The South African spectrum auctions are over – or are they?

The South African spectrum auctions are over – or are they?

It seems the long-running saga of South Africa’s auction of high-demand spectrum for mobile broadband may finally have ended on a positive note, raising R14.4 billion (about US$960.7 million) for the country’s treasury. This is way above the R8 billion (US$533.7 million) a lot of analysts, and indeed the government, had been expecting.

Regulator the Independent Communications Authority of South Africa (ICASA) said operators Vodacom, MTN, Rain, Telkom, Cell C and Liquid Telecom had all bid for, and obtained, spectrum licenses. However Vodacom and MTN were by far the biggest spenders, and winners, in the auction. MTN acquired a total of 100MHz. Vodacom acquired 110MHz.

The two market leaders are putting up over R5 billion (US$333.7 million) each, for which they will get a hefty amount of 2.6GHz and 3.5GHz band spectrum. Local press reports suggest that this will be important for rolling out more coverage based on 4G and LTE and for deploying next-generation 5G networks. Both operators also won some 800MHz spectrum.

As for the other bidders, Telkom picked up 20MHz at 800MHz and 22MHz at 3.5GHz for a total of R2.2 billion (US$146.8 million). Rain won 20MHz at 700MHz and 20MHz at 2.6GHz for a total of R1.4 billion (US$93.4 million). Cell C got 10MHz at 3.5GHz for R288.2 million (US$19.2 million). Finally, Liquid Intelligent Technologies secured 4MHz at 3.5GHz for R111 million (US$7.4 million).

There was one unsold spectrum lot of 2x10MHz in the 800MHz band, which will be sold later, ICASA said in a statement. It added: “The next stage in the auction process will be the assignment round, which is purely an administrative process and will be held on Tuesday, 22 March.”

Amid what seems to be delight on the part of ICASA, most operators and possibly many end users frustrated by limited services over the years, there are a few outstanding questions, not least regarding Telkom’s ongoing legal challenge to the auction process.

Also Cell C has asked how spectrum that had been set aside for the now abandoned planned wholesale open-access network (WOAN) will be allocated. It will not be alone in wanting an answer to that question.


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