Vodacom applied for 1800 spectrum on 4 February 1999. On 11 November 1999 court action forced SATRA to proceed properly in considering this application after months of bureaucratic delays. As a result SATRA held public hearings on 14 March 2000. On 24 May 2000 SATRA indicated that they needed to complete an audit of Vodacom`s spectrum efficiency before making a decision on Vodacom`s application. In June 2000 the court forced SATRA to get on with the audit and complete it by 31 August 2000.
On 18 August 2000 ICASA called Vodacom and MTN to a meeting and informed them that ICASA had not done the audit as per the court order and did not intend doing the audit as per the court order. ICASA were therefore in contempt of court in terms of that court ruling. They proposed, however, that they Vodacom and MTN surrender 900 spectrum before receiving 1800 spectrum. On 23 August 2000 Vodacom and MTN reluctantly agreed, but reserved their rights.
On 31 August 2000 ICASA published that Vodacom`s spectrum application had been denied since ICASA were convinced that the third cellular network would require 900 spectrum to be competitive and proposed that Vodacom and MTN give up 900 spectrum for 1800 spectrum.
On 15 September 2000 Business Day reported that the Minister of Telecommunications had stated on 14 September that Vodacom and MTN should accept additional tougher licence obligations.
On 15 September 2000 ICASA once more 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 1800 spectrum. 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.
On 3 November 2000, ICASA announced that it had withdrawn its own proposal, and that Vodacom and MTN would therefore not receive 1800 spectrum. In their judgement they indicated that they were of the opinion that the third licence would not need 900 spectrum, that Vodacom and MTN had not used their spectrum efficiently, that there was a scarcity of spectrum, and intimated that Vodacom and MTN should have their licence conditions reviewed.
Vodacom intend to take ICASA`s decision on review since:
1. Vodacom have produced, and submitted to ICASA, a number of internal and independent studies that conclusively show that Vodacom has used its spectrum efficiently;
2. ICASA are in contempt of court for not proceeding with a spectrum audit as ordered by the court;
3. Vodacom and MTN currently use 22Mhz of 900 spectrum to support 7 million cellular users. The total South African market is estimated at 21 million users. There is 75Mhz of 1800 spectrum which is free for GSM cellular in South Africa. There is clearly enough spectrum for two or three additional licences, as well as Vodacom and MTN;
4. ICASA ignored most of the facts as presented to them. They also relied more on the statements made by Nextcom who are currently not being considered for the third cellular licence, than on CellC which is currently the preferred bidder for the third licence and who supported the allocation of 1800 spectrum to Vodacom and MTN on 14 March 2000 and on 18 October 2000.
5. ICASA have suggested that 1800 spectrum will not be issued until a third licence has been awarded, despite a statement by the Cabinet that no party should have exclusive use of the 1800 spectrum. ICASA have no idea when a third licence will be issued;
6. It would appear that ICASA may have been unduly influenced by outside parties.
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Events leading up to current 1800 spectrum impasse
4 February 1999
Vodacom submitted its application to SATRA for 5MHz of 1800 spectrum in Gauteng, Durban and Cape Town.
8 February 1999
SATRA requested additional information on spectrum efficiency and radio capacity enhancement techniques, indicating that those were the key criteria for consideration of Vodacom`s application for 1800 spectrum.
29 April 1999
Vodacom supplied additional information in writing as requested by SATRA.
30 April 1999
Mr. Alan Knott-Craig, Vodacom Group CEO, and Dr. Hasmukh Gajjar, Vodacom Group Chairman, met with Mr. Nape Maepa, Chairperson of SATRA, at the SATRA offices at Pinmill Farm. Mr. Maepa verbally requested that Vodacom make an offer to relinquish some 900 spectrum, in return for a grant of 1800 spectrum, in order that the third licensee might have a better chance of competing.
11 May 1999
Mr Knott-Craig wrote to SATRA offering to relinquish 900 spectrum in return for a grant of 1800MHz spectrum as suggested by Mr Maepa.
7 June 1999
Mr. Maepa responded in writing on behalf of SATRA that it could not consider the proposal at that time as it could have a destabilising influence on the forthcoming third cellular network licencing process. He noted that SATRA was considering the matter of Vodacom`s access to 1800 spectrum "on its own merits, a process that is continuing and should be concluded in due course."
