Category Archives: Spectrum

Spectrum and Development

The following is a chapter I submitted to an upcoming collection of essays on Television White Spaces spectrum being put together by the Wireless Laboratory of the International Centre for Theoretical Physics (ICTP).

In the field that has come to be known as Information and Communication Technologies for Development or ICT4D, the management and regulation of electromagnetic or wireless spectrum has evaded most donor programmes and debates. Broadly speaking ICT4D is a field that looks at the impact of information and communication technologies (ICTs) on development and explores how equity, rights, and social and economic development can be positively affected by access to ICTs. ICT4D embraces both policy and technology in a quest to create equitable access for all. In this article, I will make the case that the absence of debate or action on the regulation and management of wireless spectrum now stands as a gap in development thinking about ICTs.

Why Worry About Spectrum?

Why should wireless spectrum be given special consideration? For much of the developing world, wired technologies, especially in rural areas, are simply not practical. In the industrialised world, wired technologies feature heavily in the last mile for high-speed data whether via an ADSL-enabled copper telephone line or via a the co-axial copper cable provided by a cable television operators. However copper-based last mile solutions present particular challenges in poor countries. The roll-out cost of copper infrastructure is comparatively high, and often not practical in lower-income countries, even less so in sparsely populated rural areas. The steadily increasing value of copper as a commodity also makes it a target for thieves. Fibre optic cable infrastructure is another important connectivity technology especially for national and international communication backbones but it is currently only viable as a last-mile solution in wealthy communities. Satellite-based infrastructure is also a powerful technology for delivering access in remote areas but it too is currently not cost-effective as a last mile technology.

This means that when talking about affordable, ubiquitous access to communication in developing countries, wireless technologies offer the most hope for effectively bridging the digital divide. And indeed, the mobile phone has become more or less synonymous with access in the South.

Much has changed since mobile networks began rolling out in the early-to-mid nineties in the South. When the first mobile operators were granted licenses to use wireless spectrum to build their networks, they were simply given the spectrum at no charge. There was plenty of available spectrum to go around. Today popular spectrum bands are auctioned for large amounts of money, often running into the billions of dollars.

Because so much money is now at stake concerning spectrum, the process of making new spectrum available has become complex. It is increasingly hard to ensure that spectrum is made available in a timely manner and to the entities that are most likely to serve a country’s strategic interest.

As ICTs become increasingly valuable to government, industries, and citizens alike, demand for spectrum has steadily increased. Yet the process of making spectrum available and managing it as a resource still fails to feature in ICT4D initiatives and strategies.

So Why Don’t We Talk About Spectrum?

One possible answer to why spectrum doesn’t feature significantly in ICT4D lies in its multi-dimensional complexity. It’s a daunting issue to address, requiring technical, economic, and legal expertise. Here are just a few of the ways in which spectrum is a challenge to understand and manage.

Technical complexity. What we understand about wireless spectrum is flux. Eighty years ago the only way to manage spectrum was to give exclusive rights to a spectrum holder and ensure that significant “guard bands” or gaps between spectrum holders existed in order to prevent interference. Transmitters were obliged to operate at comparatively high power outputs in order to reach the comparatively “deaf” receiver devices. Today wireless communication technology continues to increase in efficiency and in its ability to mitigate interference. There are limits to this, however, and understanding how to maximise the efficient use of spectrum is an ongoing technical challenge which attracts a lot of R&D investment. Understanding the trends and changes in spectrum technology is essential to understanding how to regulate it.

Money and Corruption. As the business of telecommunications has become more lucrative, an increasing premium has been put on access to spectrum. As a result, regulators find themselves managing a resource worth millions of dollars to interested parties. Where that much money is on the table, ensuring fair play in the national strategic interest can be a challenge. Spectrum auctions have emerged as the de facto mechanism for dealing with licensed spectrum yet effective auction design and execution is a challenge even in well-resourced regulatory environments. Success in this area doesn’t just involve designing an optimal auction but also creating a sufficiently well-organised and disciplined process that doesn’t attract legal challenges from disgruntled parties.

