South Africa Urged by Regulator to Approve Spectrum Auction

  • Broadband rollout needed to boost economic growth, Icasa says
  • Vodacom, MTN, among network operators to compete for licenses

South Africa must end years of deliberation and approve the auction of radio spectrum so mobile-network operators can roll out high-speed broadband services to communities across the country, the telecommunications regulator said.

“Everybody we have spoken to wants the auction,” Pakamile Pongwana, chief executive officer of the Independent Communications Authority of South Africa, said in an interview in Cape Town on Tuesday. “Every 10 percent increase in broadband connectivity leads to about a 1 percent growth in GDP. The further we fall behind in rolling out broadband, the lower our GDP growth will be.”

South Africa’s four mobile-network operators, Vodacom Group Ltd., MTN Group Ltd., Cell C Pty Ltd. and Telkom SA SOC Ltd., have asked the government to release the spectrum so they can expand high-speed broadband services to more customers and increase revenue. The ruling African National Congress has pledged to extend broadband access to every South African household by the end of the decade.

A potential auction of spectrum has been in the pipeline since at least 2006, according to Dominic Cull, regulatory adviser to the Internet Service Providers’ Association.

“As people started using more data and downloading videos, the need for spectrum has significantly intensified,” Cull said by phone. “We have literally been talking about this for 10 years. The need for the allocation of this spectrum is beyond urgent.”

Broadband Straggler

“Spectrum is often considered the life-blood of a mobile communications company,” MTN corporate services executive Graham de Vries said in an-e-mailed statement. “Consequently, MTN would welcome any progress made by the ministry in issuing the integrated broadband strategy and support the regulator in its efforts to make this spectrum available.”

Vodacom spokesman Byron Kennedy said the company “welcomes any intervention by regulatory authorities toward the assignment of the in-demand spectrum, particularly at a time when we’re currently experiencing an acute shortage of spectrum in the local market.”

Telecommunications Minister Siyabonga Cwele has to approve the auction policy before it can be conducted by ICASA, Pongwana said. Siyabulela Qoza, a spokesman for the telecommunications ministry, couldn’t immediately comment when contacted by phone.

South Africa is one of the world’s stragglers in Internet access with just 3.21 fixed-line broadband subscribers per 100 people in 2014 compared with 11.46 in Brazil, 30.37 in the U.S. and 29.31 in Japan, according to figures compiled by the World Bank.

Fair Competition

The spectrum must be distributed by auction in order to ensure fair competition, Pongwana said. “An auction is the most transparent means of allocating spectrum. Previously spectrum has either been allocated to operators by law or by a beauty contest,” often leading to legal battles, he said.

Should Cwele approve the auction process, ICASA would like to see it take place before the end of the year, Pongwana said.

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