21 August 1999
Mr. Mothibi Ramusi, SATRA`s Acting General Manager Spectrum Management, met with Mr. Knott-Craig and other Vodacom representatives at Vodaworld for discussions on the commercial implications of 1800 spectrum. He indicated that SATRA were not aware of these and requested that Vodacom should submit these commercial arguments in writing to SATRA, as he felt that these were important and should also be taken into consideration.
22 August 1999
Mr. Knott-Craig supplied Mr. Ramusi with these arguments in a letter, and copied Mr. Maepa.
21 September 1999
Vodacom requested to meet with Mr. Ramusi to present information regarding the spectrum situation in Gauteng. This request was refused.
Vodacom was further advised that it had to complete an "application form" for SATRA to properly consider its 1800 spectrum application. Since such an "Application Form" did not exist and had not been mentioned before, a meeting with Mr. Ramusi and Mr. Maepa to discuss procedural issues relating to the 1800 spectrum application was urgently requested. This request was ignored.
1 October 1999
Vodacom submitted a "form" as best it could, and demanded that its application be dealt with in terms of the procedure as prescribed in SATRA regulation G10A within 14 days.
11 October 1999
SATRA advised Vodacom that its application had been forwarded to the Radiocommunications Licensing Committee who would advise SATRA on the process to be followed.
20 October 1999
Vodacom`s attorneys placed SATRA on terms to give a firm undertaking to proceed with the G10A process by 22 October 1999. This undertaking was not forthcoming.
11 November 1999
Vodacom filed a motion in the High Court requesting an order compelling SATRA to publish the G10A notice and to comply with further procedures laid down in the regulation. SATRA`s attorneys indicated that SATRA would not oppose the motion, but that SATRA would publish the notice. Vodacom postponed the court date.
18 January 2000
SATRA published General Notice 289 of 2000 in the Government Gazette after an unexplained delay since October of over three months. The notice advised the public of SATRA`s intention to amend Vodacom`s and MTN`s frequency licences, and gave notice that written representations should be made not later than 14 February 2000.
14-16 March 2000
The public hearings on the applications commenced on 14 March 2000 and were concluded on 16 March 2000.
The Chairperson of the Public Hearing, Mr. Nape Maepa, expressly stated that the hearings had nothing to do with the third network licencing process.
Mr. Maepa`s closing remarks on the 16th of March 2000 before closing the proceedings were as follows: "Thank you very much. This concludes the public hearings with respect to the applications of MTN and Vodacom under Regulation G(10)(a) of the Authority. The panel will consider these matters very soon, hopefully in the next week, and then you will be hearing from the Authority. Thank you."
8 April 2000
Vodacom submitted further information regarding comparative spectrum efficiency studies undertaken by consulting firms Deloitte & Touche and Arthur Andersen.
10 April 2000
Mr. Knott-Craig addressed a letter to Mr. Maepa urging SATRA to make a decision. Mr. Knott-Craig reiterated the urgency of the matter.
13 April 2000
Mr. Maepa replied in writing that "the Authority is in the process of considering the amendment of Mobile Telephone Network (Pty) Limited and Vodacom (Pty) Limited spectrum licences in accordance with Radio Regulation G10 A..." He further stated, "In considering the above matters, the SATRA panel for the hearing is in the final stage of presenting the recommendation to Council for further consideration and approval as per Section 14(5) of the Act. Considering the urgency of the matter, the Authority shall within reasonable time make known the findings and these will be published in the Government Gazette in the near future."
2 May 2000
Vodacom sent SATRA a letter reminding it, among other things, of the urgency of the matter, but received no response until Vodacom`s attorney`s put SATRA on terms.
24 May 2000
SATRA wrote to Vodacom, indicating that it intended to obtain an opinion on legal issues and to commission an independent study into Vodacom`s spectrum efficiency in the affected areas in accordance with a stated timetable for the completion of the study.
25 May 2000
SATRA published an invitation to tender in the Government Gazette for the performance of an independent study into Vodacom`s spectrum efficiency. However, neither the date for the closure of the tender nor the completion of the study was consistent with the timing indicated in the timetable presented in SATRA`s letter of the 24th, and would have extended the decision-making date well into September.
30 May 2000
Vodacom`s attorneys advised SATRA it had departed from its own timetable and requested a firm undertaking from SATRA to hold to a timetable for the audit that would lead to a final decision being taken and communicated to Vodacom by 31 August 2000. No response was received.
