Sentech delay enrages telecoms
Johannesburg - Government information technology company
Sentech sits idle with technology that promises not only greater connectivity,
but increases the speed of doing business and can contribute millions to the
Mobile telephony companies are fuming at the loss of
business opportunities from the delay in the issuing to telecoms companies by
telecommunications regulator Independent Communications Authority SA (Icasa) of
the high-demand 2.6 frequency ideal for the implementation of 4G signal for
4G networks are the successors to the current and most
commonly used 3G network.
4G networks are also referred to as Long-Term Evolution
systems. It offers and supports higher-speed wireless services and greater
broadband coverage - including to rural areas.
Telecoms companies complain that state-owned companies,
which do not use the valuable public resource, have been allocated the
much-prized frequency and this is a disadvantage to the economy, the public and
The two spectrums at the heart of the heated battle are
called the 800MHz and the 2.6GHz. They are the two spectrums on which 4G
networks can best operate.
According to Icasa spokesperson Paseka Maleka, the regulator
delayed the issuing of the spectrum to ensure Communications Minister Dina
Pule’s forthcoming policy recommendations on high-demand frequency are taken
Icasa received 20 submissions from companies wishing to bid
for the use of the two spectrums for 4G networks.
MTN has called Sentech and Neotel “spectrum hoarders”, with
no capacity to roll out the high-demand frequency for 4G use. Telecoms analysts
have also accused the government and Icasa of nationalising frequency and
stunting the national GDP growth.
They assert that for Sentech to roll out a national network
will be a significant drain on public and Treasury funds.
Industry players point to a recent World Bank research
document doing the rounds and indicating that each 10% of incremental broadband
penetration adds 1.38 percentage points of incremental GDP growth and at least
20 000 direct jobs.
They complain that 40% of the high-demand spectrum for the
roll-out of 4G has been allocated to Sentech, Wireless Business Solutions and
An MTN document states that this has been done “at the
stroke of a pen and without a beauty contest, auction or regard to past
performance”. This, the telecommunications giant says, raises “serious
Technology companies said this week that 2012 was to be the
year of the implementation of 4G - the fourth-generation LTE (Long-Term
Evolution) - in South Africa, but that the communications ministry and Icasa
have both delayed the emergence of this new era in mobile technology growth by
postponing the auction of frequency for use by operators in the country.
They said that while mobile companies internationally have
begun the migration on to this profitable high-speed frequency, in a scramble
for competitive advantage, South African-based companies are facing relegation
in the race to be the first to market.
Safaricom - in East and Central Africa - has begun setting
up 4G networks. In October 2010, the company awarded Chinese telecoms giant
Huawei the contract to go commercial this year. Movitel, the Angolan
telecommunications company, signed a contract with Huawei to deploy 4G and
launch a commercial network by the end of next month.
In Sweden, TeliaSonera began to deploy 4G in Stockholm and
in Oslo (Norway) in November. Bel Canada, Sprint Nextel, Verizone and Vodafone
have all begun their migration on to 4G.
According to the latest edition of Deloitte Review, the
arrival of the 4G era has caused a “scramble for competitive advantage, which
has reached fever pitch”. The semiannual magazine has for a number of years
been researching the impact of the 4G era and has published a series of
It forecast that 4G services will generate more than $11bn
(about R87bn) in service revenue in the US by 2015, and global 4G subscribers
will number 303.1 million by 2014.
Much to the displeasure of locally based telecommunications
companies, Icasa has announced its decision to postpone the auction of what is
termed the 1 800 and 2.6 spectrum, ideal for the roll-out of 4G, indefinitely.
Telecommunications analyst Arthur Goldstuck said this week:
“The delay is a hot topic on the agenda of telecommunications companies because
they have been preparing commercial launches of 4G and now they have to wait
for an undetermined period of time. The regulator’s uncertainty is a concern to
Goldstuck said that the delay is a legacy issue. “The state
seems to continue to believe that frequency is a scarce resource that it must
hold on to. It is as though spectrum has been nationalised.”
A source close to the department of communications said
government feared that the big players would hog the spectrum and crowd out
small players in the future 4G market. He said the government was increasingly
wary of holding an auction to distribute frequency, “as this would advantage
big telecoms players as valuable frequency would go to the highest bidder and
the smaller players would be outbid.”
The department’s spokesperson, Siyabulela Qoza, said: “The
International Telecommunications Union has agreed on the identification of
globally available spectrum and a process is under way for the minister (Pule)
to instruct Icasa to conclude the licensing of this spectrum. The department
will issue the policy directive after all the comments have been thoroughly
Shalate Davhana, Huawei SA’s corporate affairs manager, said
her company is ready to launch 4G, but are unable to do so because of the
unavailability of frequency.
“We have competitively priced and reliable 4G products, but
(we) are unable to go commercial here because the opportunity to acquire
frequency does not exist yet in South Africa,” said Davhana.
- City Press