Press release: ISPA Welcomes New Spectrum Licence Fees Regulations

Published on: 2012-03-29

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The Internet Service Providers’ Association (ISPA) has welcomed the implementation of the new regulatory framework governing the licence fees for radio frequency spectrum, set to come into force on 1 April 2012.

“ISPA wishes to congratulate ICASA on the implementation of the new framework for spectrum licence fees,” says Dominic Cull, ISPA’s regulatory advisor. “The new regulations are designed to provide an economic incentive to encourage licence-holders to use spectrum efficiently and will dramatically lower the costs of frequency for point-to-point links, particularly in rural areas.”

The new pricing model moves away from a fixed price of R770 per MHz per link per annum to one that takes into account different uses of spectrum and the need to ensure that licensees occupy appropriate spectrum for these uses.

For example: spectrum below 3GHz is regarded as being the most suitable for the provision of wireless access services – using this spectrum for backhaul links prevents it from being used for access services at a cost to the South African economy. The licence fees for a point-to-point (PtP) link in bands below 3GHz are therefore higher than for those in ranges such as 8 and 23GHz.

Similarly, licence fees payable for spectrum usage outside of Gauteng, Cape Town and EThekwini Metro will cost one-tenth of spectrum usage within those areas, incentivising rural network roll-out.

“The annual licence fees payable for a PtP link will fall from tens of thousands of Rands to, in some cases, hundreds of Rands per annum. An example is an existing link in the 23GHz band between two rural educational facilities which cost R43 000 in licence fees in 2011/2012 – the licence fee for 2012/2013 will be R560.”

Access to communications is one component in bridging the digital divide while the other is making that access affordable. These regulations will play a role in both respects.

“By rewarding those licence holders who use spectrum efficiently, the new regulations will help to ensure better service for consumers. And by lowering the price of connectivity, they are helping to increase competition and introduce more and more South Africans to affordable broadband services,” Cull notes.

Connectivity, particularly broadband connectivity, forms a keystone of the government’s drive to create more jobs and stimulate the economy, particularly in the small to medium-sized enterprise sector.

The Department of Communications and the ICT industry signed a contract to ensure 100% broadband penetration by 2020.

“While some implementation issues remain, ISPA believes that these regulations are one of the most constructive regulatory interventions that ICASA has made to date,” Cull concludes.

Further Information

For further information, please contact the ISPA secretariat on the Contact ISPA page.