Is the communications regulator ready for 5G?

Last week we reviewed the state of 5G readiness in Kenya and promised to do the something similar with respect to the communications regulator.

In interrogating our state of regulatory readiness, we look back at the challenges the regulator faced during the introduction of the 3G and 4G technologies. The key constraint then and now is known as Spectrum.

Spectrum is that range of useful airwaves or frequencies that can be optimally put to use by the existing communication equipment and hand held mobile devices.

For the communication industry to make business sense, the equipment manufacturers must know upfront which frequency bands are going to be reserved for 3G, 4G and 5G technologies.

Fortunately, this is the easier part since it is handled globally by a body known as the International Telecommunication Union (ITU).

Once the 5G frequency bands have been published, each country, through its regulator, must then figure out how to share and allocate the same to current and future mobile telco operators.

There are often two options for allocating scarce frequencies to operators – the auction method and the beauty Contest method.

The auction method invites interested parties to bid for the frequency bands and the highest bidder obviously takes the frequency and enjoys the benefit of being the first to launch in the market during that bidding cycle.

Kenya has tended to favour this approach since it often brings in a lot of revenue for the exchequer – even though it has its downside in terms of higher cost of services as the operator tries to recover their money in the shortest time possible.

Another downside with the auction method is that some well connected brokers, locally known as ‘tenderprenuers’ end up hoarding frequencies with no intention to deploy networks – but instead to resell to third parties.

Several battles, in and outside court ensued between the leading operators as well as between some operators and the Communications Authority of Kenya regarding how the 3G and 4G frequency bands were acquired and distributed.

Considering that 5G frequencies are bound to be even more lucrative, the question remains as to whether the communications regulator is better prepared this time around.

Perhaps they should consider the less contentious beauty contest approach for allocating the 5G frequencies to operators.

In this approach, any interested party simply files an application detailing the technical and financial beauty of how they will contribute to the overall socio-economical development of the country, if they were to get allocated the frequency.

This approach tends to be less contentious since the scarce frequency is not awarded to highest bidder - with the sole intention of making the most money for the exchequer in the shortest time possible.

Instead it is awarded to a select group of providers with the intention of making significant and lasting economic contributions over time.

The frequency acquisition will therefore cost less, but the exchequer will collect more from taxing downstream economic and innovative activities arising from deploying 5G technologies.

Some of the reports that should by now be publicly available to guide investors interesting in bidding for 5G frequencies include 5G Spectrum Plans, 5G Re-farming Plans and Proposed IPv6 Roadmaps.

There could be a lot going on at the regulator in terms of 5G preparations. But until and unless some of these reports get published, we could be setting ourselves up for another round of disputes with respect to 5G frequencies.

Mr Walubengo is a lecturer at Multimedia University of Kenya, Faculty of Computing and IT.

Email: [email protected], Twitter: @Jwalu