1. The South African Communications Forum NPC (SACF) welcomes this
opportunity to submit written comments on the draft Next Generation
Spectrum Policy (Draft Policy) and welcomes the public consultative
process underway to solicit input on the Draft Policy.
2. The SACF is a member funded industry association that brings together
the public sector, private sector and civil society organisations with a
goal of building partnerships in bridging the digital divide and creating
an information society.
3. The SACF’s core role is advocacy – advancing common member
positions that contribute to the strengthening and growth of an
inclusive and transformed Information and Communications
Technology (ICT) sector.
4. The SACF engages in a public consultative process on ICT policy,
legislation and regulations – contributing industry positions informed by
practical considerations and information held by members in the
communications sector.
5. The SACF welcomes the opportunity to comment on the Draft Policy
which attempts to use spectrum as a driver for economic
development through inclusive economic participation and
development. We recognize and support the policy objective to
make the licensing of spectrum as inclusive as is possible as it is a
catalyst for economic growth in the ICT sector and also an enabler for
development of other sectors of the economy.
6. While consultations on the draft policies are not required to include
public hearings, the SACF is of the view that this will be a useful
inclusion and urges the Department to hold a hearing to engage with
stakeholders when considering the submissions.
GENERAL COMMENTS
7. It is essential that any policy is forward looking and strikes a balance
between protecting current and historic investment while promoting
investment in new technologies.
8. The SACF welcomes the regulatory certainty that the policy seeks to
provide which in our view is essential to promoting critical investment.
The SACF’s comments on the DRAFT NEXT GENERATION SPECTRUM POLICY 2
The licensing framework must further enable the licensing of spectrum
efficiently and timeously so that licensees are to rollout services in
support of economic development.
9. The SACF will respond thematically to the draft policy with comments
being divided into general comments that we believe ought to be
considered and specific comments on the provisions contained in the
draft policy.
10. Broadly, the SACF’s mandate is to contribute to the strengthening and
growth of an inclusive ICT sector that is able to attract and sustain
investment. We are of the view that in part the objective of the draft
policy aligns to the SACF’s purpose.
– The use of spectrum must ensure maximum social, cultural and
economic development benefits for all citizens;
– Transparent spectrum allocation and assignment;
– Regulatory measures, where required, should be minimally
intrusive, whilst being both efficient and effective;
– Regulation must be open, transparent, and reasoned,
evidence-based and developed through public consultation.
Spectrum policy and management should support the efficient
functioning of markets by:
○ permitting flexible use of spectrum to an extent
practically possible,
○ harmonizing spectrum use with international allocations
and standards, except where South African interests
warrant a different determination,
○ making spectrum available for use in a timely fashion,
○ clearly defining fair and sustainable obligations
conveyed in spectrum authorizations,
○ ensuring that appropriate and effective interference
protection measures are in place;
○ reallocating spectrum where appropriate, while
considering the impact on existing services;
Connectivity through collaboration
11. The licensing of spectrum plays a critical role in wireless connectivity
that is essential to ensure a connected nation to actively participate
in a digital economy and enjoy its promise.
12. Connectivity is not a function of a single sector of society but rather a
collaboration between the private, public sector and government.
The SACF’s comments on the DRAFT NEXT GENERATION SPECTRUM POLICY 3
13. While industry rolls out networks and provides services it requires a
partnership to extend services to all.
Pragmatic but Forward-looking Approach to Licensing
14. South Africa, like many other developing countries has a predominance of mobile over fixed services with Statistics SA indicating
that fixed access remains at about 10% of the population. While it is
imperative to recognize the significant ongoing investments and
contribution of mobile networks and services to overall connectivity.
It is critical that any policy adopts a forward-looking approach while
protecting and growing current levels of investment. This is essential to
make way for new technologies.
15. While it is important to adopt a forward-looking approach it must be
done in a manner that does not get caught up by the hype of new
technologies that may be unsustainable. The SACF therefore, is of the
view that policy, legislative and regulatory frameworks must adopt a
forward-looking but pragmatic approach to the licensing of
spectrum. New, sustainable proven technologies must be given the
space to operate and thrive.
