A logo of the upcoming mobile standard 5G is pictured at the Hanover trade fair, in Hanover
A logo of the upcoming mobile standard 5G is pictured at the Hanover trade fair, in Hanover

Telecom regulator should look into lowering price of 5G at auction

By Siphelele Dludla Time of article published Sep 28, 2020

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JOHANNESBURG - World Wide Worx said on Friday that the telecommunications regulator should look into lowering the price of the 5G frequency spectrum auction so that South Africa could enjoy the best quality internet services.

In a study released on Friday, World Wide Worx managing director Arthur Goldstuck said communications service providers were unanimous that a high price for bidding on spectrum for high-speed mobile broadband will have a direct impact on the quality of the service.

The World Wide Worx study was based on interviews with the country's four major mobile network operators, and 21 internet and communications service providers.

Goldstuck said among other things they wanted to understand was the importance of mobile spectrum pricing in the long term.

“Based on the research findings, it is evident that operators require expedited allocation of spectrum that holds the following characteristics: contiguous and not fragmented, reasonably priced, and not interfered with by other radio signals,” Goldstuck said.

South Africa has among the most expensive mobile data in the world, ranking 148 out of 228 countries on the price of mobile bandwidth.

In December, the Competition Commission ordered MTN and Vodacom to slash their mobile data prices by an average of 33percent after it found them to be prohibitively expensive.

The Independent Communications Authority of SA (Icasa) will issue an invitation to apply (ITA) for high-demand spectrum before September 30.

The auction will now be held no later than March 31, 2021, three months later than the previously announced December 2020 deadline.

Icasa chairperson Dr Keabetswe Modimoeng said the regulator was finalising the two ITAs for issuance with due consideration of the ministerial policy.

“Icasa has also completed a process to determine the fair economic value of the five spectrum bands that will be made available for auction and spectrum that will be made available to the Wireless Open Access Network, taking into consideration the current state of competition in the South African market,” Modimoeng said.

The low price of auctioning the 5G spectrum could further mean that data prices would be cheaper for struggling consumers.

The spectrum is due to be issued in three main bands, namely 700-800 MhZ formerly used for analogue TV, and high frequency spectrum across the 2.3GHz to 2.6GHz and 3.5GHz bands.

Significant blocks of high-demand spectrum have not been issued to the major network operators by Icasa since 2005, when it allowed use of the 2.1GHz band for the roll-out of 3G networks by Vodacom and MTN.

Cell C was allocated spectrum in 2011, but since then operators have had to “refarm” 3G spectrum to facilitate the roll-out of 4G to consumers.

Goldstuck said the auction of spectrum would boost the economy, as 5G was a key enabler of the Fourth Industrial Revolution.

He said the industry believed that digital migration should be prioritised with extreme urgency to maximise the usefulness an operator can get from their temporary allocation. “Until then, deployments over this band segment will be hindered by quality of service issues,” Goldstuck said.

The World Wide Worx study is in line with the National Treasury's economic recovery plan released in August 2019, which urged the government to release spectrum through an auction with a small set-aside for a government-controlled network.

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