Telkom has launched a authorized problem in opposition to ICASA’s plans to public sale helpful radio frequency spectrum that’s for use for 4G and 5G networks in South Africa.
In an interview with MyBroadband, the Group Government: Regulatory Affairs and Authorities Relations for Telkom, Siyabonga Mahlangu, stated that Telkom has tried to interact with ICASA relating to the spectrum public sale on a number of events, however the regulator rebuffed them.
Mahlangu warned that if the spectrum licensing course of had been to proceed as is, ICASA would mess up the business for 20 years.
“As a result of that’s how lengthy spectrum licences are for,” he defined.
He stated that in keeping with Telkom, there are “plenty of grounds of overview” and that they’ve chosen to focus on two:
Firstly, the “digital dividend” bands of spectrum within the 700Mhz and 800MHz classes are usually not presently commercially viable.
It’s because broadcasters like MultiChoice, e.television, and the SABC are nonetheless utilizing these frequency bands for terrestrial tv alerts.
Secondly, the Unbiased Communications Authority of South Africa (ICASA) has not taken under consideration the shortage of competitors in South Africa’s mobile market.
The complete founding affidavit is embedded on the finish of the article.
Sub-1GHz spectrum important for Telkom
Mahlangu defined that it’s important for Telkom to realize entry to decrease frequency spectrum, just like the 700MHz and 800MHz spectrum that ICASA is planning to public sale off.
Not like its rivals, which had been assigned 900MHz spectrum a few years in the past, Telkom doesn’t presently have any sub-1GHz spectrum.
This spectrum is extraordinarily helpful for networks to supply a stable base of protection.
Decrease frequency spectrum provides higher in-door penetration, making it helpful for protection inside malls, houses, and workplace parks.
It additionally lets community operators lay down wider protection areas with fewer towers, making deployments cheaper and due to this fact finally permitting costs to be decrease.
“That’s why it’s so valued and sought-after,” Mahlangu stated.
“Only one lot of 20MHz of this spectrum instructions a reserve value of over a billion rand in ICASA’s public sale. That is why.”
Broadcasters not but migrated out of 700MHz and 800MHz bands
Telkom’s main bone of rivalry with respect to this helpful lower-frequency spectrum is that broadcasters are nonetheless utilizing it.
Mahlangu stated that ICASA had assigned Telkom a few of this spectrum as a part of its emergency allocation in the course of the Nationwide State of Catastrophe because of the COVID-19 pandemic.
Nevertheless, Telkom was unable to make use of the spectrum in any respect within the Western Cape with out interfering with the operations of broadcasters.
“If I can’t do Cape City [with this spectrum], you’re actually taking me out,” Mahlangu stated, including that it was the identical drawback throughout all main metropolitan areas.
“In case you’re going to ask me a billion rand for the spectrum, locking in my [capital expenditure], then I no less than want to have the ability to use it,” he stated.
Mahlangu stated that Telkom’s concern is that after cellular community operators hand over the cash on the public sale for this spectrum, there isn’t any incentive for ICASA or authorities emigrate broadcasters out of the bands.
“What incentive will the state must migrate broadcasters out of the band as soon as it has the cash from the public sale?” he requested.
For that reason Telkom is asking the court docket to pressure ICASA and authorities emigrate broadcasters out of the 700MHz and 800Mhz bands, offering them with certainty that it’s going to occur.
Ought to authorities then not act to finish South Africa’s lengthy overdue digital migration, will probably be in contempt of a court docket order, Mahlangu defined.
Breaking the duopoly of Vodacom and MTN
Telkom’s second main argument is that ICASA has demonstrated a scarcity of consideration for competitors in South Africa’s telecommunications business.
“We really feel strongly that the market construction is duopolistic,” Mahlangu stated. “That duopolistic construction is the rationale costs in South Africa is excessive.”
Mahlangu stated that ICASA has launched into a Cell Broadband Companies Market Inquiry, however it has not but concluded it.