Meaningful Transformation
16. A balanced approach to transformation, is a national imperative and
the licensing framework must support and encourage meaningful
and sustainable transformation.
17. The ECA continues to promote narrow-based empowerment which
denies the overall support, participation, and growth of the Black
enterprise.
18. It is imperative that the policy and ultimately the legislative framework
moves away from a narrow-based outdated approach to
empowerment to a more meaningful and inclusive broad-based
approach.
19. The primary legislative framework for Broad-Based Black Economic
Empowerment (the B-BBEE Act and Sector Codes) promotes a
balanced approach to transformation that seeks to skill Black people
and create Black enterprises. It further, encourages and incentivises
large companies to develop and mentor Black enterprises through
the enterprise development element of the Codes and incentivises
procurement from these entities.
The SACF’s comments on the DRAFT NEXT GENERATION SPECTRUM POLICY 4
20. The consequences of a balanced approach to empowerment
includes:
– Advancing skills through the skills development thus creates
more skilled Black professionals who are better equipped to
start-up businesses of their own, hold more senior roles in
corporates and Government. They are more likely to occupy
managerial roles as a result of being better qualified individuals.
– A more diverse and inclusive management structure is good
for transformation, cohesion and ultimately good for business.
– The enterprise development creates stronger and more
sustainable Black enterprises because training and mentorship.
– This translates to increased Black-owned businesses which
creates a larger pool of Black suppliers and may promote
procurement.
21. A broad-based balanced approach therefore creates and promotes
more effective and sustainable transformation.
22. Narrow-based economic empowerment on the other hand focuses
on promoting and developing a very small pool of already
empowered people who have access to funding and resources. This
excludes the majority of the population.
23. This approach is heavily dependent on a multitude of variables that
impact the value to the investor. Investments must be very significant
to be able to influence the direction of the company.
24. The SACF has long been an advocate of broad-based transformation
and encourages our members in achieving the highest levels of
compliance with the sector codes. It is therefore essential that the
licensing framework aligns with the approaches of promoting
meaningful transformation and inclusivity of marginalized persons. The
framework must be flexible enough to foster innovation recognizing
the constantly evolving technologies essential to economic
development and sustainability.
Efficient Spectrum Use
25. A key guiding principle that the SACF supports in the licensing of
spectrum is that all users must pay for access to spectrum. The terms
for access and pricing must be the same for spectrum licensees. This
promotes its efficient use.
The SACF’s comments on the DRAFT NEXT GENERATION SPECTRUM POLICY 5
26. The introduction of the Administrative Incentive Pricing (AIP)
framework for the licensing of spectrum has promoted efficiency of
use and discouraged hoarding which is critical in an environment of
scarcity. The introduction of the AIP saw the return of unused spectrum
by Sentech and Telkom. Holding onto unused spectrum was
expensive and accordingly an unjustifiable expense.
SPECIFIC COMMENTS
Below the SACF provides specific comments on issues of concern to its
members.
Roles and Responsibilities of the Minister and the Regulator
27. The SACF notes with concern the provisions on the Roles and
Responsibilities of the Minister and Regulator. The proposal in the draft
Policy appears to undermine the independence of the Regulator,
which in our view could never have been the intention of the current
policy amendments. South Africa has made significant strides over the
past 25 years in respect of the separation of powers, this is aligned to
global best practice and South Africa’s WTO commitments as per the
Reference Agreement on Telecommunications.
28. It isn’t clear what the policy attempts to cure by the apparent
conflation of the roles of the Minister and the Regulator. The doctrine
on the separation of powers is premised on the decentralisation of
power to ensure fairness and transparency.
29. Regulatory independence on matters of policy analysis and
implementation Section 7(c)(i) states that the regulator will implement
the spectrum policy and policy directions issued by the Minister in line
with ECA.
30. South Africa’s agreement with the WTO stipulates that there should be
a separation between the functions of the regulator and that of the
Minister. The WTO reference document on telecommunications
discusses six regulatory concepts, including licensing, universal service,
allocation and use of scarce resources, protections for competition,
and the establishment of an independent regulator. Sixty-one
signatories (61 parties) to the Basic Telecommunications Agreement
The SACF’s comments on the DRAFT NEXT GENERATION SPECTRUM POLICY 6
approved the reference document in full or in part as additional
obligations in accordance with GATS Article XVIII1.
