ACT speaks out against SA's 2G, 3G shutdown deadlines

South Africa's Association of Comms and Technology (ACT) is not in favor of new deadlines issued by the government for the sunset of 2G and 3G networks, calling rather for an industry-led approach to phase the technologies out.

ACT CEO Nomvuyiso Batyi told Connecting Africa that the decision by the Department of Communications and Digital Technologies (DCDT) to extend the switch-off date for 2G and 3G to December 31, 2027, "has not been well received" by ACT and its members.

"ACT does not believe this approach is ideal and continues to advocate for an industry-led process where users are encouraged to adopt newer technologies without strict government-imposed deadlines," she told Connecting Africa.

"ACT believes this is a more prudent approach to avoid the risk of disrupting services for millions of users who still rely on legacy technologies and to manage the transition at a realistic pace instead of targeting strict government-imposed deadlines," Batyi continued.

Launched in August 2022, ACT focuses on ecosystem matters of importance to the broader ICT sector and aims to provide a unified voice for the industry in the South African economy. Its members include Cell C, Vodacom, MTN, Telkom, Rain and Liquid Intelligent Technologies.

Batyi's comments come after the DCDT published a government gazette outlining the roadmap for the shutdown of both 2G and 3G in the country.

Under the new guidelines, South Africa's mobile operators will be prohibited from activating any new 2G and 3G devices at the end of December 2024 and will have to shut down their 2G and 3G networks by December 31, 2027.

The deadlines are an improvement on the previous schedule, which stipulated a shutdown of 2G networks by June 30, 2024, and 3G by March 30, 2025.

"The date is an improvement; however, it is not backed by a roadmap on how to migrate the communities who could be left without connectivity. The new timeline does not guarantee that consumers will have migrated to compatible devices to the latest technology network," Batyi argued.

She said that society consumption behavior must dictate the switch-off date, otherwise telcos risk denying services to millions of users who are still dependent on the legacy devices using these networks.

"The timelines are a problem because they are not based on data or process that indicates that communities will by then have 4G and 5G handsets, which are currently not affordable in our economic conditions; while the 2G and 3G [handsets] are cheaper and are widely in circulating," she added.

The government has argued that switching off 2G and 3G would free up spectrum that could instead be used for more advanced technologies like 4G and 5G.

Batyi said that SA's operators are actually in support of a shutdown of 2G and 3G – given that it is costly to operate, maintain, and power parallel 2G, 3G, 4G and 5G networks all at the same time.

"However, they support an industry-led process that is data driven with a road map that takes into account on-the-ground changing consumer patterns," she explained about the view of ACT's members.

New deadlines could leave millions without access

"South Africa's economic situation is different from developed countries where adoption of smart devices is widely taken by the majority. South Africa is economically unequal and has high unemployment. The 2G and 3G devices are affordable to these segments of society," Batyi said. "Lower income communities are not able to afford 4G and 5G [devices]."

"According to the Independent Communications Authority of South Africa (ICASA) State of the ICT Sector Report 2023, there are 73 million smartphone subscribers in South Africa with the overall number of mobile subscriptions at around 106 million – which gives a sense of the internal digital divide when it comes to access to these handsets," she added.

ACT argues that lower income communities in South Africa are not able to afford 4G and 5G devices and that the phasing out of 2G and 3G should take into account society consumption behavior. (Source: Johan Siebke / Alamy Stock Photo)

The ACT CEO said the sunset of 2G and 3G in South Africa should be industry led – with network operators, the government and the regulator playing a role and ensuring universal access and services.

"At the beginning of 2022, over a period of seven years, a total of 56 networks have been shut down [globally], of which 36 were 2G networks and 20 were 3G networks. None of the network shutdowns observed were because of strict government-set deadlines. These shutdowns were mainly market-led, with regulatory guidance provided by the relevant regulator," she argued.

Affordability and taxation issues

Batyi believes that affordability is a key issue when it comes to enabling the adoption of smartphones that will be needed to use 4G and 5G networks in place of legacy technologies like 2G or 3G.

"This is a pressing problem to be overcome in the next two years and ACT presented to the Department of Trade and Industry to look at a possible reduction in customs duties to make these devices more affordable to all," she said.

She pointed out that the South African Revenue Service classifies imported smartphones as luxury items and are subject to a "luxury tax" of 15% as well as an additional duty of 7%.

"So, for example, a device priced at R10,000 [US$530] would immediately attract another R2,750 [US$146] in taxes. The incentives for operators to upgrade their networks are low if consumers cannot afford to make use of the more advanced technologies and a lack of adoption will threaten existing revenue," she said.

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"ACT has also made a submission to ICASA to start looking at reducing the circulation of legacy devices through the withdrawal of new type approval of these legacy devices," she said, adding that ACT is seeking legal advice on the spectrum policy.

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*Top image is of Association of Comms and Technology CEO Nomvuyiso Batyi.
(Source: Association of Comms and Technology website.)

— Paula Gilbert, Editor, Connecting Africa