Connecting Africa is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 3099067.

Business of Tech

Telkom prepares for spectrum battle with SA regulator

Article Image
Telkom is not happy about the way South Africa's spectrum allocation is being handled by the Independent Communications Authority of South Africa (ICASA), and the operator is consulting lawyers to advise what it should do next.

"We believe that competition in the mobile sector is ineffective. The licensing of spectrum is one of the most potent tools in the hands of the regulator, to reset the imbalanced market structure and promote competition," Telkom Group CEO Sipho Maseko said during his live-streamed half-year results presentation earlier this week.

"We believe that ICASA as the regulator missed the opportunity to use the licensing of spectrum to address the monopolistic nature of the market."

South Africa's smaller players have for years complained that the local market is a duopoly controlled by the two biggest operators, Vodacom and MTN.

Maseko said that ICASA has disregarded the findings and recommendations made by the Competition Commission that it must not license spectrum in the manner that entrenches the duopoly.

After years of delays ICASA in October published the Invitation To Apply (ITA) for spectrum for both the planned Wireless Open Access Network (WOAN) and individual spectrum for operators.

The bands that will be licensed include lots of 700MHz, 800MHz, 2.6GHz and 3.5GHz spectrum.

Telkom South Africa Group CEO Sipho Maseko  (Source: Telkom)
Telkom South Africa Group CEO Sipho Maseko
(Source: Telkom)

"The designed ITA – whether it's spectrum caps or lots – [ICASA has] designed them in a manner that disadvantages Telkom as the only credible infrastructure competitor to the monopoly of the two larger players," Maseko said.

He said that Telkom was preparing and planning to participate in the upcoming auction but its participation "should not be construed as a tacit agreement" to the ITA's contents.

"The caps proposed in the ITA disregard the fact that spectrum is available to the duopoly already through spectrum arrangements between themselves and smaller licensees," said Maseko.

"And we also think that there's a missed opportunity to enable the WOAN as an effective competitor to the duopoly including for 5G services, given the limited spectrum that has been given to it."

"Our view is that the current duopoly will be entrenched, at least for the next 20 years, which is the period of the spectrum license, including 5G services. There's an urgent need to level the playing field before this long-term commitment is made," he added.

Legal battle looms

In October, Telkom said it believed a spectrum arrangement between Vodacom and Rain should be considered a merger that should be scrutinized according to the Competition Act, and asked South Africa's Competition Tribunal to look into the agreements . Rain and Vodacom denied that the deal was a merger.

"There needs to be public inquiries that are held so that the actual arrangements between the smaller players and the larger players are understood; and their effect on competition," Maseko said this week.

He said Telkom had also made written and verbal submissions to ICASA as part of the ongoing Mobile Broadband Service Inquiry about the implications of the licensing of spectrum, including the need for a public assessment of the spectrum arrangements between smaller and larger players.

"We've also therefore instructed our lawyers to consider and advise us on the options that are available to Telkom, in the light of the fact that the ITA disregarded or [gave] insufficient weight to the promotion of competition as a material consideration in the licensing of high demand spectrum.

"Whatever action we take will be designed to ensure that there's regulatory certainty, that there is fairness, there's lawfulness and also there is the speedy licensing of a high demand spectrum. It can't be done on an unfair basis, because that actually increases the level of uncertainty for everybody," he said.

Maseko said that if policymakers want effective competition and want prices to come down they have an instrument in their hands to do this, through how they allocate spectrum.

"But if the policymakers decided that actually they want to have a market structure that looks exactly the same way as it is, obviously we would have no choice but to survive and operate with the spectrum that we have. But we don't think that it is good for the economy, we don't think that is good for the market.

"We've made what we consider to be sensible representations with regards to spectrum. We are not looking for an asymmetry in our favor. All that we are looking for is the right balance, to enable competition across the market structure," he concluded.

— Paula Gilbert, Editor, Connecting Africa

Innovation hub

Story

Customer experience is telco's next 'battleground'

South African social data and insights company BrandsEye thinks its unique blend of AI and human intelligence could help Africa's telcos face a battleground around customer service.

Story

Liquid, Project Taara beam broadband across Congo River

Liquid Intelligent Technologies and Alphabet's Project Taara have found a way to bridge a particularly stubborn connectivity gap between Brazzaville in the Republic of the Congo and Kinshasa in the DRC.

More Innovation hub

Latest video

More videos

Guest Perspectives

Story

Omdia View: August 2021

By Omdia Analysts

Omdia's analysts provide context and analysis about MTN's decision to exit Syria and not bid again for an Ethiopian license, as well as 5G news from Mauritius, Ghana, Mayotte and Reunion.

Story

Research Bites: Blockchain potential for SA agriculture

By Roberto Mavilia and Roberta Pisani

This article, in collaboration with the African Journal of Science, Technology, Innovation and Development explores how blockchain can be used in the agricultural sector to help improve production and distribution processes.

More Guest Perspectives

Partner perspectives

All Partner Perspectives

AfricaCom perspectives

Story

Digital inclusion as a catalyst for economic empowerment: Mastercard's Imelda Ngunzu

Mastercard's Imelda Ngunzu talks to Connecting Africa about how digital payment solutions and mobile money are transforming the lives of small business owners, women and marginalized groups in East Africa.

Story

Accelerating women in STEM: In conversation with GirlCode's Tinyiko Simbine

GirlCode co-founder and CFO Tinyiko Simbine talks about why it's important to help girls and young women excel in science, technology, engineering and mathematics (STEM) fields.

Story

How Poa Internet is unlocking meaningful connectivity in East Africa

Poa Internet's CEO Andy Halsall shares his views on what it takes to develop last-mile connectivity and get Africans online in a meaningful way.

More AfricaCom perspectives

Upcoming events

More Upcoming events

Flash poll

All polls

Archived webinars

Digital Skills Enhancing Human Capital

As nations begin to look beyond the crisis of COVID-19 to the new future of work, an opportunity to leverage this disruption as a powerful catalyst for positive change exists – one that could reshape the future and provide more accessible, fair, and impactful digital education and training.

In this webinar, we focus on how digital skills can enhance human capital and help realise the extraordinary potential of intelligent, 4IR-ready African workforces.

Key topics include:

  • Importance of having more than basic digital skills – upskilling & reskilling
  • Championing access to online educational resources – affordable and reliable internet, electricity and hardware
  • Future career options for industry specific roles: Cloud, AI, industrial IoT, big data analytics
  • Education 4.0: How updating educational curricula is key for growth
  • The importance of progressive, industry-driven educational policy frameworks

More Webinars

Sponsored video

More videos

Like us on Facebook

Newsletter Sign Up


Sign Up