MTN is suing the telecommunications regulator, seeking to void a rule that blocks it and Vodacom from bidding for the ultra-fast 5G radio frequency spectrum in early auction rounds, fearing smaller competitors would leave very little on the table.
The Independent Communications Authority of SA (Icasa) outlined plans in 2020 to auction off spectrum — wireless radio airwaves by which information is transmitted — by the end of March.
The move was welcomed by industry, which has had to make do and repurpose the frequency bands historically used for voice calls to handle an increasing amount of internet data traffic.
At the heart of the suit filed on Wednesday, MTN, SA’s second-largest mobile phone group, accused Icasa of creating "an irrational" auction process.
MTN and Vodacom would be barred from participating in certain rounds of the auction for the band that is necessary for the next-generation 5G network, which will supercharge mobile phones and potentially power everything from factory production lines to driverless cars.
MTN, which is seeking to have the process changed, fears smaller rivals such as Cell C and Telkom would take up much of the spectrum on offer before it has had its turn, putting it at a commercial disadvantage.
MTN is the second company to take Icasa to court over the process. Telkom launched a challenge in 2020 to have the auction blocked because it would entrench the big two mobile phone operators’ dominance in the sector.
A prolonged legal squabble over the process could be a blow to President Cyril Ramaphosa’s reform agenda. He told the virtual World Economic Forum this week that the spectrum allocation by the end of March was evidence of commitment to get rid of structural impediments to robust economic growth.
MTN is asking the court to set aside the tiering categorisation and remove the opt-in rounds, which it describes as "irrational and inconsistent". The mobile operator also contends that the proposed process would give competitors such as Telkom and Liquid, which already have 5G spectrum, even more of the sought-after resource.
"It is irrational to exclude operators that make best use of the spectrum and value it the most, whilst rewarding the most inefficient users of this public good with more spectrum."
It is unclear if Vodacom will join the suit.
MTN and Vodacom both launched 5G services last year using temporary spectrum allocations awarded to them during the lockdown period to cope with the increased need for communications brought on by the Covid-19 pandemic.
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