Under the leadership of Communications Minister Mondli Gungubele, the Next-Generation Radio Frequency Policy for Economic Development was recently introduced. Published in the Government Gazette, this policy is a significant step towards establishing a secondary spectrum sharing and trading market to promote the long-term public interest in using spectrum as a finite resource.
Approved by President Cyril Ramaphosa’s Cabinet in November 2023, the policy has a clear objective: to empower and value small and medium-sized enterprises (SMMEs). Unlike the current regime, which primarily benefits larger industry players, this policy ensures that SMMEs have better access to spectrum, thereby fostering a more competitive telecommunications industry.
To achieve this, the policy introduces a secondary market that allows SMMEs to engage in spectrum-sharing and sub-letting agreements with larger industry players. This will enable more equitable access to spectrum, addressing the imbalance observed in the previous spectrum auction, where major mobile operators spent significant amounts to acquire radio frequency bands. This underscores the government’s commitment to a fair and level playing field.
The policy outlines various market-based approaches, including spectrum trading, sharing, dynamic spectrum access use, and sub-letting and sharing. These approaches provide more flexibility and opportunities for SMMEs to participate in the spectrum market, marking a significant shift from the previous regime that favoured larger industry players.
Furthermore, the Independent Communications Authority of South Africa (Icasa) will be vigilant in regulating this market to prevent misuse and ensure fair competition. It will collaborate with the Competition Commission to oversee spectrum acquisition and prevent monopolisation and anti-competitive practices, instilling confidence in the market’s integrity.
The policy also introduces the “use it or lose it” principle to discourage hoarding of spectrum that is not efficiently utilised. Spectrum that remains unused for over 24 months will be subject to this principle. Additionally, Icasa is tasked with encouraging the use of new technologies that enable more efficient spectrum sharing and usage.
These clearer regulations and new rules for spectrum sharing and trading are expected to bring positive changes to the industry. However, there have been legal challenges, with Vodacom contesting spectrum pooling agreements approved by Icasa, alleging that they provide unfair competitive advantages to its rivals.
In summary, the Next-Generation Radio Frequency Policy for Economic Development aims to create a fair and competitive environment for spectrum usage, benefiting both larger industry players and SMMEs.
