Media release: To nationalise or compromise? Minister Cwele’s dilemma on ICT policy

22 March 2017
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To borrow from Shakespeare, nationalisation by any other name is still nationalisation, and government taking assets held in private hands without consent or compensation is still expropriation. The formation of a single Wireless Open Access Network (WOAN) for the mobile network industry, as proposed in the Department of Telecommunications and Postal Services (DTPS) **ICT Policy White Paper, amounts to the creation of a government-controlled state enterprise. Industry analysts and lawyers agree that this is an attempt at effective expropriation of the mobile network operators’ spectrum and assets, even if it is cloaked in the language of state custodianship of spectrum as a national asset.

(**National Integrated Information and Communication Technologies Policy White Paper)

Instead of individual private networks, there will be one, big nationalised network created from existing private assets currently held by Vodacom, MTN and Telkom. All high demand spectrum will be allocated to this network. The directive is to take back this valuable spectrum, which has ordinarily been licensed to network operators. This will be done without regard to the operators’ willful cooperation, and will, in effect, amount to expropriation (Section 9.2.5.4 of White Paper).

Minister Siyabonga Cwele disputes this, having publicly stated that there will be no nationalisation or expropriation. Unless the wording in the policy is changed with proper public and stakeholder consultation, however, nationalisation and expropriation will be the effect.

Yet Minister Cwele is adamant the policy is final and not up for discussion. However, the Minister’s options are nationalisation/expropriation, or a revision of the policy. With conflicting statements and policies, the ICT sector is now left guessing about what the consequences of the White Paper will be. The rule of law requires clarity and unambiguity; a requirement now being irresponsibly ignored.

According to Africa Analysis, an independent ICT consulting firm, the proposal to take back high demand spectrum from the current license holders is essentially the nationalisation of spectrum in South Africa. Many industry experts echo this sentiment, with retiring Telkom commercial officer Brian Armstrong saying that the policy's proposal for operators to return currently-assigned spectrum "goes against international best practice" and would compromise operators' anticipated return on investment and be a disincentive to future expenditure on network upgrades and maintenance. "The fundamental problem is you have spent millions on the network and then have to return it. We need industry engagement on this issue," Armstrong *said.

Vodacom CEO Shameel Joosub has been *quoted as saying that he thought government and mobile operators needed to find some middle ground for spectrum and the new ICT policy. "The [WOAN] model that has been proposed is an untested model, so what we should do is reserve some spectrum for it and allow the smaller players to pursue it − so that they do have access to spectrum − but at the same time take advantage of the big networks that you have created so that they can build out coverage faster and to the rural areas," Joosub said.

Ex MTN South Africa CEO Mteto Nyati has said* that the creation of a WOAN "is nothing other than the creation of a monopoly”.

(*Source: ITWeb)

Shadow Minister of Telecommunications Marian Shinn has said that the WOAN will be rapidly established without the necessary legal grounding in place and with the expropriation of the businesses built by local and foreign investors during the past 25 years.

Media reports say that the big telecommunication networks are trying to negotiate a compromise with the Minister and have put forward a hybrid model which would see operators continue to be licensed for individual spectrum allocations as well as spectrum being allocated for government's planned Wireless Open Access Network.

However, DTPS spokesperson Siya Qoza is quoted as saying that DTPS is not planning to renegotiate its ICT Policy White Paper, and is only considering proposals from the industry on the implementation of the policy. It must be clear that consultation on implementation is categorically not negotiation on policy, and is not aimed at finding a compromise in the best interests of all stakeholders.

Why should the media, the public and consumers care? Until this is resolved, shortage of spectrum will continue as demand for data rises exponentially. This means that consumers will pay more for data at lower speeds than is possible, and the rollout of advanced LTE technologies will continue to be delayed.

The prevailing view is that this standoff will end in court and tie up a vital industry in years of litigation while technological advances render the policy irrelevant.

Ends



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