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News that a decision has been made to proceed with implementing the National Integrated ICT Policy White Paper holds both positive and negative consequences for the sector.
This is the view of George Kalebaila, research director for telecommunications, media & Internet of Things at International Data Corporation.
The announcement was made during telecommunications and postal services minister Siyabonga Cwele’s budget speech in parliament this week.
Implementation of the White Paper has been delayed to date, due to two highly contentious issues.
“Industry players have not been happy with government’s proposal to appropriate their existing spectrum and giving it to the Wireless Open Access Network or WOAN,” he says. “They have already committed investment in terms of their allocated spectrum and the prospect of losing that spectrum led to a lot of uncertainty in the market.”
The minister announced that licensees would maintain the high demand spectrum allocated to them until the end of the current licence period.
“Because of this announcement, the operators now have the assurance that they will maintain their spectrum assets at least until their licenses are up,” Kalebaila says. “While the issue of WOAN has not gone away, the operators can at least continue to work as they are and at least there is more clarity on how they will work together with WOAN going forward.”
Licensees have committed to buy at least 30% of the existing capacity of WOAN to ensure its viability. “This will create competition in the sector and, if WOAN is successful, it will be easier for operators to migrate. If it fails, however, it will at least not destroy an already successful and lucrative sector.”
The minister has, however, also announced that there will be a spectrum audit, which will again delay the spectrum allocation process.
“The spectrum allocation process for 4G has already been marred by several delays and the proposed audit draw out the process even further,” says Kalebaila.
The audit will determine how much spectrum is available to allocate to WOAN and how much will be left to allocate to other operators.
“If the government wants to unlock further infrastructure investment, they have to make the new spectrum available,” he says. “Current investment is limited to the operators’ existing spectrum. Operators will only invest in new 4G infrastructure, which would ultimately also drive down data prices if they get access to the new spectrum.”