31. To retain its independence, the regulator must have the discretion on
whether to implement the Policies and Policy directions developed by
the Minister2 and how. Such a decision should not be taken lightly, with
the regulator having to demonstrate that it considered a relevant
Policy or Policy Direction before deciding whether and how to
implement the policy.
32. Considering the above the SACF recommends that the regulator
should retain the right to “consider” Ministerial Policies and Policy
Directions, and not be “compelled” or coerced to implement the
policy without application of their extensive industry knowledge and
their own independent thinking. ICASA’s independence is enshrined
in the Constitution.
33. While these powers are separate and specific they are
complimentary and must be exercised in tandem as together they
strengthen the whole. The separation of powers is strengthened by a
body of administrative law that promotes transparency and efficiency
in the execution of the distinct functions of each.
34. The Minister sets the policy framework and the Regulator, ICASA
considers and manages the spectrum regime. However, the rejection
of policy elements must be based on considered thinking, and
cannot be arbitrary.
35. In an optimal environment the Regulator would understand precisely
what the Policy maker seeks to achieve consequently when assessing
the policy and in instances where the Regulator disagrees with or is
unable to implement aspects of the policy, it should be able to
propose alternatives that could address the policy intentions. This
ought to be accompanied by the considered reasons for the
potential deviation.
36. The Regulator’s independence is a functional independence which
means that the Regulator, ICASA, must operate within the overall
1
https://www.wto.org/english/tratop_e/serv_e/telecom_e/workshop_dec04_e/guermazi_referencepaper.doc
2 Cowhey, M.P. and Klimenko, M.M. (2013), “The WTO Agreement and Telecommunications Policy Reform”,
World Bank eLibrary, June, available at: https://elibrary.worldbank.org/doi/abs/10.1596/1813-9450-2601
(accessed 11 October 2022).
The SACF’s comments on the DRAFT NEXT GENERATION SPECTRUM POLICY 7
policy environment while its independence lies in the execution of its
functions.
37. Removing ICASA’s discretion in implementing the policy would be
tantamount to removing or curtailing its independence. ICASA would
then become merely an implementing agency of the Policy maker or
Minister thus defeating the purpose of the separation of powers.
38. The roles of the Minister and Regulator are distinct and separate and
is aligned to international best practice.
National Radio Frequency Plan (NRFP)
39. The South African National Radio Frequency Plan (NRFP) includes
among others –
● resolutions and decisions taken by World Radiocommunication
Conferences (WRCs) that are applicable to ITU Region 1 (Europe,
Middle East and Africa) and South Africa
● South African National Footnotes
● References to the SADC Frequency Allocation Plan (FAP) and SADC
Harmonised Guidelines for a few bands
● South African Radio Frequency Spectrum Assignment Plans (RFSAPs)
40. Section 7 (b) (i) of the Draft Policy states that –
the Minister is responsible for the National Radio Frequency plan (NRFP),
which is the statutory instrument under the Electronic Communication Act
(Act 36 of 2005 as amended) (ECA) that identifies allocations and advise
users about various services which can be operated in each spectrum
band and their conditions of operation…
Additionally, Section 7 (b) (ii) states that –
The Minister is responsible for updating and approval of the National
Radio Frequency Plan including the allocation of spectrum for the
exclusive use by national security services.
41. Read together, these two clauses give the Minister exclusive
responsibility for updating and approval of the NRFP and allows
him/her to advise users about the conditions of operation in each
frequency band.
42. The SACF has two concerns with this proposal. Firstly, it removes the
regulator from having a role to play in the development of the NRFP
as it currently does. This role is important since the NRFP is forward
looking, while also considering the socio-economics of migration of
The SACF’s comments on the DRAFT NEXT GENERATION SPECTRUM POLICY 8
existing users, equipment age, replacement cycles and cost, as well
as technological advancements. Another consideration is that the
Minister should develop Policy while the regulator implements same
and licences users. Due to the existence of government owned
licensees, the Minister should not have an active role to play in
activities that can affect individual licensees.
