The Department of Communications and Digital Technologies has released the long-awaited Policy on High Demand Spectrum, along with the Policy Direction on the Licensing of a Wireless Open-Access Network (Woan).

The policies suggest the Independent Communications Authority of South Africa (Icasa) assign the high demand spectrum to the Woan, with the remaining spectrum assigned to other electronic communications network service licensees, simultaneously.

“The deployment of a Woan will encourage licensees to work together as far as it is practicable. The value of sharing and collaboration between licensees is that it will result in the more effective use of spectrum. Government fully supports a Woan as a means to meet the public policy objectives,” said Communications Minister Stella Ndabeni-Abrahams.

Published in the Government Gazette, the policy seeks to have preferential assignment of 700 MHz, 800 MHz and 2600 MHz to the Woan, pointing out that some incumbent operators have already been assigned high demand spectrum.

“The fact that the government wants to create a Woan is not surprising. It has been the government’s intention for the past several years. However, the idea of the Woan has evolved and is not as rigid as previously [outlined]. Nonetheless, important questions still remain,” said Africa Analysis business development director Dobek Pater.

It is unclear how much of the spectrum could be allocated to the Woan; however, a prior study by the Council for Scientific and Industrial Research found that, at a minimum, 2 x 25 MHz of 800 MHz; 2 x 20 MHz of 2600 MHz; and 25 MHz of 2600 MHz should be considered for the Woan to ensure its viability and sustainability.

Pater believed that Icasa would likely rely on this study for guidance on the high demand spectrum necessary for a Woan.

Icasa declined to comment on the policy contents as the authority had yet to comprehensively study the policy and apply its mind for a comprehensive response and the process to be undertaken.

A shared approach to spectrum is deemed necessary to stimulate competition, lower the cost to communicate and reduce the barrier to entry for new entrants and small, medium-sized and microenterprises.

“The authority should licence spectrum to the Woan in a manner that enables it to fulfil its policy mandate and to thrive,” Ndabeni-Abrahams stated, adding that the Woan is an important policy instrument to lower barriers to entry for smaller players, improve the ownership of the information and communications technology sector by historically disadvantaged individuals and to promote service-based competition.”

The document commented that there are over 400 players that hold electronic communications network service licences that are unable to access spectrum owing to its scarcity.

“Significant question marks remain, however, around the composition of the Woan, including ownership, operational model, funding and time to market,” added Democratic Alliance Communications and Digital Technologies shadow Deputy Minister Cameron MacKenzie.

“The latest policy directive does, however, indicate a pragmatic approach on the part of government to balance the competing interests of the large network operators with those calling for easier access and greater inclusivity for emerging and small businesses,” he continued.

The remaining spectrum will be allocated on condition that companies procuring capacity in the Woan, provide rural and underserviced areas universal access and universal service; are compliant with the empowerment requirements of the Electronic Communications Act (ECA) and lease electronic communications networks and electronic communications facilities; and provide wholesale capacity to other licensees, besides others.

Further, a single entity may not control the spectrum.

Pater commented that the structure of the proposed distribution of the spectrum meant that operators would need to decide strategically whether they wanted to apply for high-demand spectrum of their own or only use Woan’s capacity.

“I suspect, the large operators would rather also have their own high-demand spectrum.”

The Policy Direction on the Licensing of a Woan, meanwhile, directs Icasa to issue an Invitation to Apply and accept and consider applications for an individual electronic communications network service licence for the Woan.

“The authority must consider that the Woan should provide wholesale open access to its electronic communications networks and facilities and provide wholesale capacity.”

The Woan will be a consortium with at least 70% South African ownership, comply with the ECA empowerment requirements and include diversity of ownership to ensure meaningful participation of all entities involved to prevent monopolistic behaviour.

Further, the policy guides Icasa to consider for the Woan, certain terms and conditions, including universal service and access obligations and incentives.

These include a reduced spectrum application fee to cover only administrative costs; reduced or waived radio frequency spectrum licence fees for a period of ten years; the immediate facilities leasing of electronic communications networks and electronic communications facilities of the radio frequency spectrum licensees and wholesale capacity from licensees assigned high demand spectrum; and offtake, in that a minimum of 30% of national capacity is procured from the Woan collectively, for a period of at least five years, by radio frequency spectrum licensees that are assigned high demand spectrum.

A Vodacom spokesperson told Engineering News Online that the telecommunications group, which had in recent years been vocal about the urgency of the spectrum release, was currently reviewing the document and would comment in due course.

“The long-awaited release of spectrum holds great potential to boost the telecommunications sector to the benefit of all South Africans. All our people deserve the benefit of a modern and connected life and we look forward to studying the Policy and Directive, as we collaborate to achieve this critical goal,” said MTN by email.

“We are greatly encouraged that Cabinet has approved the Policy and Policy Directive for the Licensing of the High Demand Spectrum.”