8 June 2000
Vodacom filed a motion in the High Court requesting that SATRA be ordered to comply with the above timetable. Again, SATRA did not oppose the motion. The court order incorporated the timetable and made it binding.
12 July 2000
ICASA took over from SATRA and decided not proceed to with the commissioning of an independent audit. It decided to conduct a smaller audit using its own resources and personnel. That audit was never completed.
18 August 2000
ICASA Councillor W. Currie and ICASA officials met with Vodacom (and MTN) and advised the parties of Council`s decision to refuse the applications for reasons relating to competition, and of its intention to publish its decision and the reasons for the decision in the Government Gazette on 31 August 2000. (Mr. Currie indicated that ICASA would make no finding regarding spectrum efficiency.) However, Councillor Currie further indicated that ICASA would simultaneously publish its intention to amend Vodacom`s and MTN`s frequency spectrum licences to provide for the relinquishment to ICASA of 2MHz of 900 spectrum, and a grant of 10MHz of 1800 spectrum, as it was ICASA`s view that this was a necessary measure to ensure effective competition in the cellular market when the 3rd operator is licensed. It was emphasised that ICASA wanted to deal with this matter afresh (i.e. without any of the history of problems associated with SATRA). Vodacom reserved its rights in respect of the negative decision on its application, but indicated that it would in good faith consider participating in ICASA`s proposed 30(6)(a) process for the sake of progress.
23 August 2000
Alan Knott-Craig and other Vodacom representatives (and MTN representatives) met with Councillor Currie and ICASA staff and discussed the proposed relinquishment of 900 spectrum and grant of 1800 spectrum. It was accepted that this was ICASA`s considered opinion and would be a reasonable intended amendment.
31 August 2000
ICASA published General Notice 3069, in which it made certain findings and observations regarding additional mobile cellular operators and then stated, "Given the above, ICASA cannot grant a request for use of additional frequencies by an existing [mobile cellular] licensee unless the request, if granted, would leave in the Authority`s view, sufficient frequency spectrum for fair competition for the third (and fourth) licensees so that such additional licensees may have access to both 900 and 1800 MHz frequencies." It concluded, "Because the requests of Vodacom and MTN would not leave such frequency spectrum available (in the 900 band), the requests are denied." It should be noted that no findings or decisions in respect of spectrum efficiency were made.
General Notices 3068 and 3070 indicated that ICASA intended to amend Vodacom`s and MTN`s spectrum licences to provide for a relinquishment of 2MHz of 900 spectrum and a grant of 10MHz of 1800 spectrum, and to make consequential amendments to their service licences to authorise dual band operation. The Notices called for written comments by 18 September 2000.
14 September 2000
Alan Knott-Craig and other Vodacom representatives (and MTN representatives) were invited to meet at ICASA on the 15th, as it turned out, with Councillors Currie and Y. Carrim.
15 September 2000
An article appeared in the Business Day which reported that the Minister of Posts, Telecommunications and Broadcasting had indicated during a briefing in Parliament on the 14th that Vodacom and MTN should have tougher licence conditions imposed. The Councillors noted various pressures that they were being subjected to by outside parties, in that these parties wanted tougher licence conditions to be incorporated in Vodacom`s and MTN`s licences before they received 1800 spectrum. It was understood that these pressures were being exerted on ICASA by Government.
Vodacom strongly objected to the interference by Government, and indicated that they would not accept any changes in the nature and scope of the administrative proceedings that ICASA had initiated regarding the spectrum.
20 September 2000
Vodacom submitted extensive written representations on the cellular market, competition, micro and macro economic impacts of the relinquishment of spectrum, Vodacom`s spectrum needs and spectrum efficiency. The latter included reports from Deloite & Touche Consulting and PriceWaterhousCoopers on the issue of spectrum efficiency, all of which indicated that Vodacom is a spectrally efficient network and that it utilises all of the global best practices and techniques for maximising spectrum efficiency.
18-19 October 2000
Public hearings were held at which further submissions were made by Vodacom, MTN and other interested parties on various points. No evidence was tabled which indicated that Vodacom was not spectrum efficient. The Chairperson, Mr Langa, indicated a decision would be made by the end of the month.
31 October 2000
ICASA telephonically communicated to Vodacom that it would require until the end of the week to make or announce its decision. Vodacom indicated that it had no objection to the request.
3 November 2000
ICASA announced its decision not to approve the proposed amendments.