Market and Manufacturing Complexity. Spectrum usage is dependent on having technology capable of using a given set of frequencies and this, in turn is entirely dependent on manufacturers producing transmitters and receivers for those frequencies. Many technologies only become practical when manufactured at scale so there is a kind of catch-22 with new technologies that requires commitment from manufacturers to support specific standards and frequencies. In the past, the trend in spectrum allocation has been to tie a particular spectrum band to a particular technology. This has led to chunks of spectrum lying fallow because the markets and manufacturers did not follow the path that regulators expected. Today, there is an increasing emphasis on technological neutrality in spectrum allocation but this can be challenging because some technologies, for example those that require paired spectrum, are dependent on spectrum allocations being organised in a particular manner.

The Challenge of Coordination. Prior to the advent of mobile telephony and wireless broadband technologies, the availability of spectrum exceeded demand and incentives to coordinate spectrum allocation existed but were often trumped by local or regional priorities. So while there is broad coordination in general areas of spectrum use, there are critical variances in the details. This has led to the need for mobile phones that operate in three, four, or more spectrum bands in order provide a working service internationally. Regulators today find themselves in a catch-22 situation where they recognise the need to harmonise spectrum but are tempted to act individually because the pace of international coordination is so slow.

Institutional Capacity. When it comes to effective regulation of spectrum, there is a clear need for the technical, economic, legal, and administrative capacity within every country to address the above issues effectively. For developing countries, this is often the most significant challenge as communication regulators are typically under-resourced and sometimes insufficiently independent of state and industry alike. Because so much money is on the table, regulators are often outmatched by their wealthy industry counterparts.

Where Do Things Stand?

In poor countries, regulators and governments are caught between the growing market demand for more spectrum and the need for more human and financial resources to manage the increasingly complex web of issues including spectrum auctions, technological advances, regional harmonisation, not to mention vested interests.

This is compounded by the fact that decisions about spectrum can have consequences that can last a generation or more. The interplay of investment, evolving technical standards, and administrative complexity tends to make this a very slow-moving decision-making environment. This means that not only does it take a long time to introduce new spectrum regulation but also that strategic errors in regulation can take many years to undo.

South Africa is a good example of how challenging it can be to carry out a spectrum regulation change. In May of 2010, the South African communication regulator, ICASA, announced an auction of spectrum in the 2.6GHz and 3.5GHz bands. The auction was plagued with problems. Insufficient attention was given prior to the auction to the need to migrate incumbents within the 2.6GHz band in order preserve technological neutrality. Build-out requirements for the spectrum licenses were claimed to be unrealistic by some major players as well as other factors that were critiqued. For nearly two years the regulator went through an on-again, off-again process with the auction. Ultimately the auction was withdrawn and three years later the spectrum remains unavailable. Worse, trust in the regulator’s capacity to successfully carry out a spectrum auction has been undermined.

Unlicensed versus Licensed Spectrum

Standing in stark contrast to the traditional method of assigning spectrum through exclusive-use licenses is the world of unlicensed spectrum. Unlicensed spectrum is regulated but instead of being managed through a licensing process, it is regulated through the technical specifications imposed on devices operating in spectrum designated as unlicensed. Typically this means that the power output of these devices is required to be lower than is found in licensed environments. The lower power output limits the ability of any device to interfere with another and any device operating in these bands must be tolerant of interference.

Originally conceived for non-communication-related use of radio spectrum, the Industrial, Scientific, and Medical (ISM) bands have come to be dominated by popular communication technologies such as WiFi, Bluetooth, and Near Field Communication. The success of these technologies, WiFi in particular, is something to consider in the context of spectrum management strategies. The ultimate use of the ISM bands was not predetermined. WiFi emerged as a success story more through a process of natural selection than by design. Its success has eclipsed all expectations.

According to market research firm IHS, in excess of 2.14 billion WiFi chipsets will ship in 2013 – 20% more than in 2012. WiFi technology is emerging as a critical part of mobile broadband infrastructure. According to a survey of Android devices by mobile analytics vendor Mobidia, WiFi predominates as the access technology for smartphone and tablet data. This research is corroborated by reports from Nielsen that WiFi also dominates smartphone data in the UK with only 22% of data traffic travelling via mobile networks.

It is interesting to note that this dominance has evolved without the intervention or design of mobile operators. The success and importance of WiFi to broadband strategies has begun to receive some attention in the industrialised world but receives almost no attention in debates on bridging the “digital divide”. A recent ITU / Unesco report entitled The State of Broadband 2012: Achieving Digital Inclusion for All mentioned WiFi only twice.

