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The wait for more spectrum is over
The South African high-demand spectrum auction finally appears to be over – and with it the wait for extra spectrum that will enable more 4G and 5G services. We asked Mark Colville, a principal analyst with consulting group Analysys Mason*, to explain how we got here – and to suggest what might happen next.
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SOUTH AFRICAN HIGH-DEMAND spectrum for 4G and 5G has finally been auctioned, after a lot of delays. In fact, said Mark Colville, a principal analyst with Analysys Mason, whose work focuses mainly on radio spectrum and wider regulatory issues, “The exact starting point can be debated.”
The regulator ICASA acknowledges 28th May 2010 as the date when it initiated the process of developing the licensing framework regulations for the spectrum, and in December 2011 it published a first invitation to apply (ITA) for the 800MHz and 2.6GHz spectrum bands. However, Colville added: “It has been over 15 years since ICASA previously licensed new spectrum to MNOs.”
He continued: “Since then, a series of political disputes and legal challenges have successively served to derail the process and prevent the auction from taking place. In more recent times, since another ITA was published in 2020, the industry has been very divided on how the spectrum should be assigned.”
The largest operators, Vodacom and MTN, have not been keen on aspects of ICASA’s auction design that set aside some of the spectrum for smaller players. The third-biggest operator Telkom, meanwhile, objected to the spectrum caps that were applied in the context of South Africa’s relatively unique market structure with a large number of roaming agreements between operators.
It even seemed unhappy with the concept of using an auction rather than some form of administrative assignment to license spectrum. However, Telkom’s legal challenge to the process may now be over, after it reportedly reached an out-of-court settlement with ICASA in mid-April.
The context is an urgent need for extra spectrum. After all, since spectrum was last assigned to mobile operators, first 4G and now 5G technologies have arrived on the scene. As in other countries, South Africa’s data traffic has also grown rapidly in the last 15 years as consumers have made increasing use of these new technologies, as well as legacy 3G services.
However, capacity has not been able to keep up, at least not in an economic way. “The result,” said Colville, “has been lower service quality than could otherwise have been expected and a need for operators, particularly the larger mobile operators with more customers, to look for creative solutions to boost network capacity.”
He continued, “This lack of spectrum has therefore been a key contributor to the proliferation of roaming agreements between established operators with a lot of traffic and not enough spectrum, and others with spectrum licences originally used for other purposes but relatively few customers.”