43. The second concern is that the conditions of operation in specific
frequency bands are usually contained in regulations and/or
individual licences, which both fall squarely within the responsibility of
the regulator. If the Minister sets conditions of operation in any
frequency band, then she/he would be encroaching on the role of
the regulator.
44. The SACF therefore recommends that the current legislative
arrangements with respect to development and approval of the NRFP
should remain i.e., the regulator develops the NRFP and sends it to the
Minister for approval.
International spectrum coordination and Cross border interference
45. Section 7(b)(iii) states that the Minister is responsible for international
spectrum frequency coordination and harmonization obligations. The
SACF agrees with this clause, which is in line with the current legislation
and practice.
46. Section 7(b)(iv) requires the Department to consult with the regulator
on matters relating to the Minister’s international, multilateral and bilateral spectrum coordination and harmonization responsibilities, as
well as such matters including regional and sub-regional spectrum
planning, and cases concerning cross border interference.
47. The SACF recommends that cases concerning cross border
interference should be handled by the regulator with the Minister
being kept informed of progress since these are operational matters
that may involve measurement of the extent of cross border spillover
to ascertain whether it is within acceptable limits. If the cross-border
spillover is above acceptable limits then remedies such as a change
of operating frequency or restrictions on the use of assigned
frequencies close to the border can be considered. Such remedies
can only be imposed and enforced by the regulator since the Minister
should not be involved in operational matters. Considering the above
the SACF recommends the deletion of the phrase “, and cases
The SACF’s comments on the DRAFT NEXT GENERATION SPECTRUM POLICY 9
concerning cross border interference” from the end of Section
7(b)(iv).
48. Following the SACF’s recommendation that development of the NRFP
should remain the responsibility of the regulator, section 7(b)(v) should
be amended as follows –
49. The Minister develops the country’s positions, frequency allocations,
and international frequency coordination for spectrum use.
Regular spectrum audits and publication of report
50. The SACF recommends that a new clause should be added to section
7 – Responsibilities of the regulator, requiring that regular spectrum
audits must be conducted. These spectrum audits should be
conducted at least once every five years and the report, minus any
confidential information, must be made publicly available in an easily
accessible format.
Spectrum Management Regime
51. This approach goes against the practice and technology neutral
legislative framework in South Africa where ECNS licensees have “refarmed”
spectrum by replacing older technology with newer more spectrally efficient
technologies e.g., replacement of 2G networks with 4G networks in parts of
the 900 MHz band.
52. The SACF therefore recommends that this section should be reworded to
take account of the established practice of spectrum refarming by ECNS
licensees and the legislative framework. This will be in line with the principle
of technology neutrality which allows any suitable technology to be
deployed in a frequency band. Another consideration is that in 2029 all
individual ECNS licences will expire, however, some spectrum licences that
were recently awarded by auction will still be in force at that time.
53. We note that the draft policy proposes the current spectrum assignments
may not necessarily be reassigned on the same basis when licences are
renewed in 2029. There ought to be further consultation on this, as it is unclear
why it is necessary to change up the assignments if the incumbents are able
to adequately demonstrate the efficient and effective use of the assigned
spectrum. In any event, such proposed changes fundamentally affect the
The SACF’s comments on the DRAFT NEXT GENERATION SPECTRUM POLICY 10
manner in which investors value their investments. This could result in a short
investment horizon and less risk taking, in a sector that is already considered
as a high-risk operating environment in some respects.
54. However, as the SACF is on record saying when the original allocation
changes, retention of assignments should not be automatic. That is a
principle for which the SACF has consistently advocated as in our view it
could potentially encourage squatting while waiting for the allocation to
change.
55. The SACF has noted that two approaches have been used in respect of
spectrum licensing when the allocation changes. In some instances,
licensees are permitted to retain and reuse the spectrum. In other instances,
licensees are required to return the spectrum, where it is relicensed. As there
are no criteria as to when licensees are permitted to retain and reuse or when
they are required to return for relicensing, the approach appears to be
arbitrary. The SACF is of the view that it is critical that there is a single
approach in the interests of fairness and transparency and regulatory
certainty.