As a broadband connectivity success story, unlicensed spectrum is under-represented. We rely on WiFi connectivity everywhere we go yet it is seldom mentioned in a strategic context, perhaps because its growth has occurred so organically.

TV White Spaces Spectrum – a new frontier

While the existing unlicensed spectrum technologies have gone from strength to strength, a new opportunity for unlicensed spectrum use has emerged in the form of TV White Spaces spectrum. Originally conceived of as a technology that could take advantage of the guard bands or “white spaces” that were left between television channels to prevent interference, TV White Spaces (TVWS) spectrum is a secondary spectrum technology that can take advantage of unused television spectrum in a dynamic manner. In the US and the UK, communication regulators have endorsed TVWS regulation and the commercial scale-up of TVWS technology has begun.

What Promise Does TV White Spaces Technology Hold for the Developing World?

There are four key reasons why TVWS technology holds tremendous promise for the developing world:

Low Risk Regulation. Because TVWS is a secondary-spectrum-use technology, there is no need to re-allocate spectrum in order to regulate its use. It doesn’t commit the regulator to giving away a spectrum band for years to come and doesn’t expose the government to the challenges of spectrum auctions which range from stalled processes (as we have seen in South Africa) to widespread corruption (as we have seen in India). Whether TVWS succeeds in its potential to spur the same innovation and market development that has happened in WiFi is a risk for the market not for the regulator.

Availability of Television Spectrum. The profusion of terrestrial broadcast channels in use in North America and Europe may limit the impact of TVWS applications in these regions. However, a region like Sub-Saharan Africa (SSA) is very different. Most countries in SSA have few terrestrial broadcast channels in use, leaving large amounts of television spectrum available for use. This is even more true in rural areas where TVWS show their greatest potential. The flexible nature of TVWS technology means that more spectrum can be taken advantage of in the least serviced areas. Of course this doesn’t preclude using television spectrum for other purposes too such as digital terrestrial TV and mobile broadband.

A Great Rural Technology. While mobile technology has been an access boon for the developing world, mobile operators still struggle to deploy access in rural areas where low incomes and sparse populations do not make a viable economic proposition for the establishment and maintenance of mobile base stations. TVWS has specific advantages that make it well-suited to being a complementary access technology. First, TVWS use of the UHF spectrum band offers better propagation characteristics than other technologies higher up in the spectrum band. This means that individual base stations can reach further, thereby lowering the total number of base stations required for a given areas. Second, UHF spectrum doesn’t require direct line-of-sight between radios. This will also lower the cost of deployment thereby reducing the need for high towers and more complex network design. Finally, the market cost of TVWS devices will be closer to that of WiFi equipment than traditional wireless broadband equipment used by licensed spectrum operators.

Opportunity for Entrepreneurship. Perhaps the least acknowledged benefit of TVWS regulation is the opportunity that it will offer to entrepreneurs. Rising demand for licensed spectrum has raised the bar for market entry so high that none but the wealthiest of investors can get involved. The high cost of entry also raises the risks of market entry. By contrast, TVWS technology will open up rural broadband service delivery to an entire generation of entrepreneurs interested in providing local, competitive broadband services. If TVWS technology lives up to its promise, it will not only provide opportunities to small entrepreneurs but perhaps will also provide the foothold they require to nip at the heels of and ultimately challenge the market hold of incumbent operators.

What Google Should Do In Africa - Launch a Digital Television Station

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This entry is part 1 of 1 in the series What Google Should Do in Africa - Part 2

AfricaFlix Inspired by the recent successful launch of the Television White Spaces pilot in South Africa, I am once again tempted to engage in providing mostly unsolicited advice about what Google’s strategy in Africa ought to be. What I want to propose today is the launching of a Netflix-like streaming television service aimed at African markets and serving African and international content. In this I take a more radical point of view than I did in my recent post about the Digital Dividend. This idea is borne of two recent experiences, one, some work I did recently looking at the migration process from analogue to digital broadcasting in Africa; and, two, my personal experience with Netflix.

Digital Migration

Most of the industrialised world has made a transition from analogue to digital broadcasting of terrestrial television. The process in most African countries is much slower. Because digital broadcasting requires a fraction of the spectrum needed for analogue broadcasting, a transition to digital television broadcasting:

creates space for more television channels;
allows the possibility of broadcasting in High Definition (HD);
makes some spectrum available for other purposes such as broadband; and,
allows broadcasters to keep pace with changes in broadcast technology.

