WOAN is dead but measurable interventions still imperative

• South Africa's government has withdrawn its policy requiring high-demand spectrum to be reserved for a Wireless Open Access Network (WOAN).
• Minister Solly Malatsi confirmed the withdrawal, which followed seven years during which the WOAN failed to be licensed.
• This decision frees up spectrum in the 700MHz, 800MHz, 2600MHz, and 3500MHz bands for licensing by ICASA.
• Industry bodies welcomed the move, noting the WOAN was a 'non-starter' and its abandonment ends prolonged uncertainty.
• The Electronic Communications Amendment Bill has been tabled in Parliament and is expected to strengthen wholesale options and enhance market competition in the telecoms sector.

The official withdrawal of the policy has now cleared the path for the Independent Communications Authority of South Africa (ICASA) to license the previously reserved spectrum, ending a prolonged period of uncertainty in the sector.

The South African government has officially abandoned its policy to reserve high-demand spectrum for a Wireless Open Access Network (WOAN), bringing an end to a protracted policy stalemate. This significant development was confirmed last month by Minister Solly Malatsi, who oversaw the withdrawal of the requirement that specific high-demand spectrum bands be set aside for the WOAN. The decision comes after a seven-year period during which the proposed WOAN failed to secure a license, leaving valuable spectrum unutilized.

The WOAN concept envisioned a single, consortium-built network designed to offer high-demand spectrum on a wholesale basis to various telecommunications operators. Government officials had initially championed this model with the expectation that it would foster greater competition within the telecoms market, ultimately leading to reduced data prices for consumers. Proponents within the industry also believed the WOAN could dismantle existing monopolies and usher in much-needed transformation by entrusting spectrum allocation to an experienced consortium.

However, the WOAN model faced considerable skepticism, partly due to its unsuccessful implementation in Mexico, raising concerns that South Africa might experience a similar outcome. The official withdrawal of the policy has now cleared the path for the Independent Communications Authority of South Africa (ICASA) to license the previously reserved spectrum, ending a prolonged period of uncertainty in the sector. This move has been widely welcomed by industry bodies such as the Internet Service Providers' Association (ISPA) and the Association of Comms and Technology (ACT), both of whom highlighted the importance of making new spectrum available for the telecoms sector.

The ability of all operators to deliver high-quality, high-speed wireless services is directly dependent on their access to sufficient spectrum. The WOAN, despite its ambitious goals, ultimately proved to be a non-starter, prompting industry stakeholders to commend the Minister for returning the idle spectrum to ICASA for allocation and use by South African consumers. While the decision is lauded, there is a lament that the process took several years to reach this conclusion.

Nomvuyiso Batyi, CEO of ACT, specifically noted that high-demand spectrum in the 700MHz, 800MHz, 2600MHz, and 3500MHz bands had been reserved for the WOAN, which never materialized. This makes these crucial spectrum bands available for ICASA to license. ACT views the decision as long overdue, emphasizing that the benefits of increased capacity, improved quality, and broader coverage will only materialize once this spectrum is licensed and network infrastructure is deployed.

ISPA's perspective is that the WOAN was fundamentally the wrong solution from its inception. The core objective of the WOAN was to establish a privately-owned wholesale network to stimulate competition in retail services. However, the strategy to achieve this was deemed inadequately conceived and was at odds with the established strategies of major incumbent infrastructure providers. Instead of attempting to create a new network to compete with large, existing ones, ISPA suggests that the government should focus on ensuring that current networks provide competitive wholesale options.

The existing Electronic Communications Act (ECA) already outlines a two-tiered market structure, where Electronic Communications Network Services (ECNS) licensees operate wholesale networks, and Electronic Communications Services (ECS) licensees sell retail services utilizing those networks. In the mobile sector, mobile network operators typically fulfill both ECNS and ECS roles for most consumers, offering only limited wholesale options to other ECS providers.

ICASA and the government possess the regulatory tools to address this issue within the current framework and could further strengthen legislation to enhance wholesale options. Notably, the Electronic Communications Amendment Bill, which has been tabled in Parliament, is specifically designed to achieve this objective. The manner in which ICASA proceeds with the design of the spectrum licensing process will be critical.

ACT's Nomvuyiso Batyi underscored that the eligibility criteria, assignment methodology, and license conditions determined by ICASA will significantly influence the competitive landscape between established operators and newer or smaller market entrants. The licensing of high-demand spectrum, coupled with the proposed amendments to the Electronic Communications Act, will be pivotal in reshaping market access and competitive dynamics for telecoms operators in South Africa.

Lawyers advising telecoms clients in South Africa should closely monitor ICASA's impending high-demand spectrum licensing process and the proposed amendments to the Electronic Communications Act, as these developments will reshape market access and competitive dynamics for operators.

Source: Reporting based on industry insights.