56. This is important to provide regulatory certainty, the approach needs to
apply to all licensing processes and not some. When the approaches to
licensing are varied, it causes a considerable lack of certainty. This is the case
in respect of the digital migration bands.
57. South Africa has a technology neutral licensing framework therefore, the
change from one generation of technology to another should not impact
the licensing. However, when the allocation changes, the SACF is of the view
that spectrum should be reclaimed and relicensed given that the
fundamental purpose has changed, as is the case of digital migration. All
eligible licensees would then be able to apply for the spectrum as per its new
allocation.
Transparent Licensing Processes
The SACF’s comments on the DRAFT NEXT GENERATION SPECTRUM POLICY 11
58. It is imperative that all licensing processes are open, fair and transparent
where the Regulator is obliged to notify stakeholders of licensing processes.
This will allow any stakeholder or licensee to participate in the process instead
of a discriminatory approach.
59. The SACF has raised its concerns in this regard previously when several
licensees over a period had expressed an interest in a particular band. ICASA
received and kept all the applications, but later in an opaque process
assigned spectrum to some licensees and not others. There was no prior
notification of the process or announcement post assignment. This does not
augur well for transparency and regulatory certainty or fairness.
60. It further creates a challenge in that assignments were done on a
secondary basis when the band has been identified for discussion at WRC 23
where the allocation is likely to change. It is unclear as to what happens in
such an instance. For example, do those licensees then retain the
assignments that were favourably and unfairly awarded without due process
or are they returned and relicensed? The SACF has advocated for the return
and relicensing. This is aligned to the principle of returning the spectrum when
the allocation changes , for a fair assignment process to then be run where
all eligible licensees are able to fairly compete for the spectrum. This principle
applies to all bands.
Public availability of spectrum inventories and licensee database
61. The SACF welcomes the proposal in section 8(h) for spectrum inventories
and licensee database to be made publicly available on an easy to access
and continuous basis. Once implemented, this will be a welcome change to
the current unsatisfactory situation where it is very difficult to find accurate
information on spectrum licences and usage in different frequency bands.
Spectrum Allocation (Allocation of spectrum)
62. The updated ITU radio Regulations or ‘red book’ is published within six (6)
months after completion of each World Radiocommunication Conference
(WRC). Ideally, South Africa should complete the updating of the NRFP within
eighteen (18) months after completion of each WRC. The SACF, therefore,
recommends that section 9(b) should be amended to read as follows –
The SACF’s comments on the DRAFT NEXT GENERATION SPECTRUM POLICY 12
63. The NRFP must be reviewed, updated and published in the Government
Gazette within eighteen (18) months after completion of each World
Radiocommunication Conference (WRC) to keep it current.
Spectrum Outlook
64. The SACF welcomes the proposal in section 10 for the development of
spectrum outlook for South Africa, through consultation with industry and
interested persons. We propose that the spectrum outlook review cycle
should align with the WRC cycle i.e. it should be done every three to four
years. The spectrum outlook review should commence immediately after
publication of the NRFP and be completed no more than eighteen (18)
months after WRC in order to help guide the development of South Africa’s
position on WRC agenda items and the development of proposals for new
WRC agenda items.
Spectrum assignment/licensing and coordination
65. The SACF requests certainty of license validity period to inform investment
decisions. Long-term licenses have realized great returns and social impact,
while short-term licenses or licenses issued without a clear validity period tend
to restrain investment. It is in the best interest of the public that there is
continuity of services, hence the relicensing should be completed before
expiry of current licences.
Licensed spectrum bands
66. Spectrum is awarded on an exclusive use basis and is costed accordingly.
In addition to the direct cost for access to the spectrum, there are a slew of
obligations that are included which comprises of coverage and social
obligations, which ultimately contributes significantly to the cost of access to
the spectrum.