“Everyone knows that spectrum is the lifeblood of cellular broadband. Now why do you license spectrum with out concluding the cellular broadband providers market inquiry?” he argued.
Mahlangu stated that ICASA will say that it has accomplished a contest evaluation. Nevertheless, he contends that no-one has been concerned in that evaluation.
The entire business has been concerned with the Cell Broadband Companies Market Inquiry, however no-one has supplied inputs into the separate competitors evaluation that ICASA stated was accomplished for the spectrum public sale.
He added that ICASA even appears to depend on a dialogue doc that’s a part of the as-yet unfinished cellular broadband providers inquiry.
“We contend that that is illegal and irrational. You’re placing the cart earlier than the horse,” stated Mahlangu.
Requested whether or not this authorized problem gained’t danger additional delaying the project of the much-needed spectrum, Mahlangu stated that the method may nonetheless be concluded in 2021.
“We may have the discussions within the first quarter after which spend Q2 and Q3 finalising the method,” Mahlangu stated.
He stated that everybody within the business has been engaged on this, so it’s a matter that ought to be doable to resolve pretty rapidly.
Mahlangu additionally argued that Telkom’s authorized problem will not be an undue delay to the method.
“Authorities has delayed fifteen years for a 20-year dedication,” contended Mahlangu.
“Speeding it now and getting it improper will not be in anybody’s curiosity.”
Telkom’s historical past of asking ICASA to interrupt Vodacom-MTN duopoly
Telkom has argued over time that ICASA should actively weaken the dominant market place that Vodacom and MTN get pleasure from in South Africa.
The corporate has particularly said up to now that ICASA should use the foundations of the upcoming spectrum public sale to break the Vodacom-MTN duopoly.
“What’s vital for [us] is that any spectrum made accessible should handle the present market focus within the duopoly of Vodacom and MTN,” Telkom informed MyBroadband in 2018.
“Any spectrum coming to the market should due to this fact enhance competitors out there by permitting smaller operators a chance to compete.”
Telkom CEO Sipho Maseko stated within the firm’s interim outcomes, launched in November, that ICASA’s definition of the cellular telecommunications market is just too slender.
“We’re […] disillusioned by ICASA’s slender definition of the market which is prone to entrench the skewed construction of the market,” Maseko said.
He additionally warned that giving spectrum to the controversial Wi-fi Open Entry Community (WOAN) will in all probability damage the rollout of 5G in South Africa.
“The spectrum assigned to the wi-fi open-access community is unlikely to drive efficient rollout of 5G in South Africa,” stated Maseko.
Invitation to use, and spectrum public sale
South Africa’s telecommunications regulator, the Unbiased Communications Authority of South Africa (ICASA), issued an invitation to use on 2 October 2020 for a number of tranches of this excessive demand spectrum.
Because of the sought-after nature of this spectrum, ICASA has opted to separate the spectrum into heaps and public sale it off.
Its invitation to use included 406MHz of spectrum, which ICASA stated will probably be made accessible for the availability of cellular broadband providers in South Africa.
The cut-off date to use for this high-demand spectrum is 15 January 2021.
The spectrum to be auctioned will span the 700MHz, 800MHz, 2,600MHz, and three,500MHz frequencies, and will probably be accessible within the following lot sizes and portions, and on the following reserve costs:
|Spectrum heaps for public sale|
|Lot numbers||Lot class||Lot dimension||Variety of heaps accessible||Reserve value per lot|
|1-4||700MHz||2 x 5MHz||4||R526,615,392.49|
|5-8||800MHz||2 x 5MHz||4||R752,307,703.55|
|9||800MHz||2 x 10MHz||1||R1,155,174,976.66|
|10-24||2,600MHz||1 x 10MHz||14||R97,843,320.52|
|25||3,500MHz||1 x 2MHz||1||R9,818,987.30|
|26-33||3,500MHz||1 x 10MHz||8||R75,606,202.22|
|34||3,500MHz||1 x 4MHz||1||R19,637,974.60|
ICASA famous that the auctioning of the two,300MHz band has been positioned on maintain as a result of it nonetheless must conduct a feasibility examine on this frequency. Telkom has welcomed this choice.
