Broadband: Urgent intervention needed

2010-11-11 08:03

Cape Town - Industry lobby group GSM Association has called on the Independent Communications Authority of South Africa (Icasa) to support mobile broadband services in South Africa by making key decisions on mobile spectrum allocation and taxation policy.

According to the findings of an independent report by analyst firm Analysys Mason, commissioned by the Global System for Mobile Communications Association (GSMA), spectrum allocation and the levying of additional taxes on mobile services are the major barriers to wider mobile broadband deployment and the launch of Long-Term Evolution (LTE), the next generation broadband technology in South Africa.

The South African government has set national coverage targets of universal broadband access by 2019, with at least 15% household penetration. However, according to GSMA, with South Africa's relatively poor fixed line infrastructure, the role played by mobile broadband in meeting these targets will be significant.

It pointed out that mobile broadband is also a key driver of social and economic advancement.

The Analysys Mason report forecasts that mobile broadband and related industries will generate 1.8% of South Africa's GDP and as many as 28 000 jobs by 2015. Yet this can only be possible if roadblocks to mobile broadband deployment are removed, it said.

"The new Minister for Communications (Roy Padayachie) has this opportunity to make crucial decisions that will enable South Africa to benefit from the power of connecting people and businesses with state of the art mobile technology," said GSMA spokesperson, Ross Bateson.

Speaking at AfricaCom in Cape Town, he added: "It is imperative that Icasa provides clarity over future spectrum release plans and offers assurances that spectrum awards will follow international best practice. Harmonised spectrum allocations must be made to bring South Africa in line with the rest of the world, and to maintain the momentum of HSPA and hasten the arrival of LTE."

HSPA leads the way in the South African broadband market, currently connecting 62% of broadband subscribers. The technology is, at present, the most cost-effective broadband solution for the country, offering fast deployment and low capex investment per subscriber, GSMA points out.

HSPA also provides operators with a natural evolution path to LTE, if the appropriate spectrum is made available. LTE deployments in harmonised spectrum bands benefit from large economies of scale which drive down equipment and handset costs, providing affordable high-speed internet connectivity and access to critical new services for millions of people in both rural and urban areas, the lobby group said.

According to GSMA, the global mobile industry favours ITU Option 1 for 2.6 GHz spectrum harmonisation for the deployment of LTE, which has been adopted by the majority of mobile operators worldwide.

Wealth creation

However, a legacy allocation of spectrum in this band to Sentech, which has remained dormant and unused for many years, currently blocks Icasa from allocating this spectrum for mobile.

"In order to give South African consumers and businesses the most cost-effective access to broadband, and to help the South African government achieve its national broadband coverage targets, spectrum in the 2.6 GHz band must be re-allocated for the deployment of LTE as soon as possible, GSMA said.

On the issue of taxation, the Analysys Mason report also states that additional taxes are making mobile broadband services too expensive for many South Africans. The South African government has implemented a taxation approach that actively reduces mobile broadband penetration by putting an economic burden on the purchase of handsets and services.

"A reduction in these 'special' taxes will translate into higher mobile broadband service adoption and more wealth creation reflected in additional GDP growth," GSMA concluded.

  • KP - 2010-11-11 08:47

    Taxes taxes taxes! Why is there now so much emphasis on taxing the life out of the public? The government has removed practically all tax breaks available to the middle class (car allowances, medical aid etc.), introducing the new NHI taxes & toll roads - and here's yet another tax! More of this, and it may be worth looking for a country that's not out to fleece the minority taxpayer to provide for the majority parasites..

  • GB - 2010-11-11 09:45

    I am working in China and the call cost per minute for my mobile is 7 cents. Unlimmeted internet access is 800 rand per YEAR (contract). South-Africans are being ripped-off.

  • Rick - 2010-11-11 10:27

    Another example of how the ANC government gets in the way of growth, efficiency, and wealth creation.

  • Rick - 2010-11-11 10:28

    Another example of how the ANC government gets in the way of growth, efficiency, and wealth creation.

  • Rick - 2010-11-11 10:44

    Well said KP. We are being taxed into poverty with the labour laws that are creating unemployment and chasing away foreign investment at a rate of knots. Govt and cosatu would rather see our people starve than work for a reasonable wage to feed their families and prevent crime. Won't be long before Pravin introduces a car wheel tax cause it turns, in indicator tax cause it flicks, a shoe tax cause we walk on SA ground. Our future prospects look great in SA. Thank goodness I am on my last legs.

  • Mac - 2010-11-11 10:51

    Prices of new merc's are going up, someone needs to foot the bill

  • Alex - 2010-11-11 11:20

    Who can I complain to about the loss we suffer when the service providers take back unused data which you paid for just because you do not use it up within their time limit. I have got a contract with a service provider who loads my account monthly with my new cap after taking back the leftovers from the previous month. Why is this acceptable in the industry? The service providers do not refund you for the unused data.

  • Nigel - 2010-11-11 12:41

    KP, you have hit the nail on the head. Wait till the census is over and surprise, surprise we will have 10 mil more people in SA since the last count. VAT is next, they are and will continue to suck the tax payer dry. The story revolves around infrastructure and the rollout out to the masses, why should we taxpayer support the incompetence, bungling and corruption of the current incumbents. This should funded by the fatcat mobile operators who have been fleecing the public for years. Enough said

  • xcal - 2010-11-11 12:44

    eish KP. you know a tick that has drunk the blood of a dog for 100's of years will explode someday. ask yourself. WHO IS THIS PARASITE IN AFRICA THAT HAS DRUNK HER BLOOD?

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