This graph shows how government’s proposed new network could be a huge flop

At the end of 2016, government finally took a hard line on the much-debated topic of spectrum in South Africa.

In the September amendment to the National ICT Policy White Paper, the government stated that radio frequency spectrum must be assigned to a national wireless open access network (WOAN).

It also suggested that radio frequency licenses would be taken away from Vodacom, MTN, Cell C, and Telkom to incorporate their capacity into a WOAN.

The WOAN would essentially act as a single wholesale network instead of relying on competing mobile networks to deliver mobile broadband services in their country.

Citizens are promised better coverage, more competition, and as a result, more affordable prices.

However, a new study by the GSMA shows that these plans are likely wildly ambitious – if indeed they roll out at all.

The study found that, of the five countries originally considering this option, only one – Rwanda – has rolled out a network.

The Rwandan WOAN has failed to deliver on numerous promises it originally made, many of which are similar to those proposed in South Africa.

Going backwards

The report shows that countries are more likely to be hampered by the technology, as operators are forced to buy in with no discernible benefit.

“There is no sign mobile broadband services have become more affordable because of the government intervention, according to data from the regulator’s website,” said the report.

“This contrasts with the cost of voice services, which has fallen over the same period.”

The below graph shows how data prices increased across the board in Rwanda (Airtel and Tigo) – despite the fact that the WOAN has already been instituted in the country.

It also shows how, over the same period, MTN has increased its data prices.

“Irrespective of its motives, the government is putting a lot of faith in an unproven model,” said GSMA, speaking on South Africa.

“The repercussions, if the project goes ahead, could be irreversible and result in a negative impact to the country’s economy. If the project goes ahead as proposed in the White Paper, it will have repercussions on the structure of the industry and the country’s economy.”

“The critical role mobile broadband plays in the global economy and, especially, in the economies of developmentally advanced markets like South Africa should be carefully considered.”


Read: Vodacom claims it has already dropped data prices by 44% in 3 years

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