SA’s long-awaited radio frequency spectrum auction, has netted the country’s telecoms regulator over R8bn so far, while bringing it ever closer to what is hoped to be a world of cheaper internet access and technology backed economic growth.
The Independent Communications Authority of SA (Icasa) said late on Friday the auction of the spectrum — the government-controlled airwaves that are licensed to mobile phone companies — had already surpassed its initial target.
“Icasa is pleased to announce that the auction is proceeding very well and can confirm that we have gradually passed estimated R8bn proceeds from the auction,” the regulator said in a statement.
State-affiliated Telkom and Patrice Motsepe-backed Rain, spent a combined R2.656bn on Tuesday in the first round of the auction. That was an opt-in round in which the largest operators, Vodacom and MTN, had not been eligible to participate.
The main event on Thursday saw multiple rounds of bidding on an online platform between 9am to 5pm.
“Generally, spectrum auctions of this nature can take weeks to clear,” the regular said without giving details on actual winners and specific amounts paid. However, “the authority will announce the winning bids attained by each bidder at the end of the auction stage”.
The completion of this auction will be a major victory for Icasa, which has been under pressure from mobile operators and President Cyril Ramaphosa to issue the radio waves.
The regulator spent much of 2021 redrafting its plan for the auction after an agreement with mobile operators, which was endorsed by the high court in September. The regulator had planned to auction about R8bn worth of broadband spectrum exactly a year ago, but the March 2021 deadline could not be met because of legal battles over the process.
By some estimates, Icasa is expected to make as much as R11bn from the auction, with the National Treasury having set aside over R1bn to get the process wrapped up.
With the main auction completed, the final piece will be the assignment phase, an administrative process to determine the allocation of spectrum won by each of the operators.
The regulator said there will be one business day between the conclusion of the main auction and the start of the assignment phase, which will be concluded in a day.
For now, the auction is set to proceed on March 14 at 9am.
The more than 10-year delay in allocating spectrum, referred to in the industry as the “spectrum crunch”, made the cost of telecommunication in SA among the world’s highest. This prompted Ramaphosa to list the issue as one of the most important in which reforms by his government could boost growth. The last time SA released spectrum was in 2004/2005.
Even as Icasa is proceeding with the auction, it has a number of issues to deal with to fully complete it.
First is a legal challenge by partially state-owned operator Telkom, which has been picking apart the regulator’s plan for issuing new spectrum for more than a year.
In the latest challenge, Telkom filed an application asking the high court to review and set aside the regulator’s invitation to apply, citing a number of flaws in the proposal.
Telkom intimated that proceeding with the auction may be a fruitless exercise, especially if the outcome of the case — which is set to be heard in April — will have an effect on allocation.
On Monday, Telkom asked for a structural interdict that would put Icasa under the supervision of the court, ahead of the auction.
The other issue is completing the move from analogue to digital television broadcast services, yet another long-delayed process. Its completion will free up some of the spectrum that mobile operators have been clamouring for. These radio waves are good for covering large distances, thereby reducing the need to build many towers to do the same job.
Communications & digital technologies minister Khumbudzo Ntshavheni is leading the charge, hoping to complete the switch by end-March. However, even this process is subject to a legal challenge by e.tv, which Icasa has now joined on the side of the minister.
“Icasa hereby announces that it has joined the litigation in support of the minister to see this process concluded without further delay.”
The watchdog said SA has been lagging behind and this process “must be concluded sooner rather than later and Icasa is calling on all broadcasters and stakeholders in general to support the conclusion of this process.”
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