Vodacom, the country’s biggest mobile phone operator with more than 33 million customers in South Africa, believes that the much-needed spectrum allocation would enable it to bulk-up mobile broadband in rural areas. By Gugu Lourie
Vodacom welcomed the publication of an Information Memorandum by ICASA that provides guidance to prospective applicants regarding the process and criteria to be applied by the Authority in the licensing of the International Mobile Telecommunications (IMT) spectrum.
The allocation of spectrum will enable telcos to alleviate the current strain on voice services due to the interim measure of re-farming existing spectrum to support data services.
Furthermore, various operators have argued that the delay in allocating spectrum was impeding the advance towards the South African Government’s 2020 goal of broadband for all, as part of the National Development Plan.
Tshepo Ramodibe, executive head for Vodacom corporate affairs, says Vodacom welcomes any intervention by regulatory authorities
towards the assignment of the in-demand spectrum.
Spectrum is a scarce resource and the ICT industry is likely to see a fierce bid for the allocation of the spectrum, which has been delayed for years.
“This will be helpful as we’re currently experiencing an acute shortage of spectrum in the local market. The assignment of this spectrum would enable us to increase broadband coverage, especially in rural areas and thus improve the lives of households in these remote parts through access to broadband,” Ramodibe tells TechFinancials.co.za.
However, before companies are awarded spectrum they will have to comply with a number of obligations.
To exemplify, the Electronic Communications Act currently prescribes 30% direct Broad Based Black Economic Empowerment (BBBEE) ownership as the prequalification criterion for spectrum or licensing applications.
In a Government Gazette published on Monday Icasa said it is favouring auction process used by Germany, Italy, Spain, Portugal, Greece and the Czech Republic.
The Gazette stipulates the following BBEE obligations.
“A licensee must achieve BBBEE level 2 status within twenty four (24) months from date of issue of the Radio Frequency Spectrum Licence. A licensee must increase equity ownership by Historically Disadvantaged Persons (HDP) by three percent (3%) within twenty four (24) months from date of issue of the Radio Frequency Spectrum Licence.”
Meanwhile, Vodacom is finalising the acquisition of the country’s second national fixed line business, Neotel, for R7 billion.
Neotel also has access to considerable quality of spectrum.
Vodacom tried to convince ICASA that it would keep Neotel at arm’s length and would not have control over its lucrative radio frequency spectrum. Cell C argued that the Vodacom-Neotel deal was tailored to avoid the Electronic Communications Act restrictions and the spectrum regulation.