The COVID-19 pandemic has “exposed” the degree of SA’s readiness for the fourth industrial revolution, testing telecoms infrastructure’s resilience in supporting the accelerated journey into the digital era.
This is according to analysts, who say due to the impact of the pandemic, the spectrum discussion has now shifted from important to critical, and the regulator must urgently license new spectrum, as mobile network quality would deteriorate significantly without access to additional capacity.
Speaking to ITWeb, analysts say the regulator must urgently issue new licences.
The call by analysts comes on the back of growing demands by telcos for the regulator to release spectrum, which has been necessitated by the increase in data usage as a result of the COVID-19 lockdown.
During the first half of the year, most South African telcos scored significant financial successes, driven by high data usage as most people and businesses shifted online.
In the period, Telkom Mobile’s data traffic went up 81%, which the company attributed to the increase in people working from home and online schooling due to the COVID-19-induced national lockdown.
Vodacom reported blowout half-year results, ended 30 September, buoyed by massive double-digit data usage growth. Data traffic was up 86% year-on-year for the period, with Vodacom saying its data customers grew 4.1% to 22.3 million and smart devices were up by 9.5% to 22.2 million.
Similarly, MTN’s data revenue grew by 31.9%, bolstered by increased demand for work from home services, digital entertainment as well as online education offerings.
These financial successes have now bolstered the need for more spectrum, which in turn may also lead to price reductions.
However, there are concerns that the regulator, the Independent Communications Authority of South Africa (ICASA), may again miss the new deadlines to auction spectrum, hence the analysts have elevated the need for new licences to critical.
ICASA recently set the ball rolling for the spectrum auction, announcing the invitation to apply for the licensing of International Mobile Telecommunications spectrum, also known as high-demand spectrum, and that of the wholesale open access network.
In September, the telecoms regulator moved the auctioning of the much-needed spectrum to the end of March next year, instead of December as earlier indicated.
As a result, emergency spectrum issued to telcos in April, due to the national COVID-19 lockdown, was extended to the end of March next year, when the spectrum auction process is expected to take place.
The mobile operators have so far used the emergency spectrum to rollout next-generation 5G networks in some parts of SA.
Critical shift
Africa Analysis telecoms analyst Dobek Pater says telecoms infrastructure will become even more important in terms of quality and capacity to service the faster growth of traffic generated through greater use of digital technologies.
“It also needs to improve to provide better quality services in more remote areas – broadband connectivity. The telecoms access environment may see greater diversification or growth of ‘niche’ technologies suitable to service diverse user environments; for example, satellite, TV white spaces, other fixed wireless access technologies.
“Due to the investment required, we are likely to see greater emergence of open access networks/shared infrastructure. This is likely to be also driven by physical limitations in resources; for example, shared spectrum (dynamically shared spectrum) to drive spectrum usage efficiencies.”
“It is clear that some of the boost to mobile traffic and revenue will be maintained going forward as trends such as work-from-home, digital meetings, online learning and improved e-commerce penetration are here to stay,” says Peter Takaendesa, head of equities at Mergence Investment Managers.
“This now makes it a must for the regulator to license new spectrum or extend the temporary access granted during lockdowns as mobile networks’ quality would deteriorate significantly without access to additional spectrum.”
However, he says: “We expect mobile data traffic growth to normalise as some of the traffic shifts back to fixed-lines, driven by more people returning to offices and the accelerated fibre rollouts over the past few months.
“Operators with strong balance sheets are now likely more receptive to further network investment growth, given improved revenue trends and the need to maintain quality of service to customers.”
Industry expert Spiwe Chireka points out that going forward, the impact of COVID-19 has to be factored in when reviewing telecoms policy and investments.
“First of all it has ‘exposed’ the degree of readiness of the region for Industry 4.0 and the digital revolution. How? On the one part, it has tested how resilient our telecoms infrastructure is in supporting this move, and on the other hand, accelerated our journey into the digital era. As a result, the telcos, on the most part, have stepped up to meet the growing demand, as how we work and live changes and consequently impacts our connectivity requirements.
“This has and will continue to see immediate priorities change to upping capacity and accelerating timelines for 5G, which presents a viable option for telcos to achieve this without breaking the bank. Of course, the spectrum discussion has now shifted from important to critical.”
Share