Johannesburg - The spat between the Telecoms Ministry and the Independent Communications Authority of SA (Icasa) over South Africa’s wireless broadband spectrum auction would entrench global perceptions of the country as a technological “laggard” and an unfavourable destination for investment, a leading industry analyst warned.
“This is terrible news for consumers and business. It will further hold back the already long-delayed allocation of badly-needed spectrum,” said Arthur Goldstuck, the managing director of World Wide Worx.
He was commenting after Minister of Postal and Telecoms Services Siyabonga Cwele filed an application with the High Court in Pretoria on Monday to halt the spectrum licensing process.
Spectrum
Cwele also wants the court to set aside Icasa’s invitation to bidders to apply for R15 billion of wireless spectrum, charging that it is unlawful, and that the industry regulator has usurped the cabinet’s powers to make policy.
“Both parties are at fault in this dispute,” Goldstuck said.
He said Icasa had “jumped the gun” when it went ahead and invited bidders to apply for the planned January 2017 auction without a policy directive from the government.
“The minister is not blameless either, as no direction has been forthcoming. This has put Icasa in a lose-lose situation.
“On the one hand it has been lambasted for holding the country back by not moving on spectrum,” Goldstuck said.
“On the other hand, it has now put itself in a pickle by finally taking action without the required policy directive.”
In papers filed before the court by Cwele’s special adviser, Sipho Mjwara, the minister argued that Icasa should have waited for the forthcoming White Paper on Information and Communication Technology (ICT) to be released before it went ahead with the spectrum auction process.
The spectrum was bundled into five packages, each carrying a reserve bidding price of R3bn.
The White Paper was not yet a public document, however, Icasa had requested and been given access to a draft version, Mjwara said.
Draft paper
It is believed to differ greatly from the approach taken by Icasa, favouring instead an open access system that will allow new players into the market, rather than assigning spectrum exclusively to a handful of players with the deepest pockets.
Icasa’s proposed auction, the government’s court papers argue, would not promote competition and would, instead, “favour a few rich and powerful” and keep prices high.
Goldstuck said the longer the dispute dragged on, the worse it would be for South African internet users.
“It means that at time when we have the highest uptake of mobile broadband, we’re seeing the slowest pace of enablement from both government and the regulator.
“There’s a complete logjam in addressing the burgeoning demand.”
Without the new spectrum, cellular networks have to re-engineer existing systems to keep up with demands at far higher cost than if they had been able to take advantage of new spectrum.
BUSINESS REPORT