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Big telcos want more spectrum amid pushback request

Simnikiwe Mzekandaba
By Simnikiwe Mzekandaba, IT in government editor
Johannesburg, 29 Nov 2023
Last year’s spectrum auction raised R14.4 billion for the national fiscus.
Last year’s spectrum auction raised R14.4 billion for the national fiscus.

As the Independent Communications Authority of South Africa (ICASA) prioritises auctioning more spectrum early next year, some mobile network operators (MNOs) are keenly awaiting the assignment of additional spectrum.

After last year’s “historic” auction, ICASA earmarked 2024 to complete the next phase of the International Mobile Telecommunications (IMT) spectrum licensing.

The licensing process is availing spectrum resources on the following identified IMT bands: IMT750, IMT800, IMT1500, IMT2300, IMT3300 and IMT3500.

With these plans in place, SA’s third-largest operator Telkom last week revealed it has asked ICASA to postpone the next spectrum auction to 2025, citing current economic challenges, among others.

However, this is not the position of all the MNOs, with SA’s largest operators – MTN and Vodacom – looking to the telecoms regulator to assign more spectrum.

Vodacom spokesperson Byron Kennedy says: “Vodacom is supportive of more spectrum being assigned to those that have the skills and investment capacity to improve digital services to customers. South Africa’s 2022 IMT auction has been an enormous step in the right direction.

“Over the last few years, ICASA has been working hard with MNOs and other interested and affected stakeholders to prepare the country for the next round of assignment that has the potential to bring the country up to similar levels of assignment as Europe and other leading mobile markets.

“While these are indeed challenging times, we believe it should be possible for ICASA to design a process that considers such circumstances, and allows for realistic and fair assignment prices and obligations,” comments Kennedy.

Jacqui O'Sullivan, chief sustainability and corporate affairs officer of MTN SA, says the telco opposes any delay in the next round of spectrum auctioning.

“Mobile broadband is a critical piece of economic infrastructure linked by many studies to economic growth, job creation, inclusiveness and empowerment, and spectrum is the lifeblood to deliver these benefits.

“The allocation of spectrum in 2022 has delivered tangible results and offers a blueprint of how to allocate spectrum on a more effective and equitable basis going forward. South Africa must remain at the forefront of technological development, to ensure South Africans have fair and equal opportunity to participate in the digital economy, while further contributing to the growth of the economy at large.

“In order to continue delivering the quality service levels South African customers have come to expect, additional spectrum in the new year will be an imperative, not a ‘nice to have’.

“Spectrum is the oxygen of the telecommunications sector and in this ever-changing world, where the fourth industrial revolution is no longer pending, but is upon us,” says O'Sullivan.

“To this end, the telecommunications industry is rapidly becoming a critical component in social and economic development and growth. With the proliferation of bandwidth-hungry applications and devices servicing the fourth industrial revolution, a delay in the issuance of additional spectrum will be in direct opposition to what South Africa, as a developing country, requires.

“Progress, growth and development cannot be postponed − it is not in the interest of South Africans and their participation in the digital economy,” emphasises O'Sullivan.

Meanwhile, the other two MNOs – Cell C and Rain – are taking a wait and see stance.

Says Rain: “We will only be able to comment on the auction when more specific information becomes available.”

Cell C notes it has no position on the matter, stating: “Cell C will review its position when the time comes.”

After more than a decade, local mobile operators were finally able to acquire high-demand radio frequency spectrum last year. The previous big set of spectrum issued was in the 2.1GHz band, which helped the operators in their 3G network deployment.

In March 2022, ICASA concluded the auction of the IMT radio frequency spectrum – also known as high-demand radio frequency spectrum – raising R14.4 billion for the national fiscus.

Six mobile players – Cell C, Liquid Intelligent Technologies, MTN, Rain Networks, Telkom and Vodacom – acquired spectrum across various frequency bands.

A summary of the spectrum acquired by each bidder across the entire auction process. (Source: ICASA)
A summary of the spectrum acquired by each bidder across the entire auction process. (Source: ICASA)

In its interim financial results for the six months ended 30 September, Vodacom reveals it secured 110MHz of high-demand spectrum, including 2 x 10MHz in the 700MHz spectrum band, 80MHz in the 2 600MHz spectrum band, and 10MHz in the 3 500MHz spectrum band, for R5.4 billion.

MTN’s South African business acquired 100MHz of spectrum − 2 x 10MHz in the 800MHz band, and 40MHz in the 2 600MHz and 3 500MHz spectrum bands, respectively.

The previous spectrum auction released much-needed spectrum in the low and mid spectrum bands, notes MTN SA’s O'Sullivan.

“MTN has been deploying infrastructure using previously acquired and newly acquired spectrum capacity. Our focus is to migrate customers onto 4G and 5G technologies through defined user migrations from legacy 2G and 3G technologies.”

Cell C acquired 10MHz in the 3 500MHz band for R288 million. According to Cell C, its current spectrum holding is sufficient to “pursue its stated objective to drive profitability and growth”.

Rain acquired two chunks of 10MHz spectrum in the 700MHz band, and 20MHz in the 2 600MHz spectrum band, for R1.4 billion.

“We have used the spectrum acquired in last year’s auction to continue to expand our 5G network and to launch a national 4G mobile network,” states Rain.

ICASA has yet to respond Telkom’s request to delay the next spectrum auction.

The telecoms regulator had not responded to ITWeb’s request for comment by the time of publication.