Of the above benefits, I question whether a. and b. are relevant in Africa. There has always been plenty of space for television channels. The majority of African countries have four or fewer terrestrial broadcast channels. As for High Definition broadcasting, it is hard to make either the social or economic case for HD broadcasting. You could make the argument about Africa not being left behind or given second class technology but frankly I have trouble seeing the real market demand for HD television in the industrialised world, perhaps for sports broadcasting. HD television feels like the upgrade that manufacturers tell you you want. Which of course doesn’t rule out HD television via other means such as satellite. So the real benefit of the switch-over to digital terrestrial broadcasting is the spectrum that is freed up for other purposes such as mobile broadband or TV White Spaces technology, etc. And if that’s true, then does there really need to be a switch-over to digital broadcasting at all?

Across the continent, the switchover process is not going very well at all. Very few countries seem to have come up with an effective strategy of how to manage the switch-over let alone finance it. Few countries have an effective strategy of even how provide everyone with the Set Top Boxes (STBs) that are required to view digital broadcasts if you don’t happen to have a shiny new digital television set. In South Africa, unspent funds from the Universal Service Agency are being re-purposed for the purchase of STBs for the masses. The bottom line is that the economics of the transition to digital broadcasting simply don’t make sense. It is an extremely expensive process for an, as yet, undetermined benefit. Digital broadcasting is being treated as a giant “build it and they will come” project that will hopefully create both supply and demand at the same time. And if you don’t buy that, there is always the argument that one must embrace the digital switch-over because it is inevitable.

Most African countries signed an agreement in 2006 that they would commit to the digital switch-over. The general sense is that you simply have to get on board because analogue broadcasting will soon be obsolete. It reminds me a bit of the furore a few years ago about the need to move to IPv6 because all the IPv4 addresses were about to run out. Strangely the sun has yet to set on the IPv4 address space.

So what if there were another option, an option that didn’t exist or seem credible in the near future in 2006 when the switch-over policy decision was taken? I am referring to Over The Top (OTT) broadcasting or the delivery of what was traditionally broadcast content over the Internet.

The Success of Netflix

Netflix is the most successful example of OTT service delivery. As of the end of 2012, they claim over 33 million subscribers worldwide, most in the United States. Not too long after moving to Canada from South Africa last year, I signed our family up for Netflix. I was unprepared for how cheap and how efficient their service is. $7.99 per month for all-you-can-eat television is pretty good, by any standard. In fact, $7.99 looks roughly like mobile ARPU in Africa. People complain about the choice and how up-to-date their offering is but for our family it is the right blend of price and service. What was even more impressive is how well it works. We have a single 6Mb/s dry-DSL link that provides all of our household communication including VoIP phone service and Internet. I was pleasantly surprised to discover that my kids watching Netflix did not affect the quality of my VoIP phone calls.

Last month, I attended an event at which Netflix’s Director of Cloud Infrastructure, Adrian Cockcroft, spoke. He further impressed me with just how far and how fast Netflix has come. One of the first things he said was that Netflix expects to become the largest Content Distribution Network (CDN) in the world some time this year. That may or may not turn out to be true but just the fact that he thinks it likely is saying something given the likes of Akamai, Level 3 and others. If you know anything about the distribution of video and other big media on the Internet, you know that it is dependent on CDNs which are gigantic local caches of content. So when you request that YouTube video in Cape Town, it appears to stream internationally at high speed but actually you’re just getting a local copy from Google’s Global Cache CDN in South Africa. This makes for much more efficient use of the main arteries of the Internet although how CDNs should be implemented and by who is a subject of much debate. Netflix have built their infrastructure entirely on Amazon’s cloud infrastructure which makes them a completely virtual organisation. It impressive just how flexible and efficient at content delivery Netflix are. No doubt the competition is not far behind them but just to say that remarkable things have been achieved in the last 6 years in both video compression and content distribution.

An Opportunity for Google?