Spectrum public sale guidelines
The regulator introduced that plenty of obligations will type a part of the licence situations of the Radio Frequency Spectrum Licence.
Quite a lot of these are listed under.
- Throughput obligations: A minimal downlink single-user throughput of 5Mbps on the fringe of the cell (notably in Batch 3 categorised municipalities) for all nationwide wholesalers who’re awarded radio frequency spectrum licences on spectrum band(s) IMT700 and/or IMT800 inside 5 (5) years of licence problem. This obligation should be achieved with different bands (i.e. IMT2600, and IMT3500) assigned by means of this licensing course of.
- Protection obligations (700MHz or 800MHz): One 2 x 10MHz (on IMT800) Protection Lot carries a protection obligation of as much as 99.8% of the inhabitants inside 5 years of problem of radio frequency spectrum licence; and no less than to 95% throughout the totality of all Batch 2 and Batch 3 under-serviced areas/municipalities in South Africa. The winner of this protection lot would comply by an outside-in method to realize 95% of all Batch 2 and Batch 3 under-serviced areas to begin with 234 native and metropolitan municipalities in South Africa inside 5 years of issuance of the licence;
- Protection obligations on “tier 1” operators: Every other tier-1 participant (cellular operators with a market share of greater than 45% in 10 municipalities) who wins any additional sub-1GHz spectrum could be obliged to develop protection to no less than 97% of the inhabitants. Additionally, the outside-in method applies, to realize 92% throughout all Batch 2 and Batch 3 under-serviced areas first for the two x 10MHz Protection Lot throughout all 234 native and metropolitan municipalities in South Africa inside 5 years of issuance of the licence.
- Protection obligations on “tier 2” operators: In respect of 700MHz or 800MHz licenses awarded to candidates categorised as Tier-2: candidates that cowl lower than 80% of the inhabitants with IMT providers should develop such protection to no less than 80% of the inhabitants usually throughout South Africa, together with under-serviced areas of their business alternative. The skin-in obligation wouldn’t apply to those Tier-2 nationwide wholesalers.
- Open-access obligations — passive infrastructure sharing: Potential candidates which can be categorised as Tier-1 (cellular operators with a market share of greater than 45% in 10 municipalities) should:
- Produce a reference supply for website entry to be provided to any licensee requesting website entry and pointers, together with pricing, timeframes and insurance policies for reserving house on masts.
- The reference supply set out by the applicant shall turn into licence situations for licences to 2 tier-1 operators issued on this public sale course of.
- Open-access obligations — MVNOs: A Licensee assigned spectrum by means of this course of is required to supply open entry to MVNOs which should have 51% possession held by individuals from Traditionally Deprived Teams. This provision shall turn into licence situations for licences issued on this public sale course of. The Licensee assigned spectrum by means of this course of shall be required to undergo the Authority inside a interval of between 3 – 6 months the enterprise plans to make sure that the MVNOs are sustainable for the interval of three years.
- Social obligations: A Licensee assigned spectrum by means of this course of shall zero-rate all of the cellular content material supplied by Public Profit Organisations together with .gov.za web sites.
- Obligation to assist new Wi-fi Open Entry Community: The candidates which can be to be assigned the radio frequency spectrum by means of this course of shall procure a minimal of 30% nationwide capability from the WOAN collectively as quickly because the WOAN is operational for a interval of 5 years. The 30% nationwide capability to be procured from the WOAN will probably be shared proportionally to the quantity of the spectrum acquired from the Public sale amongst the profitable licensees.
Telkom vs the mobile business – Founding affidavit in spectrum public sale problem
Telkom’s full founding affidavit is embedded under.
Now learn: Sipho Maseko speaks truthfully about Telkom’s monopolistic previous