Vodacom has a ‘back door’ plan to bring 5G to SA in 2020 – despite government inaction
- Vodacom expects "to be able to launch 5G services in South Africa this year", with its partner promising that it will be "early" in 2020.
- That is no thanks to the South African government, which may be able to talk about the beginning of a probably long-winded process to licence crucial 5G spectrum in April.
- Instead of waiting for that, Vodacom is teaming up with a company that ulimately benefitted from an attempt to break Telkom's monopoly a decade and a half ago.
- Here's how Vodacom found a back door to launch 5G in South Africa.
- For more stories go to www.BusinessInsider.co.za.
There should be a Vodacom-branded 5G service in major South African cities soon, putting SA at the forefront of that buzzy new technology – thanks to a back-door route that bypasses government paralysis.
Vodacom expects "to be able to launch 5G services in South Africa this year," group CEO Shameel Joosub said in a statement accompanying a quarterly trading update, without providing a specific date or saying where the next-generation service will be available.
But Vodacom's partner in that network, Liquid Telecom, was a little more forthcoming in its own statement earlier this month, saying it will have a 5G network "from early 2020 in all major South African cities".
Liquid Telecom, a relatively unknown operator with roots in Zimbabwe, was punting a wholesale network, while Vodacom plans to offer consumer services, but the two companies are talking about the same underlying network, Vodacom's update to investors on Tuesday made clear.
"Liquid will roll out a 5G network which Vodacom will manage on behalf of Liquid," Vodacom said, while it has also "signed a roaming and managed services agreement with Liquid Telecom".
In other words, Vodacom will be selling its customers services on a 5G network which it runs – though that network will technically belong to someone else.
That somewhat strange approach is due to the same government inaction that has left Vodacom's competitors, MTN and Cell C, unable to launch their own 5G networks.
All three operators have been struggling for years with a shortage of radio frequency spectrum necessary for data services, "re-farming" spectrum intended to be used for voice calls to get around government's continued failure to licence more spectrum.
The process to licence ideal, "high demand" spectrum for 5G is now due to begin in April, the Independent Communications Authority of SA (Icasa) said this week – at which point it will "outline in detail the process that will ensue and the likely date for assignment of the high-demand spectrum".
But Liquid Telecom happens to have access to a big chunk of just such spectrum available, thanks to a series of regulatory decisions dating back to the mid-2000s.
Liquid bought what was then called Neotel for R6.55 billion in late 2016 – after Vodacom's attempt to buy Neotel for around R7 billion was fought to a standstill by its competitors earlier that year. Both MTN and Cell C had fought long and hard to prevent Vodacom from landing that deal, in large part to prevent Vodacom from getting its hands on that spectrum.
Neotel had that spectrum it the first place because – before it failed commercially – it was supposed to be a direct competitor to Telkom in fixed lines and fibre-optic connections, with no thought to cellphone services. When it was created as the "second national operator" to break Telkom's monopoly, the company was guaranteed licence conditions at least as good as those of Telkom.
WiMAX never really took hold, but that chunk of spectrum remained in the hands of Neotel, and then Liquid, now to be put to use by Vodacom.
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