be preserved in the areas that are currently well served, it supports the idea of a WOAN as a means to extend coverage and promote service-based competition in underserved areas, where the duplication of network infrastructure is economically unfeasible.
There has been little progress toward auctioning the additional spectrum, despite SA mobile operators being vocal on the issue. Nyathi said, “The growth of the telecoms sector and the development of the country is dependent on the expeditious allocation of radio spectrum, which will enable operators to improve their service offerings by deploying networks more efficiently in line with customer requirements.”
The Independent Communications Authority of SA (ICASA) moved to resolve the matter in July this year, issuing the original invitation to operators to apply for licences for spectrum in the 700MHz, 800MHz and 2.6GHz bands.
This was not received well by the Siyabonga Cwele, Minister of Telecommunications and Postal Services who, in turn, filed the motion to interdict and thereafter review and set aside the planned spectrum licensing process initiated by ICASA. He believes this tug-of-war could have been prevented if ICASA had waited until the department had finalised its integrated ICT policy White Paper. The matter was heard by the North Gauteng High Court in Pretoria and part A of the case was successfully interdicted, with part B being heard later this year.
While some aspects of the White Paper have been poorly received, Armstrong does note that there are a few positives. He is heartened that the white paper does not fixate on fibre, but acknowledges fixed and mobile. He also in encouraged that the department are so open to engagement on the policy.
“Our reaction to the white paper is that there is a lot of good in it. Some of it is concerning and there are some parts that are potentially dangerous. Our view is that one should regulate where it is necessary, and this includes when there is market failure,” he concludes.