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Tough is an understatement,” answered Icasa acting chair Rubben Mohlaloga, when asked by finweek how his first few months in the job had been.
The Independent Communications Authority of South Africa (Icasa) has found itself on the receiving end of government legal challenges and consumer activism campaigns in the recent past. At the same time, Mohlaloga’s job as acting chair is also the subject of a legal challenge from Icasa councillor Nomvuyiso Batyi.
Batyi has alleged that minister of communications Faith Muthambi gave her a letter of appointment as acting chair, but refused to gazette her appointment unless she made sure that a television-broadcasting license went to a company owned by the controversial Gupta family.
Both Muthambi and the Gupta family have denied the allegations.
Who is Rubben Mohlaloga?
Mohlaloga is a trained teacher. He comes from a “poor” background in Limpopo and wanted to be a lawyer or a journalist, but ended up studying teaching. “I fell in love with the teaching profession,” he said. “I suspect I may retire to teach again.”
Officially Mohlaloga joined the Congress of South African Students in 1988 and the ANC in 1991, but says he was active in ANC politics before the organisation was unbanned. He has served both locally and regionally for the ANC and SACP and served as a member of Parliament (MP).
Mohlaloga served as the ANC Youth League’s deputy president from 2001; first under the presidency of Malusi Gigaba who took the reins in 1996, and then under Fikile Mbalula who took over in 2004.
Mohlaloga was arrested in 2012, alongside two other accused, on charges of theft and corruption related to the misappropriation of R6m from the Land Bank’s AgriBEE fund.
At the time of the alleged theft, Mohlaloga was an MP and chairperson of the agriculture portfolio committee in Parliament.
The state alleges that R866 000 of the stolen money was used to buy two BMWs for Mohlaloga.
All the accused were expected to appear in the Specialised Commercial Crimes Court in Pretoria this year, but the case was postponed.
Mohlaloga said he had no comment on the matter, “safe to say that the charges are baseless and with suspicious motive”.
He joined Icasa as a councillor in July 2013. Before that he had held the position of chief director of policy at the department of communications. The department was later split into two, namely communications and telecommunication & postal services.
#DataMustFall
Speaking about the #DataMustFall campaign started by DJ TBo Touch in September, Mohlaloga says “we welcome consumer activism in our sector. Consumers must appreciate that they have rights that must be protected.”
The DJ appealed to the network operators to lower their costs within a month, or he would move to the network provider that did make a change. The hashtag trended on Twitter and soon Mohlaloga was calling up the DJ to set up a meeting.
The campaign gained support from students, unions, political parties and even became the focus of the parliamentary portfolio committee on communications.
Icasa has been busy this year with a roadshow taking their regulatory work to diverse communities, exposing them to its complaints mechanisms that consumers can use to protect their rights.
“We take bringing down the cost to communicate very seriously,” says Mohlaloga. “I hope the operators are listening to consumers.”
But not everyone is convinced.
“If Icasa thinks that the mobile operators hold consumers’ interests above those of their shareholders, its delusional,” said an industry insider.
Spectrum auctions and high court interdicts
Another pressure point for Icasa has been its plan to auction off valuable spectrum to the highest bidders.
Icasa announced its decision to hold a spectrum auction in July this year. The regulator stipulated that there would be five lots of spectrum on auction, lots A to E. Lot A would not be part of the auction and would be allocated through another process.
Mohlaloga said Lot A was intended for the open access network that the ministry of telecommunications and postal services wanted to create.
The network is detailed in the department’s ICT Policy White Paper, which was only published after the spectrum auction was announced. Icasa stipulated five lots for auction that included spectrum allocations in the 700MHz, 800MHz and 2?600MHz bands.
Icasa stipulated that each lot would have a reserve price of R3bn and that applicants would only be allowed to bid for one of the lots.
It had initially stipulated an October deadline for its invitation to apply, but later extended it till November. The regulator had hoped to announce the results of the auctions by January next year, and issue licences in March.
However, then telecoms and postal services minister Siyabonga Cwele took the regulator to court, seeking and receiving an interdict against the auction process.
The High Court ruled that the auction process should be subject to a full review in court and interdicted Icasa against continuing with the process.
A date has not been set for the case; some have suggested it may only be heard in the middle of next year.
It has been suggested that the licensing process could take seven to eight months, so this process may well drag into 2017, even without further legal challenges.
“It’s going to take a long time,” said one industry insider.
In the meantime the department has published its ICT Policy White Paper. “There is no point in Icasa continuing with the auction,” said a department insider. “There is policy now and they are required by law to consider it.”
Mohlaloga said that Icasa is busy studying the policy paper as required by the Electronics Communications Act.
“In our work we have to consider policy,” says Mohlaloga. “We don’t necessarily have to agree.”
“We hope Icasa revise the ITA,” said an industry insider. “The policy is not asking for an auction, it’s saying invest this money in a public network instead.”
“They [the operators] should come together and run this network on a voluntary basis,” said the insider. “If they don’t want to, they don’t have to be party to the network, but they can still buy capacity from the network.”
Many vocal critics have dismissed the plan as doomed, insisting the investment case was not there for the operators if they don’t own the spectrum.
The spectrum
However, not all of the 700MHz to 800MHz and 2?600 MHz bands of spectrum can be used immediately.
Traditionally the 800 MHz is used for mobile. There is 60 MHz of this, and it is anticipated this could accommodate three operators at decent speeds, with each receiving an allocation of 20 MHz.
When it comes to the 700 MHz, there are currently no gadgets in South Africa that can pick up the signal, so this will delay any roll-out in the market using this band.
Numerous industry players that finweek spoke to insist that the two lucrative spectrum bands are lots C and D. This is because they have allocations in the 800MHz band. “We are not talking about spectrum of equal value,” said one industry insider, who pointed out that despite this, operators must pay the same service fees as for the more lucrative lots.
Critics argue that Icasa with its planned auction was merely going to hand over the most valuable spectrum to the dominant players, MTN and Vodacom.
“The incumbents are dictating the conversation,” said one industry stakeholder who did not want to be named. “They don’t care about the 400 other licensees,” he said. “There is no survival without spectrum. If you don’t have it you are not going to be a player.”
Another industry insider said Icasa’s auction amounted to selling off the spectrum to very powerful companies and then expecting itself, a “weak regulator”, to keep them in check.
Critics have argued that the auction model, which was widely used in Europe and the USA, has led to massive consolidation. Small players with no spectrum end up being acquired by larger firms that do.
Some critics argued that the auction amounted to a death sentence for Cell C and Telkom, which is why they were considering legal action. Mohlaloga said keeping track of consolidation in the market would be critical.
This article originally appeared in the 10 November edition of finweek. Buy and download the magazine here.
