Vodacom, MTN, MWEB, Telkom and Vox DataPro, a subsidiary of Vox Telecom, have week confirmed their interest in the spectrum which is sought after for the transmission of wireless broadband services and is expected to stimulate competition in the local wireless market.
Lars P Reicheldt, Cell C chief executive officer, said Cell C would decide on participation only once the Independent Communications Authority of South Africa (Icasa) had provided clarity around the spectrum auction. “There is no clarity around the spectrum auction as of now: Procedure, possible cost or the conditions linked to the spectrum.”
This month TechCentral reported that Icasa, which had last year planned to auction spectrum licences within the 2.6 GHz band and 3.5 GHz band but postponed the event, was a step closer to reconvening the auction.
Icasa cited technical considerations of the band and mitigation against interference which meant it had to redesign the auction rules as the reason for abandoning the auction. ICASA also said it needed to seek spectrum auctioneering expertise.
TechCentral said Icasa had now approached new Minister of Communications Roy Padayachie with a list of preferred bidders.
Reicheldt said 2.6 GHz was a problematic frequency because it could only cover small areas whereas South Africa is vast lower frequencies are considered spectrally efficient.
Cell C last year rolled out its high-performance network across the country on the 900 Mhz band. Reichel said it allowed radio waves to travel further with fewer sites, but with better indoor penetration and allowance for more traffic on its network.
Paseka Maleka, spokesman for Icasa, said “No Icasa did not send a list of potential bidders, Icasa sent the name of the preferred bidder who happens not to have a South African citizenship.”
Maleka said in terms of Section 14(A)(2) of the Icasa Act 13 of 2000, the minister must approve the appointment of experts who are not South African citizens or permanent residents before the expert can be appointed and commence with work.
He said the service provided needed to have previous experience “in assisting regulatory authorities in conducting radio spectrum auctions and have an understanding of the South African legislative framework.”
Analysts did not want to speculate on the price that operators could pay for the highly-valued spectrum.
Dobek Pater, a telecommunications analyst and director at Africa Analysis said, “We often find spectrum is quite expensive in Africa. Many African markets treat it as a revenue source. In Europe it is seen as a competitive enhancer.”
He said Nigeria and the Democratic Republic of Congo recently sold spectrum in the 2.3 GHz range for about US$ 8 million (R54.8 million) but is not more expensive auctions held in European countries.
The 2.6 GHz spectrum in particular is sought after by the likes of Vodacom and MTN. It is used for the deployment of mobile services and high speed broadband connectivity on next generation technology such as Long-Term Evolution and WiMax (Worldwide Interoperability for Microwave Access).
WiMAX provides high-speed wireless Internet transmission of data, voice and video. LTE is new high-speed technology to transmit wireless mobile radio technology. It implementation is considered to increase network capacity and potentially reduce the cost of delivering high speed services.
Graham de Vries, general manager of regulatory affairs for MTN South Africa said the company was looking to deploy LTE to enhance its data offerings.
Vox DataPro planned to bid for both enabling it to build its own wireless broadband network rather than relying on incumbent operators.
Tim Parle, a senior telecoms consultant at technology research firm BMI-Techknowledge said “The other bands are most or fully assigned. Until such time we see the benefits of a digital dividend following the migration of analogue to digital TV and the freeing up of spectrum in the 800 MHz and perhaps 700 MHz bands, there is little more spectrum available for assignment.
“Qualitatively, in the last year or so, the international action has been centred on this digital dividend spectrum.” He said lower frequencies provided better coverage and in-building penetration which resulted in more coverage per base station which is important in less developed markets and for new entrants.”
Industry is also concerned that state-owned signal distributor Sentech owned 50 MHz of the spectrum which it was not using. Wireless Business Solutions, which owns iBurst, held 15 MHz and had applied for more.
Industry is also concerned that state-owned signal distributor Sentech owned 50 MHz of the spectrum which it was not using. Wireless Business Solutions, which owns iBurst, held 15 MHz and had applied for more.
Maleka said, “The authority is in the process of discussing these delicate matters and will advise once we have concluded negotiations.”
Vodacom said, “As a general statement we believe that since spectrum is a finite resource that is in effect the raw material for our industry, it should ideally be allocated to those companies that have a proven track record of using it. In this manner the largest number of people can benefit from the additional capacity that new spectrum will bring.” - Asha Speckman(C) Independent Online
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