MTN has warned that it will face another “network crunch” if temporary licenses for precious radio frequency spectrum are not extended beyond 31 May 2021.
Spectrum is the raw capacity wireless networks rely on. Such a network crunch could result in degraded network performance for South Africa’s two largest cellular network operators, and prevent cheaper mobile data prices.
“This situation should be avoided at all costs, for the benefit of the nation’s citizens,” said MTN South Africa’s executive for corporate affairs Jacqui O’Sullivan.
“MTN is already paying for the use of the temporary spectrum and that amount is at the discretion of ICASA.”
MTN’s warning comes after the Independent Communications Authority of South Africa (ICASA) said that it wants to stop extending temporary radio frequency licenses given to mobile networks at the start of COVID-19 lockdown.
Temporary spectrum licenses were given to South Africa’s mobile network operators as part of COVID-19 disaster regulations, which were issued in response to the national state of disaster declared by President Cyril Ramaphosa on 15 March 2020.
ICASA said that the objective of the temporary spectrum was to enable operators to deal with the anticipated rise in demand for network capacity and data services as a result of the COVID-19 pandemic.
It was also to allow network operators and service providers to enhance their current services.
Operators said that they have used this temporary spectrum to increase capacity on their networks. Vodacom and MTN have also used some of the temporary spectrum to launch 5G services in South Africa.
ICASA extended the validity of the temporary spectrum licenses after it became clear that it would not be able to conduct its planned auction for high-demand radio frequency spectrum by the end of December 2020.
It extended the temporary licenses again when the High Court interdicted it from conducting the auction as planned.
The interdict was a result of legal action brought by Telkom against ICASA.
Telkom objected to the process ICASA followed, said that ICASA is not doing enough to tackle the dominance of Vodacom and MTN with the spectrum auction, and raised concerns over the fact that some of the frequency bands ICASA wants to auction still contain analog TV signals.
Telkom argued that once the spectrum auction is done government has no incentive to finish the digital TV migration. It could just pocket the money and leave the old analog TV frequency bands occupied and unusable for mobile networks.
These analog TV signals either need to be switched off as part of South Africa’s digital TV migration, or Telkom said it needs assurances from the court in the form of an order compelling the South African government to complete the digital migration.
In addition to the case brought by Telkom, MTN launched a legal challenge of its own over the way ICASA proposed to auction off the precious high-demand spectrum.
MTN objected to ICASA’s plan to exclude it and Vodacom from the first round of the auction, and the lack of clarity regarding which spectrum bands would be up for grabs in this exclusive first round.
MTN warned that this could result in smaller network operators picking up the spectrum the bigger players need for much cheaper than Vodacom and MTN would have been willing to pay.
If this were to happen, MTN said it would discourage the larger cellphone networks from participating in the auction at all, potentially costing Treasury millions or even billions of rand.
Vodacom has disagreed with MTN, saying that there is a compromise to be made between the bigger players and ICASA.
As a result of these court cases, ICASA said it does not wish to extend the temporary spectrum licenses issued in response to the national state of disaster any longer.
“The Authority does not intend to further extend the expiry date of the temporary radio frequency spectrum licenses beyond 31 May 2021 due to the issues raised in the pending litigation and the interim interdict which has been granted against it,” ICASA stated.
MTN said that it would be a mistake to refuse the extension of temporary spectrum licenses before the spectrum auction is completed.
“We believe that ICASA has used MTN’s motivations for extension of the temporary spectrum as a basis for the current and previous renewals of the usage of temporary spectrum,” said Jacqui O’Sullivan, an executive for corporate affairs at MTN South Africa.
O’Sullivan said that MTN has in the past made several motivations to ICASA, supported by evidence, of the benefits derived by consumers on the use of the temporary spectrum and spectrum pooling.
“This includes more than 1,000 educational and health websites that have been zero-rated through the course of the pandemic, as well as the further boosting of coverage and network quality in rural and peri-urban areas, where demand shifted during the homeschooling and ongoing work-from-home requirements,” stated O’Sullivan.
“The evidence of the benefits derived by consumers during this pandemic has not changed and continues to support the reason for extension.”
MTN said it is looking at ICASA’s request for input regarding its review of the COVID-19 National Disaster Regulations and will make a submission by the 7 May deadline.
South Africa’s other mobile network operators declined to comment in detail about ICASA’s intention to stop extending the temporary radio frequency spectrum licenses.
Cell C said it supports the draft regulation on spectrum pooling and sharing by licensees mentioned in ICASA’s call for submissions.
According to Cell C, provisions for spectrum pooling and sharing will ensure that operators improve signal coverage, access to broadband data services, and provide a better consumer experience.
Rain CEO Brandon Leigh said that they are also busy making a submission to ICASA and are cognizant of the impact this may have on the legal battle between Telkom and ICASA.
“Unfortunately, as you can understand, I cannot comment at this stage,” Leigh said.
Telkom said that it is still studying the document and will be making a written submission to ICASA.