Spectrum limitations ‘hold back’ investment in SA

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Cape Town - Limited radio frequency spectrum is a hurdle for investment and cost-effective data services in South Africa, says a local industry expert.

Spectrum is key for telecommunications providers and infrastructure players to offer faster mobile broadband services.

One way to open up more spectrum is by embarking on digital broadcast migration, which frees up frequencies for mobile networks. Bands of 800MHz and 700MHz are then typically referred to as the ‘digital dividend’, which allow for faster mobile broadband services such as LTE.

But South Africa’s digital migration process has been dogged by delays amid debates among broadcasters over television set-top box encryption and controls. Government this year changed its digital broadcast policy to exclude encryption for up to five million subsidised set-top boxes, a move that has sparked court actions by free-to-air broadcaster e.tv.

In the meantime, South Africa also missed the International Telecommunication Union (ITU) digital migration deadline of June this year.

And Deon Geyser, who is the head of the Southern Africa sub-region for network equipment maker Nokia Networks, said that a lack of spectrum could hold back investment in the country and even keep data costs high.

“Of course yes, spectrum limitation holds back investment into the country. That lack of investment in the country is a limiting factor for all of us,” Geyser told Fin24.

“It’s not only limiting for a vendor, it’s also for you as a consumer and every other end-user, because the related investment to then build capacity is a lot bigger,” he said.

Geyser explained that consumers are demanding faster internet services, but with a lack of spectrum this means that networks may have to spend more capital on putting the necessary infrastructure in place.

“And that much bigger investment needs to be recouped somehow,” said Geyser.

“At the end of the day, the operator has to build that and that’s where the spectrum game really becomes a key issue,” he said.

Geyser added that South Africa only has about two million devices that access next-generation LTE networks even though the technology has been available in the country for three years.

The extent of LTE roll-outs are dependent on the amount of spectrum that operators have at hand.

To win over more spectrum, consolidation among telecommunication companies is happening across the world, said Geyser. In South Africa, for example, Vodacom has embarked on a bid to buy fixed-line operator Neotel to secure more spectrum.

But South Africa is not the only country in the world to experience a spectrum crunch, according to Aji Ed who is the head of technology: Middle East and Africa at Nokia Networks.

“The spectrum crunch is not a unique situation for South Africa; it’s really a common problem,” Ed told Fin24.

Countries such as India and Qatar are experiencing similar spectrum challenges, said Ed.

He added that this in turn is spurring the development of spectrum efficient technologies such as Wi-Fi calling.

“All around, the spectrum crunch is a common problem. Very few operators have plenty of spectrum to work with,” said Ed.

*Fin24 is being sponsored by Cisco to attend AfricaCom 2015.

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