The competition watchdog drew a line in the sand on Monday when it released its final Data Market Inquiry Report, with far-reaching recommendations such as that the big two mobile network providers Vodacom and MTN reduce their prices.
Vodacom was the first to respond, saying the Competition Commission had “downplayed” the importance of the delayed release of spectrum on data prices. It also highlighted the different findings reached by the commission and the Independent Communications Authority of South Africa (Icasa) in its preliminary discussion document.
While the commission has found that South African data prices are quite expensive when compared with other African countries and global counterparts, Icasa’s preliminary findings say they are neither high nor low but just in the middle.
On Wednesday MTN was even blunter.
“We respectfully disagree with the analysis and recommendations contained in the summary report and, as we study the full report, will continue to engage constructively and vigorously defend against overbroad and intrusive recommendations,” said MTN in a Sens announcement.
One of the “overboard and intrusive” recommendations includes dropping data prices by between 30% and 50% in the next two months.
Like Vodacom, MTN says that it has significantly reduced the effective price of data and that the critical barrier to reducing costs even further is limited spectrum availability.
“Radio spectrum is the digital highway upon which we depend to carry increasing mobile data at a more cost-effective price,” it said.
“This is acutely felt in South Africa that has among the lowest spectrum allocation in all our MTN markets. The release of new spectrum in this market will greatly assist our ability to service more customers with more data traffic.”
Spectrum is important because it will allow operators to offer high-speed data services that travel vast distances and penetrate walls. The spectrum they currently use allows them to do this but it also requires that they put their base stations closer together – at a higher cost.
So how did we get here? The question of spectrum has been in limbo for some 10 years and has outlasted eight communications ministers.
Here is a timeline of significant events
- May 2010: Icasa releases the High Demand Radio Frequency Spectrum Licensing Framework Regulations with invitations to apply for space in the 2.6GHz and 3.5GHz band.
- July 2010: The invitations are withdrawn as Icasa decides that it needs an auctioneer from outside South Africa.
- December 2011: Icasa issues a draft Spectrum Assignment Plan for radio frequency range 800MHz and 2.6GHz, delaying the opening of 3.5Ghz to a later date. This comes with a draft Invitation To Apply.
- March 2012: Icasa postpones the licensing of the spectrum again after receiving submissions from mobile operators that it would be premature to go ahead with draft plans and invitations without policy direction from the then communications minister Dina Pule.
- December 2013: New communications minister Yunus Carrim publishes the country’s broadband policy titled South Africa Connect: Creating Opportunities, Ensuring Inclusion.
- March 2015: Icasa issues new Radio Frequency Spectrum Regulations.
- September 2015: Icasa publishes the Information Memorandum for prospective radio frequency spectrum licences to provide details to those who intend to apply for licences within the designated 700Mhz, 800MHz and 2.6GHz bands in order to provide broadband wireless access services.
- July 2016: Icasa publishes an Invitation to Apply for radio frequency spectrum licences in the 700MHz, 800MHz and 2.6GHz bands.
- Shortly after that, then communications minister Faith Muthambi filed court papers to block the invitation, saying Icasa should have waited for the department to finalise the National Integrated ITC (information and communications technology) policy white paper, which introduced the idea of a wholesale open-access network (Woan).
- September 2016: Muthambi is granted a court interdict to halt the spectrum auction.
- October 2018: Icasa withdraws the invitation to auction published in July 2016.
- July 2019: Current minister of communications and digital technologies Stella Ndabeni-Abrahams publishes the Policy on High Demand Spectrum and Policy Direction of the Licensing of Woan.
- November 2019: Icasa on November 1 releases its information memorandum on the licensing process for high-demand spectrum in the 703-790MHz (IMT700), 790-862MHz (IMT800), 2 360-2 400MHz (IMT2300), (IMT3500) 2 500-2 690MHz (IMT2600) and 3 400-3 600MHz (IMT3500) bands. The discussion document is open for public submissions until January 31, 2020.
Ultimately, as mentioned by the commission, the use of the auctioned spectrum will depend on the acceleration of digital migration, which has also been hamstrung for years.
Sources: Icasa November 2019 Information Memorandum and www.itweb.co.za