So, a bold move for an African country would be to scrap the digital switch-over entirely and invest all that money planned for a digital broadcast network into broadband fibre and wireless infrastructure to support OTT service provision. Bold but inconceivable. I think we all know that that is never going to happen. The digital switch-over ship has sailed and there is too much money already committed to it. It is officially too big to fail. However, that wouldn’t stop a smart company from doing the right thing.

Google already operates its own CDN network in Africa. There are Google Global Caches in South Africa and Kenya and doubtless other countries on the continent. It is well-positioned to manage the delivery of content on the continent. Arguably, as a company, Google understands African media markets better than most international Internet companies having invested significantly over the last 4-5 years in local offices and local talent in Africa.

An African digital television service could be a low-barrier opportunity for new content-makers and a great way to promote thriving national industries like Nollywood to the rest of the continent. It would be an opportunity to innovate service delivery perhaps creating new super-low-bandwidth options or perhaps overnight updates or local WiFi-based mini-caches of television content.

Are Google the best company to do this? They certainly have all it takes although it doesn’t mean that someone else might not do it faster and better. The three takeaway points I want to leave you with are these:

The switch-over to digital broadcasting in Africa is a slow-moving train wreck.
OTT television services are growing faster and more efficiently than you might have imagined.
The combination of 1 and 2 could mean a different television future for Africa.

Unpacking Our Mobile Broadband Future ITU Y U NO LIKE WIFI?

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The future is mobile. We all know that. We read it everywhere. In the UN Broadband Commission‘s recently published report entitled, The State of Broadband 2012: Achieving Digital Inclusion For All, ITU analysts boldly announce their belief that:

“mobile broadband could prove the platform for achieving the boost needed to get progress back on track – at end 2011, there were already almost twice as many mobile broadband subscriptions as fixed broadband connections.”

But what does it actually mean and is it really true? When talking about our mobile broadband future, it is essential to distinguish between devices and networks. The two things are not necessarily the same thing.

The Future is Mobile Devices

This future I believe in. Small, low-power wireless devices whether phones or tablets are taking over the way we interact with each other and with content. New markets and services are being created every day for mobile devices. The world of app and apps stores are creating new opportunities for innovation and adding value.

The Future is Mobile Networks

This is the future mobile operators would like you to believe in but the evidence is increasingly not in their favour. Here are some statistics that may change your perspective of our mobile broadband future.

Global Smartphone-originated Data Traffic
January 2012 – Source: Mobidia

A recent study by Mobidia revealed that about 70% of smartphone data traffic travelled via WiFi and not mobile networks. Keep in mind that this research was not done in Africa, it was done in the industrialised world. What we are seeing overwhelmingly is WiFi become the default form of data access and cellular access being relegated to those times when WiFi is not available, an increasingly rare phenomenon in the rich world.

The figures are even higher for tablet traffic. And while we’re at it, since when are tablets “mobile” devices? Of the fifty million tablets sold in the United States, only 8% have mobile capacity. The tablet is not a mobile device, it is a WiFi device. Google’s Nexus7 tablet is WiFi-only. Both Microsoft’s new Surface tablet and Apple’s new iPad Mini are likely to launch as WiFi-only devices. Why would Apple and Microsoft do that? Well, one reason might be to avoid the painful process of negotiating mobile carrier agreements. Imagine if computer manufacturers had to negotiate ISP agreements to connect a computer to the net. The latest tablet is also a whole lot cheaper than a smartphone. Compare a $200 Nexus7 tablet with an $800 Samsung Galaxy S III smartphone.

So what’s my point here? My point is that the UN Broadband Commission’s recently published report on Achieving Digital Inclusion mentions WiFi exactly twice, both times parenthetically. Mobile operators would like you to believe that the future of mobile broadband lies in the LTE networks that they are building. And certainly that is partly true but only partly. If the Mobidia stats are to be believed, about 30% true.

Mobile operators have no interest in WiFi because they currently have no control over WiFi networks although that is beginning to change in the U.S. And we get reports like the one from the UN Broadband Commission because the dialogue at the ITU is dominated by operators. The Broadband Commission itself is chaired by Carlos Slim, the richest man in the world. The irony of putting the richest man in the world in charge of a commission to connect the poor appears to be lost on the UN.

In any discussion about the mobile broadband future of Africa, WiFi is simply not part of the discussion. Yet the evidence is before our eyes of the strategic importance of WiFi to our “mobile” devices. It’s cheap and fast and grew to solve the problem of affordable access by chance not by design. It happened because WiFi is an open space for technology developers to innovate. No carrier agreements required.

