The Competition Commission said on Friday that the government’s latest policy directive on high demand spectrum was critical to promoting data affordability for the struggling South African economy and consumers. Photo: Pixabay

JOHANNESBURG – The Competition Commission said on Friday that the government’s latest policy directive on high demand spectrum was critical to promoting data affordability for the struggling South African economy and consumers.

The antitrust body said it welcomed the government’s announcement that the spectrum licensing process would include measures to promote competition, transformation, inclusive growth of the sector and universal access.

“At a time when public finances are under such pressure, it is tempting to try to maximise revenues by simply auctioning spectrum to the highest bidder. High demand spectrum is a scarce national resource and its allocation should be done in a manner which ultimately benefits the citizens of the country,” said the commission.

The commission said it would continue engagements with communications regulator, the Independent Communications Authority (Icasa), on the planned licensing of 4G/LTE and future 5G spectrum in terms of the design and execution of spectrum licensing in line with the policy directive. 

“The commission will specifically engage around how a spectrum licensing process may ensure not only universal coverage but also access, which requires a level of universal affordability and not just technical availability,” it said. The commission said this migh include obligations to ensure affordable data prices immediately, but also how relative allocations between operators may shape competition going forward into new generation networks such as 5G. 

“It will also include measures to ensure the commercial and competitive success of the Wireless Open Access Network (Woan), avoiding some of the difficulties faced by other late entrants, as well as appropriate regulatory oversight of that entity,” it said.

Minister of Communications Stella Ndabeni-Abrahams announced last month that the policy on high demand spectrum was gazetted and a directive had been given on the licensing of Woan.

Ndabeni-Abrahams said in the directive that more than 400 players that hold electronic communications network service licences, but cannot access spectrum due to its scarcity, should be allowed to use Woan. 

In its Data Market Inquiry released in April the commission provisionally recommended that  spectrum allocation should ensure cost reductions from greater spectrum access, alongside other obligations to improve affordable access. 

The Data Services Market Inquiry which found that data was too expensive in South Africa and that Vodacom and MTN charged higher prices in South Africa than other countries which they operate in followed persistent public concerns about the high level of data prices.

Peter Takaendesa, a portfolio manager at Mergence Investment Managers, said South Africa was behind many other emerging countries in allocating broadband spectrum and that was one of the many reasons data prices have remained relatively high.

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