While Telkom, Cell C, MTN, and Vodacom are enjoying having a go at Icasa and each other, there is another, important battle looming.
Access to the wireless radio frequency spectrum is essential to building a fourth generation (4G) wireless broadband network, and operators who cannot gain adequate access to this spectrum will find their growth limited as consumers demand better high-speed connections.
It is assumed that Neotel’s allocated spectrum is the main driving force behind their imminent acquisition by Vodacom. The deal which industry speculators say could be worth as much as R10bn, is expected to see Vodacom take over 100% of Neotel’s equity from India’s Tata Communications.
Access to Neotel’s spectrum would allow Vodacom to streak ahead of its rivals in the deployment of 4G technology and would be a huge advantage as the mobile industry shifts towards mobile data and away from voice.
MTN in turn has questioned whether spectrum can be transferred as part of the merger, under current legislation. While the National Development Plan advocates spectrum trading, the necessary legislative changes are a couple of years down the line.
At the same time MTN seems to be putting its own spectrum plans in place. MTN South Africa CEO, Zunaid Bulbulia, has said that they are looking into a number of options should the transfer of spectrum be okayed in the Vodacom/Neotel deal.
MTN recently signed an agreement with Telkom which will allow both companies to roam on each other’s networks, and cedes the management and development of Telkom’s radio access network outsources to MTN. Although neither has said if there are further plans to share spectrum, it would be a huge advantage for MTN to gain access to Telkom’s spectrum.
Seemingly in reaction to this, as well as the ongoing debate about mobile termination rates, the Independent Communications Authority of South Africa (Icasa) has announced that they are planning to launch what they call a ‘high-level inquiry into the state of competition in the information and communications technology sector’
Icasa has said that the wide-ranging inquiry will “develop a full appreciation of the implication of these unfolding changes and developments on the regulation of competition in the sector”. Although this might be seen within the industry as a case of too little too late; Icasa has come under fire numerous times for dragging their feet with regard to the licencing and allocation of high-demand spectrum bands, as the industry is still awaiting formal policy on spectrum from the department of communications.
While director general, Rosey Sekese, has said that the policy is being finalised and will be available soon, the uncertainty around it has made sure that all the big industry players are hedging their bets.