67. Spectrum assigned is not all used at once, instead it is used in a manner
that best suits the needs and consumer demand of the licensee who has
paid for the spectrum. However, the SACF supports the approach of
spectrum trading, pooling and sharing on a commercial basis in a manner
that promotes the efficient use of the spectrum.
68. In section 12(b) the proposed transformation from “right to exclusivity”
into “right to protection from interference” as well as the “use-it-or-share-it”
principle for the licensed spectrum bands is a fundamental shift. The SACF
requests that clarity should be provided on what is considered complete
The SACF’s comments on the DRAFT NEXT GENERATION SPECTRUM POLICY 13
utilization of the spectrum band. This is required to prevent arbitrary and
inconsistent imposition of “use-it-or-share-it” on licensees.
69. Notwithstanding the above request for clarity, “the right to exclusivity” is
the preferred, fair approach to spectrum sharing and commercially
negotiated spectrum sharing agreements are recommended.
Spectrum licence fees
70. The use of Administrative Incentive Pricing (AIP), which was introduced by
the regulator was aimed at promoting the efficient use of spectrum and
avoiding spectrum hoarding. Its implementation resulted in the
rationalisation of spectrum and the return of some unused spectrum by
Telkom and Sentech. While this appears to have been an effective tool, it
has not been equally applied to all licensees, especially the broadcasters.
SACF is of the view that the licensing fee regime should apply fairly to all
licensees, including those that provide government services.
Liberalisation of spectrum use
71. The SACF supports the policy proposal to adopt a technology-neutral
approach to licensing, which seeks to enable licensees to offer the services
they are licensed for, using a technology of their choice. However, SACF is
opposed to the proposed service-neutral licensing, due to the potential risks
that are associated with this licensing framework.
Hoarding of spectrum and managing unused licensed spectrum
72. The SACF expresses its concerns over the use-it-or-lose-it, and use-it-orshare-it principles of managing unused licensed spectrum due to the lack of
clarity on what constitutes unused spectrum. Ideally, spectrum not used in
certain areas cannot simply be classified as unused and subject to the useit-or-lose-it principle or subjected to sharing. The failure to use spectrum in a
given area could be due to, among other things, interference and planned
usage, which does not qualify that particular spectrum to be subjected to
these principles. SACF, therefore, urges the Department of Communications
and Digital Technologies (DCDT) to include the potential evaluation criteria
and not rely on anecdotal views on what constitutes unused spectrum. In
any event, sharing of an asset that has already been commercially
accounted for needs to be on mutually agreed commercial terms, and
cannot be imposed.
The SACF’s comments on the DRAFT NEXT GENERATION SPECTRUM POLICY 14
Spectrum sharing and spectrum trading
73.SACF recommends the implementation of a robust regulatory framework
for spectrum sharing and trading, that allows the licensees to voluntarily
share and/or trade their spectrum through commercial agreements.
Spectrum re-farming and migration
74. SACF supports the proposals in section 18 for allowing the re-farming of
spectrum for use by a different technology and for migration (both in-band
and out of band). This is critical and served as a vital efficiency tool while
licensees were denied access to high demand spectrum and continues to
be used as an effective efficiency lever.
Spectrum for community use
75. It is imperative that when licensing the proper due diligence has been
done ahead of the licensing process so that there a is a reasonable
assurance the licences are sustainable. This becomes more critical for smaller
licences as the applicants / owners are likely to be less resourced and
therefore more vulnerable to losing the licence and investment in the
licence. In any event, all licensees should have opportunity to bid for such
arrangements. ICASA should focus on maximising efficiency when
adjudicating the process.
76. The provisions in the draft policy on the licensing of community networks
is vague therefore making it unclear of what the DCDT wants to achieve with
the licensing of the community networks. We therefore seek clarity and
would appreciate a conceptual framework to assist. Had this been included
we would have been better able to offer more detailed commentary on
how we think that we can contribute to increasing the success and
sustainability of these licences.
77. Much of the provisions surrounding the Community networks is unclear
although we are able to draw on previous experiences of the licensing of the
Under-Serviced Area Licences (USALs). While these may initially have been a
noble concept it very quickly turned into a considerable nightmare for the
licensees and failed to achieve the policy objectives. There were several
factors that attributed to the policy failure. Initially there was the licensing a
pilot number of licensees which quickly turned into a considerably more
significant challenge when 27 were licensed.