Also not mentioned in the UN Broadband Commission’s report is the potential of Television White Spaces spectrum, a space for with the potential for massive innovation in rural access. Another area not controlled by mobile operators.

The benefits of WiFi go beyond just cheaper access. They also create the opportunity to eliminate the weakness of a single point of failure that mobile networks create. WiFi infrastructure can make it harder to wilfully shutdown communication in a given geographic region. The key to resilient networks is plurality of access and WiFi is already embedded in every smart device you can think of.

It would be nice to see WiFi recognised for the powerful role that it is already playing in mobile broadband and to see it figure in national strategic broadband plans for the future.

Three reasons why M4D may be bad for Development

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Fair warning, this post is a slightly intemperate and possibly ill-advised rant but sometimes you just have to get something off your chest if only to enable someone else to tell you how wrong you are. I have previously raised my “issue” with the theme of Mobiles for Development or M4D as it has come to be known, in the form of a twisted parable but it is still bugging me so I am going to say what’s on my mind a little more clearly. I hope to inspire some pushback and discussion. Here are three reasons why I think M4D may actually be bad for development.

1) Repeating the Lessons of History

Do you remember ICTs for Development in 1999? ICT4D in 1999 looked a lot like an Alexander McCall Smith novel in that there was a complete absence of cell phones. In 1999, we were still talking about modems and getting a good quality dial-up connection and even telecentres. I only woke up to the impact that mobile phones were having in about 2002 and then finally it became an official reality when, in March of 2005, the Economist announced that mobile phones were the real bridge to the digital divide. And how right they were. I don’t think even then they would have predicted how cheap and how powerful mobile phones would become.

However, it is worth trying to put technology in context. Let’s look at a little recent history. From an ICTs and development perspective, here are some things we didn’t talk about in:

Year	Not in the conversation
2001	Mobile phones
2003	WiFi Hotspots
2005	Mobile Broadband
2007	LTE
2009	Tablet computing
2011	TV White Spaces technology

Now of course some of you are thinking right now, hey, I was talking about technology Y in 20XX, and perhaps you were, but what I am referring to is the dominant dialogue in technology and development. As William Gibson famously said, “the future is already here, it is just unevenly distributed.”

So what can we learn from this? Just this, that the future is going to be a surprise and tying the notion of development to a particular mode of technology is as bad an idea now as it was in 1999.

2) Player, you are being played

Yes, that’s right Mr. mobile 4 development, I’ve got an app for that, incubator, mobile app challenge, startup, mobile entrepreneurship, etc. You are being played by the mobile operators who “join forces” with development agencies to solve the critical problems facing Africa. Well, news flash, the critical issue around mobile technology is not an app, it is price. The cost of access is the real barrier to innovation. In fifteen years of explosive mobile growth in Africa prices have not come down substantially. Why? Because mobile operators through their de facto control of mobile spectrum and because of the muddy position governments play as both investor and regulator, competition hasn’t bitten in most African countries, Kenya being a notable exception.

So when the foundation from a mobile operator or an aid agency subsidises the cost of access in an m4d project, are they doing it out of the goodness of their hearts? Well, that is no doubt part of it but the real bonus is that providing subsidies reduces the pressure that people with influence might bring to bear for lower prices in the market. Fewer voices that speak out with indignation about the high cost of access combined with the high profits being made by the mobile operators. The poor have no voice on this. If they did they might say that reducing the price of voice and SMS was a bigger priority for them than mobile broadband right now.

Mobile operators have entrenched themselves with development agencies as the saviours of access and give generously to m4d development programs. Development agencies have rushed to embrace mobile operators. Why? Because good business is now good development and although it may sound odd in the context of this post, I too believe this to be true. However, what the mobile operators have achieved through this embrace is the effective sidetracking of debates about competition and affordability. The mobile operators opine that the invisible hand of the market will bring down prices and there is a grain of truth to this in the same sense that it is true that I am mortal and will die one day… just not any time soon (insh’allah).

Finally, it is worth pointing out that mobile operators do not have an economic model for rural broadband access for the poor. LTE is not going to be economically viable for sparsely populated, poor, rural areas. If that matters to you then we should be thinking about broadening the discussion a little.

