On 17 March 2022, the Independent Communications Authority of South Africa (ICASA), the country’s telecommunications regulator, concluded its long-awaited auction of licenses for state-controlled radio frequency spectrum. The last time South Africa released spectrum was in 2005. The further release of spectrum is regarded as crucial to expanding internet connectivity and reducing prices in South Africa; the high cost of electronic communication in South Africa has largely been blamed on a lack of competition and the “spectrum crunch”.
In December 2021, ICASA issued the invitation to apply (ITA) document, which set out how mobile operators would bid for the airwaves through which data is transmitted. On 21 February 2022 the regulator issued a list of qualified bidders for the upcoming spectrum auction: Cell C, Liquid Telecom, MTN, Rain, Telkom, and Vodacom.
The first phase of the auction commenced on 8 March 2022, followed by the main stage auction on 10 March. Rain and Telkom emerged as the winning bidders in the first round, successfully bidding for spectrum in the 700 MHz, 800 MHz, and 2,600 MHz bands. ICASA did not reveal the winning bidders of the 10 March auction, noting that spectrum auctions of this nature can take weeks to clear. ICASA had initially planned to raise R8 billion through the sale, but ultimately collected almost double the anticipated amount, totalling more than R14.4 billion.
The spectrum auction is expected to increase broadband connectivity in South Africa and lower the costs of voice and data communication. Network operators also hope to use the additional broadband spectrum to expand 4G and 5G technologies in South Africa.
The spectrum auction process has faced repeated delays and legal challenges. ICASA proceeded with the auction this month despite pending litigation from Telkom seeking to challenge aspects of the process. Telkom has expressed concern with how ICASA has handled the licensing process and its impact on competition, and the high court is reportedly scheduled to hear Telkom’s application from 11 to 14 April 2022. If Telkom’s legal action is successful, this may mean that the auction will have to be rerun.
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