BUSINESS MAVERICK: Round and round they go: Groundhog Day for Telecoms

State of the Nation Address, President Cyril Ramaphosa committed to reducing the cost of data in South Africa. At the time, he promised that the spectrum licensingHe repeated this in his February 2020 State of the National Address.

However, while the mobile operators have been itching to get their hands on more spectrum – which is essentially lying fallow – an interim finding from a study being conducted by World Wide Worx into the prospects for 4G and 5G in South Africa, suggests that spectrum pricing may well prove to be a barrier to the future.

While the ITA has not been released, a previous version was released in 2016, from which can be deduced that the likely floor price for bidding for auction will be set at R3-billion minimum. “The risk is that operators pay for expensive spectrum but cannot afford to build the infrastructure for the next five years,” he says. This is undesirable for obvious reasons.

The delay is curtailing growth and investment, and what frustrates network operators is that significant blocks of high-demand spectrum have not been issued by Icasa since 2005, when it allowed the use of the 2.1GHz band for the roll-out of 3G networks by Vodacom and MTN. Cell C was allocated spectrum in 2011.

High spectrum prices are linked to more expensive, slower mobile broadband services with worse coverage.

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