Nicola’s Notes: Quo vadis Mr Minister?

Nicola Mawson, IOL Business Editor. Picture: Matthews Baloyi

Nicola Mawson, IOL Business Editor. Picture: Matthews Baloyi

Published Aug 12, 2016

Share

I can’t quite describe the excitement I felt when the Independent Communications Authority of SA said it was going to finally auction high demand spectrum.

Okay, so I didn’t exactly do the happy dance around the office. I did, however, dash off to a colleague to explain how important this is.

And it is. There’s an oft-quoted stat from the World Bank that every 10 percent increase in broadband boosts the economy by a percent.

That stat, which some have quoted for more than a decade, was updated this year and now states that an increase of 10 percent in broadband penetration would increase gross domestic product per capita by 0.9 percent to 1.5 percent.

That’s not quite the same as the nation’s gross domestic product, but it is proportional to economic growth. And goodness, could we do with 1.5 percent more growth.

Even if we miss a recession - which is now looking feasible on the back of decent mining and manufacturing statistics released on Thursday - we’re still nowhere near where we need to be to have economic growth that translates into jobs.

Read also:  Broadband spectrum spat to turn off investors - analyst

This, ICT analysts and pundits argue (I include the cellular operators here), is why we need that spectrum.

ICASA wants to auction spectrum in the 700MHz, 800MHz and 2.6GHz ranges.

The coveted 2.6GHz range will allow cellular companies to boost super fast broadband (long-term evolution) in built-up areas, while the lower frequencies are ideal for rural areas as these require less base stations to go up, making it more economically viable to put infrastructure into less densely populated areas. Granted, we still have to move off analogue TV (we’re already a year over deadline) before those ranges can be used, but a step forward is a step forward.

Business case

Instead of being able to do this, mobile companies have mostly been re-farming their existing 1 800MHz allocations to roll out LTE in SA, which is not ideal as it increases congestion on the network (dropped calls and endless “hello, hello, are you there?” monologues) and is also expensive for the cellcos. This detracts from the business case to roll out LTE - which is 10 times faster than 3G - because there’s no return on investment and cellcos are businesses, not charities.

So, if you want operators to get on the Broadband for All train, you need to free up spectrum, or else the business case won’t work.

If that - capitalistic - argument to fill a social need doesn’t cut it, there’s also the one that points out that South Africans have an insatiable demand for data, which is getting cheaper all the time, but we’re running out of spectrum. That’s the old supply and demand egg.

If we want to see prices keep dropping, we need to get more people on the networks to drive competition and economies of scale. But, to do that, we need spectrum.

Opening up broadband to more people allows them to connect; not just to the interwebs, but also to ideas, other people, education, advice... the list goes on and on.

Read also:  Ministry files suit to block spectrum sale

Which is why I really don’t understand why on earth Telecommunications and Postal Services Minister Siyabonga Cwele is now heading off to court to stop ICASA helping our country grow. And this because ICASA didn’t wait for a policy directive before moving ahead.

HELLO! We’ve been waiting for that directive since before 2011, when ICASA tried the same trick last. That move was stopped by disgraced former minister Dina Pule in early 2012 - for the same reason.

What’s happening here is that politics is putting SA’s growth and development goals at risk, all because ministers’ egos are bruised when an institution gets its A into G and does what they should have done.

South Africans are paying a hefty price for this bruised-ego nonsense. It’s taken us 10 years to go nowhere when, in other parts of the world, cellcos are pondering LTE’s successor: 5G.

Which is why I - and probably a few lawyers - hope it goes to court so that ICASA’s powers can be confirmed in much the same way as the Public Protector’s powers were confirmed over the Nkandla mess.

As lawyer Richard Spoor would sardonically put it: Viva.

* Nicola Mawson is the online editor of Business Report. Follow her on Twitter @NicolaMawson or Business Report @busrep.

IOL

Related Topics: