The GSMA yesterday called upon South African communications regulator ICASA, along with the country’s government, to act now and make key decisions on the mobile spectrum allocation and taxation policy. According to the findings of an independent report by analyst firm Analysys Mason, commissioned by the 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 percent household penetration. With South Africa’s relatively poor fixed line infrastructure, the role played by Mobile Broadband in meeting these targets will be significant. 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 percent of South Africa’s GDP (ZAR 72 billion) and as many as 28,000 jobs by 2015. Yet this can only be possible if roadblocks to Mobile Broadband deployment are removed.
‚The new Minister for Communications 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. ‚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 is leading 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. 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 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. 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.
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.