STATEMENT ON BROADBAND RADIO SPECTRUM POLICY DIRECTIVES

23 May 2014

In terms of the commitments made to parliament on 20 August 2013, the Minister of Communications was meant to issue a policy directive on the licensing of spectrum by the end of March 2014.

We must stress that we are acutely aware of the urgency of releasing suitable spectrum for broadband, and regret that this has not been done. This statement provides a brief explanation for this.

The Department will soon engage further with ICASA (Independent Communications Authority of South Africa), mobile operators and other relevant stakeholders on the full reasons for the delay, including the issues briefly set out here. We are keen to get further feedback on our current views and seek the cooperation of all the stakeholders.

We recognise that South African consumers are increasingly demanding extended coverage, faster data transmission rates, and more advanced data-intensive mobile applications and that, in response, operators are deploying ubiquitous, high-capacity radio networks based on state-of-the-art technologies. The increase in mobile subscriptions has been accompanied by the adoption of more sophisticated mobile devices, such as smartphones and tablets, which provide access to the Internet. To maintain this momentum and expand the impact of broadband access everywhere, the mobile industry requires access to sufficient radio frequency spectrum in internationally harmonised frequency bands in order to benefit from economies of scale and international roaming. Furthermore, the industry requires a regulatory framework that creates certainty to attract further investment in networks.

On 4 December 2013, Cabinet approved “SA Connect”, our Broadband Policy, Strategy and high-level Plan. It aims to expand broadband connectivity to 100% of the population by 2020, in line with the National Development Plan. Government aims to remove bottlenecks to broadband network roll-out, including facilitating the assignment of broadband spectrum by ICASA.

“SA Connect” envisages the establishment of a National Broadband Network to provide wholesale fixed and wireless services. It requires that a study be conducted on the feasibility of the wholesale open access network model and its impact on competition. As there is not yet a common view of what constitutes a broadband open access network, the Department has begun with a feasibility study to determine the impact of open access on competition for both wireless and fixed broadband networks. The first phase of a study has been completed and the second phase will be completed by September 2014.  It is intended that a policy directive on spectrum be issued in October 2014.

At the same time, developments currently taking place within the electronic communications sector in South Africa are having the effect of restructuring the market, with significant implications for the development of a wholesale open access broadband network.

The open access network model adopted needs to balance the aspirations of new entrants with the incumbents’ growth objectives and South Africa’s core communications policy objective of affordable and universally accessible broadband services.

The Department’s current thinking is that it is probably better to go for a holistic approach to broadband spectrum, considering all frequency bands suitable for broadband, rather than limiting itself to the 700/800 MHz or 2.6 GHz bands. This is more likely to ensure that spectrum is used to extend broadband coverage to areas where there is no broadband, and increase capacity in areas where there is broadband but the demand is high. We believe that there are practical limitations on the usability of 700/800 MHz spectrum before broadcasting migration is concluded due to potential interference and the need for more spectrum during the dual illumination period and digital-to-digital migration process that is required to release the digital dividend spectrum.  Despite Government’s intention through ICASA to start the spectrum award process for the digital dividend spectrum sooner, this valuable spectrum will probably not be available for use in South Africa until the digital migration process is concluded.

Other issues which have a bearing on the immediate availability of this spectrum include:

• the delays in Digital TV migration due to the impasse on the Set Top Box Control matter; and
• the ongoing technical and regulatory studies at the International Telecommunication Union (ITU) to finalise the frequency channel plan for the second digital dividend spectrum  (700 MHz frequency band) which will be finalised before the world Radio conference in 2015.

Addressing some of these issues is necessary for the development of a roadmap for spectrum licensing. The Department and ICASA have been actively involved in international frequency planning and coordination processes organised by SADC, African Telecommunications Union, and the ITU to facilitate the release of additional broadband spectrum, including the digital dividend spectrum.

This then is an overview of the current approach of the Department. However, we are keen to engage with all the relevant stakeholders on our position and receive their feedback.

This process will be managed by the incoming administration.