The Covid19 emergency opens additional spectrum for mobile operators in South Africa

On 12th March 2020 the World Health Organisation (WHO) declared Covid-19 to be a pandemic.

The relevant legislation in South Africa is the Disaster Management Act of 2002, under which the government declared a national state of disaster (GG 43096). It also issued directions to address, prevent and combat the spread of COVID-19 (GG 43147).

On 26th March, the Minister of Communications issued directions under the Disaster Management Act covering the electronic communications, postal and broadcasting sectors (GG 43164). This required, inter alia:

6.10          To the extent possible, the Authority must relax spectrum regulations to enable the temporary licensing of all available spectrum bands including the unassigned high demand spectrum for duration of the COVID-19 national disaster.

6.11          The temporary assignment of the unassigned high demand frequency spectrum must be focused on those licensees that would be able to implement and use assigned frequency spectrum for the duration of the COVID-19 national disaster on an expeditious basis. Frequency coordination and planning will be necessary to effect this assignment.

On 3rd April, ICASA issued its National Disaster Regulation (GG 43207). This gave a three month delay in payment of spectrum fees. It also made available a substantial amount of spectrum:

6 (1) During the National State of Disaster, any licensee may apply to the Authority to dispense with the prescribed licensing procedures for the licensing of the Radio Frequency Spectrum, including high demand spectrum, in order to enable it to deal with the anticipated rise in demand for network capacity or data services.

ICASA offered to make available several bands without charging a fee:

• 700MHz,
• 800MHz
• 2300MHz
• 2600MHz and
• 3500MHz

The assignments would be terminated on 30 November 2020 or three months after the end of the emergency, whichever was the sooner.

Applications have to be made by 16:00 on 9th April 2020.

The first challenge is whether any of the operators have equipment in position or in store that could be rapidly deployed to make use of any of the proposed spectrum. Given the timescale, it seems unlikely this could be new equipment shipped from manufacturers in China or Europe, not least given their present challenges.

The second challenge will be getting the spectrum back from the operators. Clearly this is set out in the regulations. However, by October or November customers might be accustomed to the newly improved network capacity and being told by the operators that the government wants the spectrum back would not be well received. It might well be that a payment for the continued use of the spectrum would be easier and welcomed by Treasury.

In its press release, ICASA stated:

In light of the recent economic developments (particularly the country’s downgrade by ratings agencies) the release of high demand spectrum has become critical as it is one of the key interventions to stimulate economic recovery. The Authority will take all measures necessary to ensure that the permanent licensing process for HDS is expedited. In this regard, the Authority is sensitive to the fact that the emergency release of the spectrum to meet the challenges posed by COVID-19 pandemic, should neither delay nor undermine processes to license the spectrum on a permanent basis. Hence the criteria to be used to release the spectrum for use on an emergency basis shall be fair and non-discriminatory.

The need for economic growth is greatly increased by the Covid-19 emergency, hence the pressure to assign spectrum.

The unspoken issue is the Wholesale Open Access Network (WOAN). The idea that a new player could raise the funds to build the WOAN always looked uncertain. Raising money to bid for spectrum and to construct a network in the present crisis looks vastly more challenging and even fanciful. Realism might suggest that ICASA will be stuck with the existing players and have to make the most of the five.