Government sets new deadlines to resolve South Africa’s spectrum mess
Finance minister Malusi Gigaba has released his “inclusive growth plan” which aims to drag South Africa out of recession.
As part of the plan, the minister put emphasis on 14 key sectors that need to be addressed in the country, including interventions in the country’s fiscal policy, financial sector and taxes and with SOEs and government guarantees, among others.
Gigaba also put specific emphasis on telecommunications sector, putting pressure on the minister of telecoms and postal services to make progress on the licencing of spectrum in South Africa.
It was announced this week that the Council for Scientific & Industrial Research (CSIR) has been appointed to conduct an audit to determine how much radio frequency spectrum should be reserved for government’s planned wholesale open-access network (WOAN).
The spectrum issue in South Africa has been persisting for a number of years, with the government hesitant to give out the valuable frequencies to private companies, who need it to provide better and faster mobile broadband services.
In May, telecoms minister Siyabonga Cwele finally settled on a system that government would move forward with – specifically, a hybrid model where the government’s WOAN would co-exist with networks run by the dominant mobile operators.
An audit will determine how much of the spectrum will be kept by the government for its WOAN, while it is expected that what is left will be auctioned off.
With South Africa’s dire need to accelerate economic growth – of which mobile and broadband services are a fundamental component – Gigaba has now laid out new deadlines that will hopefully see the end to the drawn-out saga.
The deadlines are as follows:
- The department of telecoms and postal services and the CSIR need to conduct a high level study on WOAN spectrum needs with a view to license the remainder to the industry by August 2017
- The department must issue a policy directive mandating ICASA to commence the licensing process by December 2017 and
- The department must complete the spectrum licensing process a year later, in December 2018
Other deadlines related to the telco sector is a Competition Commission investigation into high data prices, which Gigaba said should take place this month (July 2017) and the rollout of phase 1 of SA Connect Broadband programme in August 2017.
Private sector participation
One of the more notable aspects of Gigaba’s plan is an apparent shift in government policy towards privatisation.
The plan has an entire section dedicated to the “private sector participation” framework, where government is looking to the private sector as a possible means to pull the country out of recession.
While it is not clear as yet how this particular plan will play out, it has been suggested in the past that the South African government could look at privatising some state companies to turn a profit – or to sell stakes that government owns in some private companies to raise capital.
Such a move was seen in 2015, when the government sold shares in Vodacom, to raise R23 billion to finance Eskom.
According to Gigaba’s ambitious plan, government needs to roll out this private sector participation framework by March 2018.
You can read the full document here.
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