78. The policy indicates the intention to rollout community networks, but it is
unclear as to the objectives underpinning the proposal. It is not clears to the
distinction from Class licences, or the level of support that will be offered to
these community networks
The SACF’s comments on the DRAFT NEXT GENERATION SPECTRUM POLICY 15
79. While there is little clarity on the intention and scope for the establishment
of community networks we are of the view that any entity or licensee offering
services on a commercial basis must be charged for access to spectrum. This
principle of course, applies to licensed spectrum only where spectrum is
protected from interference. The principle that the SACF supports is for all
entities using spectrum regardless of the ownership to pay for access on a
fair, transparent and non-discriminatory basis, as it promotes the efficient use
of access to spectrum.
Alternative Network Infrastructure
80. Our members were unable to settle on an approach on how best access
to Wi-Fi would be provided. Instead, the debate focused on some of the
differences between the South African context and other jurisdictions. And
that additional focused research may be required first to arrive at the optimal
model.
Spectrum for use by State Digital Infrastructure Company (SDIC)
We were unable to provide commentary in this regard due to the divergent
views of members. Our members will therefore set out their positions in their
individual submissions.
Universal Service Obligations (USOs)
81. We note the current trend for licence conditions appears to be wide ranging and
overly prescriptive.
82. In addition to the licence obligations, licensees contribute to the Universal Service
and Access Fund (USAF) annually despite the inefficiencies and lack successful
implementation of the USAF.
83. Some of the most successful licence obligations implemented were the initial
licence obligations of MTN and Vodacom which were later adopted with the licensing
of Cell C.
84. MTN and Vodacom had two broad categories for licence conditions that fell
under the Joint Economic Development Programme (JEDP) coupled the obligation
to rollout Community Service Telephones (CSTs).
85. Each licensee was required to have obligations split among the two categories,
viz. JEDP and CSTs. The split was at the discretion of the licensees. For
example, licensees were required to rollout CSTs. Key measurement parameters were
developed which included the pricing, the quantum, and geographic spread.
The SACF’s comments on the DRAFT NEXT GENERATION SPECTRUM POLICY 16
86. MTN and Vodacom each developed different models to rollout CSTs, both
developed innovative models which produced the following results:
• Developed the first GSM operated public phone in the world
• Locally developed and produced a GSM pre-paid handset
• Were a platform for wealth creation because of the ownership and revenue
models.
87. At the time the obligations addressed a critical yet basic need for consumers, by
providing telephony to marginalized consumers who did not have individual devices
or provided a more affordable telephony as a function of the CST tariffs which were
considerably lower than other tariffs.
88. At the peak of the success of this model CSTs was one of the key revenue streams
on networks.
89. Universal service obligations have a finite life as it addresses a specific need and
once achieved, no longer has relevance and should be completed once the
objective has been achieved. As mobile access became more widespread and tariffs
more innovative the relevance of CSTs decreased to the point of no longer being
relevant. Therefore, obligations must be linked to usable lifespan of the obligation.
90. SACF considers that any Universal Service Obligations must be relevant,
balanced, fair and transparent and ought to promote innovation.
Additionally, licensees should not have to “pay and play” – it should be one
or the other. To this end, those licensees that have USOs imposed on them
should not also have to make payments into the Universal Service Fund (USF).
Annexure A: Roadmap towards the Sunset of older generation Networks
The Switch-Off of 2G and 3G spectrum
91. The SACF recognizes the need for the switch off of 2G and 3G networks to allow
licensees to refarm and reuse the spectrum already licensed to them in a more
efficient manner. However, licensees alone cannot achieve this. Instead, it needs to
be a more concerted collaboration with all stakeholders including Government.
92. Licensees are not the only entities able to bring devices into the country, as anyone
can do so once the device has been type-approved, e.g. Retailers such as Pep,
Pick’nPay and other chain stores also import and sell devices. In addition, standalone
stores not affiliated to chains or brands also sell devices as do retailers at informal
stores at flea markets etc.