3) Resilience

If we have learned anything in the last three years, it is that monolithic, tightly linked industries are dangerous. They are dangerous because when they fail, they do so catastrophically. What we want is an ecology of technologies that will:

increase the resilience of networks, making it difficult for any one entity to interfere wholesale with access; and,
break the lock that mobile spectrum has on the market opening up new avenues of competition for access and through that driving down the cost of access.

So while Africa is busy embracing its mobile future, the United States appears to be embracing its WiFi future. According to this Comscore report

“In August 2011, more than one third (37.2 percent) of U.S. digital traffic coming from mobile phones occurred via a WiFi connection. This percentage grew nearly 3 points in just the past three months.”

And here is what telecom giant AT&T have to say:

Users now make 100 million AT&T Wi-Fi connections per month. Wi-Fi connections in a single month now exceed the total connections made in all of 2009 and are five times the total connections made in 2008.

Data carried on the AT&T Wi-Fi network more than doubled versus the third-quarter 201

But I am not advocating WiFi for Development, I am saying we should be thinking and talking about the whole access ecology. By failing to do that we are likely to miss important new trends.

Now, before you mention it, yes, I fully admit that there is a healthy amount of self-interest in what I’m saying. As a WiFi startup social enterprise, Village Telco, is often excluded from “mobile” challenges. But the reason I invest my time in Village Telco is because I believe all of the above. Development agencies could do a great deal of good by investing in policy advocacy around competition and access ecologies. Sadly it may be left to industry once again to figure this out as well. Kudos to Google for hiring a policy team in Africa.

Vodacom – Oh Really?

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Vodacom Group CEO Pieter Uys seems like a nice guy. I’ve never met him but you look at his picture and you think, here is a decent fellow. Which makes it all the harder to credit his defence of Vodacom’s pricing.

He spoke recently at the launch of a World Wide Web Foundation and Vodafone sponsored report entitled ‘Making Broadband Accessible for All‘. When questioned by ICASA General Manager of markets and competition, Pieter Grootes, about the significant disparity in pricing between Kenya and South Africa, a question hopefully inspired by this post, he had this to say:

“It’s not possible to have a call that lasts long in Kenya. And it’s not possible to have fast mobile broadband speeds at the same rate as SA. There’s a direct relationship between pricing and quality.”

He appears to be arguing that Vodacom has 9 times the call quality that Safaricom does and can thus justify charging 9 times what they charge. Now call quality in Kenya may not be perfect but I think it would be very hard to come up with real evidence to support an order of magnitude quality difference between South Africa and Kenya.

More to the point, why does Vodacom get to choose what kind of call quality we have? Why isn’t this something that the market establishes? Why can’t people choose a cheaper, lower quality network or a more expensive, higher quality network? The answer is simple. In South Africa, there is no market. There is just an uneasy alliance of rent-seekers. Just like in the world of professional wrestling there is a lot of bluster and talk of competition but when it comes to actually stepping up and squaring off with other mobile operators, the outcome is predetermined, the game fixed.

There are signs of hope though. 8ta’s recent dramatic drop in broadband charges is a possible sign of good things to come but the fact that it is only broadband that has been affected and that it is a temporary offer does not really represent the kind of tectonic shift in pricing needed, but you never know. It might be the gust of wind that presages a storm.

Interestingly, at the same session, Uys found an ally in researcher Winfred Mfuh, who said that

“constructing and renting a base station can be three-times the cost in SA than that of Kenya, where there are a lot of price considerations.”

I accept that putting up infrastructure may be cheaper in Kenya than South Africa, however, I doubt it needs to be three times more expensive in South Africa. Mobile operators in India have mastered the art of outsourcing infrastructure. Vodacom’s infrastructure is expensive because they’ve never had real market pressure on them to optimise their costs.

This is not idle speculation. South Africa’s expensive, uncompetitive telecommunications environment is well documented by researchers. Something worth considering closely when considering how new spectrum should be auctioned. A set-aside for new market entrants is a minimum consideration. In Canada, incumbent operators fought tooth and nail to prevent Egyptian-owned Wind Mobile from getting access to spectrum in the AWS auction two years ago. I see Wind Mobile now have the best mobile broadband prices in Canada. What a surprise.

Many Possibilities

In the beginner's mind there are…