Vodacom says it will go the High Court for a review of the decision by the Independent Communications Authority of SA (ICASA) not to grant the incumbent mobile operators access to the 1800MHz frequency spectrum.
"Vodacom intends to take ICASA`s decisions on review," announced corporate affairs group executive Joan Joffe at a press briefing yesterday afternoon.
MTN spokesman Jacques Sellschop, who attended the briefing to offer "moral support", would not commit his company to action but said it was possible for the competitors to team up in legal action for the first time in their histories.
"We are studying the situation and in due course will arrive at a decision," he said.
Spectrum squeezing
The decision to deny the spectrum, announced on Friday, follows a process of more than one-and-a-half years since Vodacom`s first application on the matter, and the company says it cannot squeeze any more capacity out of its current allocation.
"We have had help from the likes of Siemens and Motorola to squeeze all the capacity we can out of our 900MHz," said group MD Andrew Mthembu. "We are using the best ideas in the world, but we are running out of ideas."
He warned of dire consequences should the 1800MHz spectrum remain unavailable.
"If the situation continues, we will start hitting problems with our network towards the end of the year," he said, referring to calls dropped because of insufficient capacity. The first hotspots likely to be affected are the Sandton and Rosebank areas.
MTN said the impact on its subscribers will not be as severe, but added that it is examining the consequences.
"MTN users need to expect an immediate, or medium-term, decline in service," said Sellschop.
Mthembu said Vodacom would consider "toning down" its sales and marketing drive by pouring less money into its channel. One outcome could be the closure of smaller cellular retail outlets.
"This not only affects Vodacom," said Joffe. "It affects the industry, it affects consumers, the public and the economy as a whole."
Vodacom has used court action as a prod to speed the frequency allocation process on at least three occasions, including a High Court motion filled in November last year.
The company says it has proven efficient use of its current spectrum, that a third licensee will have enough spectrum available to it even with the new allocation, and that ICASA is in contempt of court because it has not proceeded with a previously ordered spectrum audit.
External influences
It also hints at darker motive behind the denial.
"On 15 September 2000, ICASA called Vodacom and MTN to a meeting and informed them that ICASA were under pressure from unnamed sources to include additional obligations in Vodacom and MTN`s cellular licences before they could be awarded the 1800 spectrum," Mthembu said, reading from a statement.
"Vodacom and MTN strongly objected since the two processes were not linked, and strongly advised ICASA not to subject themselves to outside interference in the process."
The interference, apparently from government sources, was allegedly aimed at smoothing the way for a new operator once its licence had been granted.
Vodacom also took issue with the basis for ICASA`s decision when it came to third licence bidders.
"ICASA ignored most of the facts as presented to them," Mthembu said. "They also relied more on the statements made by Nextcom, which is currently not being considered for the third cellular licence, than on Cell C, which is currently the preferred bidder for the third licence and which supported the allocation of the 1800 spectrum to Vodacom and MTN."
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