The SACF’s comments on the DRAFT NEXT GENERATION SPECTRUM POLICY 17
93. Devices are type approved indefinitely, which means that devices may continue
to be brought into the country even long after the useful life is over, and the device is
deemed inefficient and obsolete.
94. This has long been an issue that has been raised with ICASA. The consequence of
this is that these legacy devices are typically cheap and are pervasive among a large
number of users who insist on using them in spite of their inefficiency.
In addition, they are not easily persuaded to relinquish those devices in lieu of newer
more efficient devices.
95. A key consequence is that spectrum in these bands is then tied up by users of
legacy devices. As these users form a large part of their customer base, licensees
have been unable to simply terminate services to these consumers. Consequently,
they have been unable to switch off the 2G and 3G layers of their networks.
96. As we move forward and deeper into a digital economy and digitisation of all
aspects of our lives the focus must urgently shift to the rollout of 5G and newer
technologies. This is imperative.
97. Such a transition will, however, require a concerted effort by Customs to prevent
such devices from continuing to be brought into the country. There must be critical
awareness campaigns to alert consumers to such a switch off and urgent migration,
as well as the medium-term implications of purchasing a legacy device.
98. In addition, ICASA must urgently amend the type-approval regime for devices to
include a limitation on the duration of the type-approval. This must be the case going
forward for all devices.
99. The relevant line departments must begin looking at the creation of incentives to
discourage the continued sale of these legacy devices. This could be the beginning
of a dialogue to potentially look at an incentive structure to encourage the sale
of more efficient 4G devices.
100. All SACF members that hold electronic communications and service licensees
contribute to the Universal Service and Access Fund, with some having done so since
1998 and the USAF is yet to be used to subsidise poorer users or needy groups of
people for universal access and service.
101. The critical importance of effective and meaningful participation in the digital
economy appears to present the ideal opportunity to effectively use and direct some
of those funds to the cause for which it was intended. The SACF looks forward to
engaging further in this regard with the Department on this critical issue.
The SACF’s comments on the DRAFT NEXT GENERATION SPECTRUM POLICY 18
102. This may be best achieved by enticements which could include tax incentives or
even funded by some of the proceeds raised from the recent auction of high demand
spectrum that raised close to R15billion, exceeding the initial expectations of the
projected revenue of the auction.
103. Key among incentives scheme ought to be tax deductions for low end 4G
devices as this is expected to drive down prices making them more affordable.
● Shutdown of 2G and 3G –
○ The SACF considers that there is a need for multi-stakeholder
consultation in setting the dates for the shutdowns.
○ 3G could be shut down before 2G due to –
■ Issues with 3G technology such as “breathing” where
the network coverage shrinks with increased loading;
■ Large number of 2G only devices on the networks that
would need to be replaced
Annexure B: Roadmap towards new round of Spectrum Licensing
● Licensing of Community Networks and remainder of IMT spectrum
designated for SMMEs by 31 July 2023 –
○ The SACF seeks clarity on how Community Networks are
different from Class ECS/ECNS licences.
○ SACF suggests that a study should be conducted into the
lessons learnt from the failure of USALs to avoid those mistakes
with Community Networks
Conclusion
104. The SACF welcomes the opportunity to comment on the draft Next Generation
Spectrum Policy and is hopeful that the Department will hold hearings to engage with
stakeholders on their commentary on the draft policy.
105. The Department ought to reconsider its proposals in respect of the conflation of
the Roles and Responsibilities of ICASA and the Minister. It is a useful practice to explain
to stakeholders the rationale for such a proposal, as it would allow stakeholders to
comment in a more meaningful way. Our submissions in this regard have been without
as stakeholders are unclear as to the problem attempting to be cured.
106. All spectrum must be licensed:
– in an efficient manner which seeks to promote economic growth;
– protects current investment, promotes further investment in relevant existing
technologies;
– pragmatically encourages the use of new technologies without getting
caught up in the hype of technologies that may not be sustainable; and
The SACF’s comments on the DRAFT NEXT GENERATION SPECTRUM POLICY 19
– licence sustainably.