MTN, Vodacom denied data spectrum

Johannesburg, 28 Aug 2000

The Independent Communications Authority of SA (ICASA) has denied the two cellular operators, MTN and Vodacom, access to the high data potential 1800MHz cellular spectrum, but has left the door open to a swap for their current allocation of 900MHz.

"We concluded that the granting of the two applications [for 1800MHz] would not be conductive to fair competition within the mobile cellular telecommunications sector," says ICASA chairman Mandla Langa.

The two cellular companies in March applied for allocations of 1800MHz in the Gauteng, Cape Town and Durban-Pietermartizburg areas, saying they were rapidly running out of available 900MHz frequency due to massive subscriber growth.

ICASA says it cannot grant 1800MHz to the incumbents before the third cellular licensee, which has yet to be named, is given an allocation.

"We cannot grant MTN and Vodacom additional frequencies unless that would leave sufficient frequency spectrum in both 900MHz and 1800MHz frequencies for the third and fourth licensees," Langa says.

Instead, the ICASA council says, it will amend MTN and Vodacom`s licences to swap some of their current 900MHz allocation for 1800MHz, leaving blocks in both frequencies free to the third operator.

Public hearings on the proposed amendment, which proposes a swap of 2 x 2MHz in the 900 spectrum for 2 x 10MHz in the 1800, is expected to be completed within six weeks.

Both MTN and Vodacom have agreed in principal to such a swap.

"We are a little disappointed," said Vodacom corporate affairs group executive Joan Joffe after the announcement. "Six weeks is too long." However, Joffe praised ICASA for its handling of the matter.

MTN spokesman Jacques Sellschop says his company is also disappointed at the delay, but supports the decision.

Both MTN and Vodacom contended at the time of their application that the allocation was needed simply to continue offering voice services, but neither excluded the possibility of using the data capabilities of the narrow but deep spectrum. The higher frequency has a smaller geographical distribution area and is expensive because it requires more base stations than 900MHz, but can carry far larger units of data.

The initial application was opposed by the Internet Service Providers Association, which argued that the data frequency would give the cellular providers an unfair advantage in the provision of data services.

Cell C, the third cellular bidder chosen by ICASA predecessor the SA Telecommunications Regulatory Authority, has said it is willing to share 1800MHz in return for 900MHz and other concessions. Nextcom, the consortium locked in a court battle with communications minister Ivy Matsepe-Casaburri over the awarding of the third cellular licence, has indicated that it wants sole control of 1800MHz should it win the licence.

MTN, Vodacom and Cell C previously reached an agreement to share spectrum should the licence go to Cell C.