The first stage of the country’s long-awaited spectrum auction is underway, but it will not be until later in the week that Vodacom and MTN are allowed to join in
After copious delays spanning years, the first stage of South Africa’s long-awaited spectrum auction is now complete.
South African mobile operators have long been crying out for additional spectrum from the Independent Communications Authority of South Africa (ICASA), having not been allocated new spectrum licences for around 17 years.
This all changed at the start of the coronavirus pandemic, when ICASA announced that it would allocate temporary spectrum licences to the operators. This not only served to alleviate the pressure of network demand during a national lockdown but has since allowed the operators to tentatively launch 5G commercial services.
These temporary licences were set to expire in November last year, but pleas from the operators have seen the terms extended to June 2022.
Now, with the start of the spectrum auction process, South Africa’s operators will be reliant on this temporary spectrum no longer.
Last month, ICASA announced that MTN, Vodacom, Telkom, Cell C, Rain Networks, and Liquid Telecom had all successfully applied
to take part in the process, which will see frequencies in the 700MHz, 800MHz, 2.6GHz and 3.5GHz bands available to be won.
The auction process is split into three stages, the ‘opt-in’ stage, the auction proper, and the allocation phase.
The opt-in auction, which began yesterday, has already concluded, with Rain and Telekom emerging as winners; Rain acquired 2x10MHz of spectrum in the 700MHz band, and 10MHz in the 2.6GHz band, while Telkom picked up 2x10MHz in the 2.6GHz band. In total, the pair paid roughly $175 million.
This phase of the auction was intended to allow South Africa’s smaller operators the chance to procure a minimum spectrum portfolio (MSP) of least two 10MHz blocks below 1GHz and 60MHz of spectrum above this frequency, including their pre-existing spectrum holdings.
As such, only two bidders could win spectrum to achieve the MSP in this auction and the larger operators, MTN and Vodacom, were excluded from taking part.
The main phase of the auction will begin tomorrow, with all six players allowed to participate.
“The licensing of this spectrum through an auction has major economic and social benefits for our country, especially during this time when the economy is emerging from the ravages of the COVID-19 pandemic. This process provides a critical stimulus for economic recovery and has the potential to stimulate employment by leveraging on ICT networks and digital platforms to deliver economic value for the South African society,” said Dr Keabetswe Modimoeng, Chairperson of ICASA.
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