Telecommunications giant MTN South Africa on Thursday expressed its disappointment that the spectrum impasse has not yet been resolved, reiterating that data costs will not decline until the high-demand spectrum, at the very minimum in the 2 600 MHz band, is released.

Speaking at the yearly MyBroadband Conference, in Midrand, on Thursday, MTN SA CEO Godfrey Motsa said the lack of spectrum has doubled the capital expenditure (capex) required by operators and was the reason data prices remained so high.

Pointing to what effectively was a subsidisation of the “spectrum crunch”, Motsa highlighted the increase in capex from R5-billion a few years ago to more than R10-billion in the last three years to compensate for the lack of access to high-demand spectrum.

“This kind of capex is not sustainable,” he argued.

Spectrum allocation remains one of the most challenging of the headwinds facing the industry, as it becomes increasingly difficult – and costly – without additional spectrum to expand to meet the demands of increased volumes and far-flung rural areas.

In July, Finance Minister Malusi Gigaba, under a new 14-point action plan to revive South Africa’s recessionary economy, issued a directive to Telecommunications and Postal Services Minister Dr Siyabonga Cwele to complete the already years-long delayed spectrum licensing process by December 2018.

The Council for Scientific and Industrial Research also completed a study on spectrum availability and open-access on behalf of the Department of Telecommunications and Postal Services.

The study aimed to determine the appropriate quantity of high-demand spectrum to be set aside for the State’s planned wireless open-access network to roll out a fourth-generation network, with the remaining high-demand spectrum to be assigned to existing licensees through an allocation process yet to be determined.

In August, Economic Development Minister Ebrahim Patel directed the Competition Commission to launch a market inquiry into data services on suspicions that there are features in the market that prevent, distort or restrict competition within the sector.

The inquiry has been actively investigating anticompetitive behaviour, with Patel currently finalising draft legislation to improve policy and the legal framework on competition issues.

However, Motsa said it was disappointing that the dragged-out challenge remained unresolved, describing it as a “dream deferred” that no spectrum auction was announced during Gigaba’s maiden mini-budget speech on Wednesday.

“This is costing the poor,” he said, stressing that if spectrum was released, 1 GB of data could sell for as low as R50.

Vodacom CEO Shameel Joosub agreed, stating that a spectrum-strapped industry still remained a huge problem despite the participants having started the discussion more than a decade ago.

“If you want to bring the cost of data down, you have to bring the underlying cost to carry a megabyte or gigabyte of data down. The only way you can do that is to invest,” he said.

Vodacom, and other South African network operators, have had to inject capex into building more sites to cope with higher volumes, instead of injecting the funds into capacity building and unlocking more efficient use of spectrum.

Vodacom innovation head Jannie van Zyl said engineers have “done a great job” in re-engineering the capacity approach and “squeezing the spectrum” to meet demands for better service and higher reliability amid an ever-increasing base of consumers.

However, there is only so much that could be done before quality suffers, he concluded.