Allocation Of Equitable Spectrum Resources – An Entrepreneur Approach ICT White Paper Symposium 31 October 2016

How did we get here? Policy and Regulatory Timeline (2007 – 2011) ICT White Paper How did we get here? Policy and Regulatory Timeline (2007 – 2011) 14 Dec 2011 Draft Policy Direction - High Demand Spectrum POLICY 16 April 2010 Spectrum Policy 13 July 2010 Broadband Policy 17 Sept 2007 Policy Directions 2008 - Smile SA spectrum Application During this period Smile obtained spectrum licences in Uganda, Tanzania, DRC and Nigeria REGULATION Nov 2006 2007 June 2008 July 2009 May 2010 July 2010 Sept 2010 Mar 2011 ICASA Requests comments on Procedures for 3.5 GHz/2.6 GHz No activity Reasons Document Draft Procedures Regs Final Procedures Regs ITA Withdrawn (ICASA) Draft Radio Frequency Spectrum Regs and Explanatory Memo ICASA Final Radio Frequency Spectrum Regs and Explanatpry Memo Licensing Framework Reasons ITA 2600 MHz and 3500 MHz Smile applied for spectrum in 800 MHz and 2.6 GHz in 2008 when it was NOT in high demand; the High Demand Spectrum Policy Direction (draft) was only published in 2011

In 2016 launched Voice over LTE ICT White Paper How did we get here Policy and Regulatory Timeline (2012 – present) POLICY Dec 2013 SA Connect – Broadband Policy Feb 2014 Green Paper Nov 2014 ICT Policy Discussion Paper Mar 2015 ICT Policy Review Final Report Sept 2016 ICT White Paper During this period Smile was able to test technologies and then rolled out commercial and National 4GLTE Infrastructure in Uganda, Tanzania and Nigeria. In 2016 launched Voice over LTE REGULATION Dec 2011 Mar 2012 Aug 2014 Nov 2014 Dec 2014 Mar 2015 Sept 2015 July 2016 Draft ITA and Spectrum Plan - 2600 MHz and 800 MHz ICASA Licensing process on hold Draft IMT Roadmap 14 November Final IMT Roadmap Draft Spectrum Regs Final Spectrum Regs Info Memo IMT Spectrum ITA 28 November Draft Radio Spectrum Plan Regulatory activity in 2012 and 2014. The ICT policy process was underway from 2014 – 2016 and culminated in the ICT White Paper

ICT White Paper Key Issues - Where do we go from here? Long awaited White Paper changes the status quo . Represents a fundamental shift and change in approach to promote the use of spectrum as a public good for the purposes of social and economic development Policy is clear about need to change market structure and involve players beyond ‘the usual suspects’ (but not clear on how to include other players with experience and good track records) Policy is silent on the impact of the WOAN on the transformation of the ICT sector - BEE ownership and control, woman ownership and control Not clear about the critical role of new entrants and entrepreneurs in the WOAN – and in the sector as a whole Needs to be clear on the role of the various elements in the broadband value chain to support the WOAN Policy Directives need to be issued. Monitoring and enforcement need to be strengthened in order to create a clearer link between the initiatives proposed and the outcomes South Africa has fallen behind in broadband development due to 8 years of delays in licensing spectrum – now is the time!

Prevent Delays Issue Policy Directives Policy Directives should be issued to the regulator to ensure policy implementation is clear and swift Delays of the past decade cannot be repeated! Ensure that directives are clear with timeframes and identification of responsible implementing parties

Policy Directives Broadband Value Chain Spectrum Towers Backhaul International National Metro Data Centre Policy Directives Broadband Value Chain Competition on services (marketing, sales distribution) and on the areas of the broadband value chain where there in not sufficient competition Opportunities for All Competition No policy Directive Insufficient competition – Policy Directive

Policy Directives Spectrum – Wireless Open Access Network Spectrum included in WOAN Spectrum currently not licensed All unlicensed IMT spectrum should be put into the WOAN pool of spectrum immediately and licensed within the next 6 months 450 MHz 700 MHz 800 MHz Any other available IMT spectrum that has not been licensed Spectrum currently licensed Investor confidence should be retained Spectrum license term should be linked to the ECNS license term as long as the holder of the license is complaint with all obligations If there is non compliance at the time of renewal, then spectrum should not be renewed and should be put in WOAN pool of spectrum WOAN spectrum should include 450 MHz, 700 MHz, 800 MHz and any other IMT spectrum that has current not been licensed and WOAN should be formed within 6 months

Policy Directives Spectrum – Wireless Open Access Network All open access principles in the White Paper should apply to the WOAN – i.e. cost basis, transparency, non-discrimination… Spectrum is a public commodity and therefore government must take control of how it is managed and who owns it Wireless Open Access Network (WOAN) consortium should be primarily majority black owned (51% or more) and at least 50% woman owned WOAN should be led by experienced third party comprising of black people and women Wireless Open Access Network should be majority black owned (51% or more) and at least 50% woman owned

Policy Directives Active and Passive Infrastructure Sharing All open access principles in the White Paper should apply, passive and active infrastructure sharing should be encouraged, as per White paper, at a cost basis Passive Infrastructure (Towers) All towers that have been deployed should be consolidated into a single vehicle, managed by a third party with experience (Nigeria and USA example). An RFP should be issued to select the third party Towerco, for transparency The Towerco must be majority BEE owned and led Active infrastructure (RAN) sharing should be encouraged as per White paper on an open access and cost based model Consolidate towers and establish a majority BEE led TowerCo managed by an third party

Policy Directives National and Metro Fibre All open access principles as set out in White Paper should apply to fibre Use Telkom infrastructure as per White Paper given its dominance in the national and metro markets, however several other companies are also key players – especially in urban areas All fibre should be consolidated under a single company, managed by a third party (Fibre Open Access Network) National and metro fibre infrastructure that exists should be pooled together into a single company including Telkom and other Fibre companies Access should be provided on a cost basis Consortium should be formed based on those who have included infrastructure, and other interested parties RFP should be issued to select the third party manager of the Fibre Open Access Network All new fibre should be laid by the consortium Consolidate towers and establish a majority BEE led TowerCo managed by an third party

Conclusion Policy Directives to be issued on Spectrum (WOAN) – 450MHz, 700MHz and 800 MHz immediately Active and Passive Infrastructure National an Metro Fibre Spectrum is a public commodity, so more intervention required - WOAN should be privately led and entrepreneur driven – but only ‘qualified new entrants’ who have a proven track record and experience The broadband value chain needs to support the WOAN. It has to be created in a way that incumbents cannot prevent its success through their action, or inaction: Wireless open access national network takes into account the various inputs needed for it to succeed Where existing operators’ towers or other infrastructure are needed for the network to be successful, and to meet national goals, this should be enforced, and the ownership should be biased towards transformation.