Gary Moore is a Senior Consultant at the Free Market Foundation. He was a practising attorney in Johannesburg for 30 years. He is the author of published articles and monographs about the rule of law, the legality of state action, the meaning of statutes, and laws affecting small business.
The views expressed in the article are the author's and not necessarily shared by the members of the Foundation.
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This article was first published on Mybroadband.co.za
on 21 March 2022
Communications Authority has delayed availability of high-demand spectrum
To assess official policy’s socio-economic impact on the mobile telecommunication sector, the Free Market Foundation tapped Christoph Klein’s technical experience.
The viability of offering services on a mobile radio-telecommunication network depends on the availability of electromagnetic spectrum in a band of frequencies which can be used for transmitting signals, and the cost of developing a network to use that band.
Signals that use spectrum in higher-frequency bands (such as the 2.6 and 3.5 GHz bands) can put through more data per second, and are crucial for delivering high-speed broadband in dense urban areas - although they need denser infrastructure - the cost of which cannot be recouped from customers in sparsely-populated rural areas.
Signals which use spectrum in lower-frequency bands (such as the 700 and 800 MHz bands) can cover rural areas with less infrastructure and can be developed for about 40 percent of the cost of a high-frequency network.
The 700–800 MHz bands would not only be important for rural coverage, but also allow for more-affordable broadband in urban areas, in enabling service providers to increase network performance by making combined use (aggregation) of high- and low-frequency spectrum to raise data-throughput rates, expand network coverage, save power, and penetrate buildings better in dense urban areas. An effective and common aggregation method worldwide is to pair spectrum in the 800 MHz and 2.6 GHz bands.
None of these extremely useful frequency bands, whether the low-frequency 700–800 MHz or the high-frequency 2.6 and 3.5 GHz bands, were permanently allocated to network providers. South Africa’s leading providers were last allocated spectrum 18 years ago, even though they serve 80 percent of the country’s consumers.
The key 700–800 MHz bands are still used in South Africa for transmitting television broadcasts in out-dated analogue format, even though TV signals can be broadcast in compressed digital format on lower and more-efficient frequency bands which allow for higher-quality broadcasts.
The “migrating” of TV broadcasts from analogue transmission on the 700–800 MHz bands to digital transmission on lower bands would be a “digital dividend” by releasing the 700–800 MHz bands for low-cost rural digital broadband-communication networks.
South Africa and other member states of the International Telecommunication Union (ITU) agreed in Geneva in 2006 that frequencies used for analogue television broadcasting could be used for digital services as from 2015.
In 2008, South Africa’s Minister of Communications published a Migration Policy, which declared that the analogue-broadcast signal would be switched off in 2011 (four years earlier than the ITU’s targeted 2015 date).
Yet that 2011 analogue switch-off did not take place. South Africa then committed to end analogue broadcasts by the ITU’s targeted date in 2015. Even that target was not met.
The low-frequency 700–800 MHz bands were hence not available for digital services. Nor were they or the similarly-useful high-frequency 2.6 and 3.5 GHz bands allocated for use by digital network providers.
In September 2020 the Acting Director-General of Communications and Digital Technologies warned that, even after migration, a complex digital-frequency “restacking” still had to take place before the 700–800 MHz bands could be used for digital services.
Consumers - urban or rural - have borne the cost of this regulatory delay. Consumers experience inferior broadband coverage, costlier data services, mediocre building penetration and higher power consumption and, in terms of negative consequences, feebler economic productivity and impaired educational opportunities.
After the Foundation’s assessment in early 2021 of the socio-economic impact of government policy, in July that year President Ramaphosa announced in his State of the Nation Address that the television broadcasting had to migrate from analogue to digital signals by March 2022, when the analogue signal would cease and only digital transmissions would be broadcast. Analogue TV sets would then work only if connected to a decoder.
The Acting DG blamed the National Treasury for the migration delay, saying that it had taken a long time for approval of a 2019 Cabinet decision to put state-owned broadcasting-signal distributor Sentech in charge of the subsidised decoder roll-out to indigent households. (The Universal Service and Access Agency had the job, but encountered “problems”.)
Households with a monthly income not exceeding R3500 and an analogue TV qualify for a government-subsidised decoder (“set-top box”) without charge, and were urged to go to a post office to be registered to be given one.
In early October 2021, the Minister of Communications and Digital Technologies estimated that 3.75 million households qualified for a subsidised decoder. She said that, of these, some 1.184 million had been registered for one, and half of those had been given decoders and were receiving digital broadcasts. She said that qualifying households who applied and were registered before the end of October 2021 would receive a decoder before the analogue signal is switched off. Those applying after October will receive one later.)
After the declaring of the Covid-19 national state of disaster under the Disaster Management Act in March 2020, Icasa in April of that year granted to licensees and others an temporary assignment of “emergency” spectrum in the useful 700–800 MHz and 2.6 and 3.5 GHz bands, until (whichever came first) three months after the ending of the state of disaster or 30 November 2020.
Of this temporarily-allocated spectrum, barely 15 percent was in frequency bands in which licensees had infrastructure. Only smaller licensees were assigned spectrum immediately employable. The major carriers had to acquire new base stations.
The 700/800 MHz spectrum was not readily available due to the failed broadcasting migration.
So, the temporary spectrum allocation’s full potential was not secured, which detrimentally affected broadband provision in rural areas and frustrated the realising of the benefits of spectrum aggregation in the 800 MHz and 2.6 GHz bands.
After the spectrum auction was scheduled for March 2021, larger operators hesitantly started to roll out equipment, mainly in the 2.6 GHz band. Carriers bore significant investment uncertainty. The spectrum assignment was temporary. Delay beyond the March 2021 auction date was possible, in light of previous cancellations of Icasa auctions.
Indeed, the auction scheduled for March 2021 attracted litigation and was postponed to March 2022.
Icasa extended the termination date of the temporary assignment of 700–800 MHz and 2.6 and 3.5 GHz spectrum four times, ultimately to the end of November 2021.
That month, Icasa replaced the “temporary” with a “provisional” allocation of the same spectrum, and invited applications for licences for it which will be valid until (whichever comes first) three months after the ending of the state of disaster or 30 June 2022.
The temporarily–provisionally allocated “emergency” spectrum is roughly the same as the spectrum for auction.
The allocation of “emergency” spectrum demonstrated that spectrum was readily available, despite being withheld dormant for years. The migration, auction and spectrum assignment could have been initiated and finalised years ago.
Consumers could, by now, have been benefitting for years from superior broadband coverage, cheaper data services, better building penetration, lower power consumption, stronger economic productivity and enhanced educational opportunities.
This writer’s following article will describe the authorities’ evolving view of competition, the auction process that is underway, the litigation surrounding the auction, and the possibility that the assignment of frequencies pursuant to the auction could be affected at the last minute by the litigation.