Withholding spectrum has hurt poor people the most - Free Market Foundation

The conversation around spectrum and its future in South Africa is an ongoing one. Recently, the communications regulator ICASA extended the temporary allocation of emergency spectrum under South Africa’s disaster management regulations by two months. This comes as the country's first-ever auctions, which were expected to take place this month, were delayed by ongoing court actions. The Free Market Foundation has released a paper on radio spectrum policy serving consumers. In a recent interview with CNBC Africa, Leon Louw, the Founder and President of the Free Market Foundation, discussed the impact of withholding spectrum over the years. Louw highlighted the detrimental effects of the government's control and limited allocation of spectrum on the telecommunications industry and, most importantly, on low-income and rural communities. The core argument presented in the report is that the government's actions have disproportionately harmed the poor, denying them access to cheaper and more efficient telecommunications services. Louw emphasized that the restriction of spectrum availability has led to high costs for consumers, especially those in rural areas, and resulted in inferior service quality. Despite these challenges, Louw commended the achievements of mobile network operators (MNOs) like MTN and Vodacom for revolutionizing the telecommunications landscape in South Africa. He noted that these companies have managed to provide extensive coverage and innovative services against all odds. However, Louw stressed that the government's withholding of spectrum has hindered further progress and hindered the ability of companies to expand services to underserved communities. The significant implication of the lack of spectrum allocation is the stifling of competition and innovation in the market. The government's decision to limit spectrum availability to a few operators has led to suboptimal service delivery and higher costs for consumers. To address these challenges, Louw advocated for the release of additional spectrum through auctions. He emphasized the importance of ensuring that the auction process is fair and transparent to enable more players to enter the market and drive competition. Louw recommended that the auction should involve large chunks of spectrum to make it economically viable for operators. Furthermore, he highlighted the importance of allowing tradability of spectrum post-auction to promote efficiency and encourage collaboration among operators. The key theme that emerged from the interview was the critical role of spectrum allocation in promoting affordable and accessible connectivity for all South Africans. Louw underlined the urgency of releasing spectrum to bridge the digital divide and enhance telecommunications services in the country. Through the unlocking of spectrum, the potential exists to stimulate further innovation, improve service quality, and lower costs for consumers. In conclusion, Louw's insights underscored the imperative for policymakers to prioritize spectrum allocation as a means of fostering a vibrant and competitive telecommunications sector that benefits all citizens.