In a move that is expected to foster competition in the industry, South Africa's Communications and Digital Technology Minister Solly Malatsi has scrapped the government's plan for a national wholesale network operator. The decision means that mobile operators will now have more radio frequency spectrum available to them at the next auction. This development is a significant shift in the government's approach to promoting competition in the industry.
The government had sought to make changes to South Africa's ICT laws through the Electronic Communications Amendment (ECA) Bill, which aimed to give effect to the policy objectives of the national integrated ICT policy white paper published in 2016. One of the most contentious issues was network sharing, with the state proposing a wholesale open access network (WOAN) that would allow operators to share infrastructure. However, policymakers have now decided not to continue with this agenda.
According to Minister Malatsi, the proposal to reserve high-demand spectrum for a single WOAN has not resulted in the licensing of a WOAN in over seven years since the policy was first issued. As a result, the spectrum identified for this purpose has remained substantially unassigned. The minister has determined that the continued reservation of this spectrum is no longer justified and has withdrawn the reservation.
The affected spectrum is now immediately available for licensing by the Independent Communications Authority of South Africa (Icasa) in a manner that gives effect to the objects of the ECA and the policy objectives set out in the policy. This decision is expected to promote the efficient and productive use of a scarce national resource. The WOAN was an attempt to create a private sector-led wholesale operator that would compete with the industry's two largest players, Vodacom and MTN.
The department has stated that there is more value in having the spectrum auctioned and actually used, rather than reserving it indefinitely without concrete plans for the WOAN to come into effect. Radio frequency spectrum is a finite, scarce national resource that can assist in reducing the cost of network construction by increasing the amount of capacity in a network. Unassigned spectrum represents a continuing, foregone opportunity for coverage, competition, and investment.
Icasa recently reached a milestone in March 2022, raising R14.4 billion in the country's first spectrum auction since 2004/05. The auction is expected to promote competition in the industry and improve broadband access. The government's decision to scrap the WOAN plan is seen as a positive step towards promoting efficient use of spectrum and encouraging investment in the industry.
The withdrawal of the WOAN plan is expected to have significant implications for the industry, with mobile operators now having access to more spectrum for auction. This is likely to promote competition and improve broadband access in the country. The government will continue to monitor the industry and make adjustments as necessary to promote efficient use of spectrum and encourage investment.
Key points
- The South African government has withdrawn its plan for a national wholesale network operator, making more radio frequency spectrum available for auction.
- The decision is expected to promote competition in the industry and improve broadband access.
- The Independent Communications Authority of South Africa (Icasa) will now license the available spectrum in a manner that gives effect to the objects of the ECA and the policy objectives set out in the policy.
