ICASA sets deadline for outstanding spectrum fees

Simnikiwe Mzekandaba
By Simnikiwe Mzekandaba, IT in government editor
Johannesburg, 02 Oct 2023
ICASA sets a deadline to ensure all auctioned spectrum fees are paid and received by the fiscus.
ICASA sets a deadline to ensure all auctioned spectrum fees are paid and received by the fiscus.

The Independent Communications Authority of South Africa (ICASA) has given mobile operators until the end of this month to settle outstanding fees from last year’s spectrum auction.

This information came to light last week during the telecoms regulator’sbriefing to the National Council of Provinces (NCOP) public enterprises and communication committee.

The presentation made by ICASA councillor Peter Zimri detailed the impact of last year’s high-demand spectrum auction on competition and lowering the cost to communicate.

In March 2022, ICASA concluded the auction of the International Mobile Telecommunications spectrum – also known as high-demand radio frequency spectrum. The regulator indicated the auction process beat financial projections, raising R14.4 billion for the national fiscus.

ICASA received spectrum applications from six mobile players: Cell C, Liquid Intelligent Technologies, MTN, Rain Networks, Telkom and Vodacom.

Noting issues around payment of auction fees, Zimri told NCOP members that operators paid the initial amount of the fees. However, some payments are still outstanding.

The councillor did not divulge which telcos still had outstanding amounts and how much of that still needed to be paid.

“We have set a deadline for this payment, since we’ve cleared the sub-1GHz bands. There are some sporadic assignments that we believe is interference and we are treating that as interference…they have to pay the outstanding fees by the end of October,” he stated.

According to Zimri, ICASA issued the licences to the successful bidders by 10 May 2022, and that was based on the committed auction fee payment. “For the 700-800MHz (sub-1GHz) bands, it was a proportionate payment due to the availability of the broadcasting spectrum at the time.”

Speaking ahead of Zimri’s presentation, communications and digital technologies deputy minister Philly Mapulane said the department was happy the national fiscus benefited from the auction proceeds, also noting that fees were still being collected.

“This is because there was a point where not all the available spectrum that we auctioned was made available to the mobile network operators. As of 31 July, we successfully migrated all the broadcasters from any band above 694MHz, so all the available lots of spectrum that were auctioned last year are now available to the telcos.

“We entered into a two-stage agreement with the broadcasters. [The first phase] has been achieved, but there are other areas where there is still analogue broadcasting. Not many transmission sites are transmitting analogue broadcasting and this is going to be done until the end of December next year.

“The entire spectrum that was auctioned is available and we expect ICASA, as the authority, will facilitate all of that which has been auctioned is paid for and the fiscus receives that amount.”

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)

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.

Unlike its African counterparts, South Africa was one of the few countries that had not allocated 4G/LTE spectrum on the continent. This forced local operators to improvise with spectrum re-farming and carrier aggregation.

The allocation of high-demand spectrum by means of an auction was key among the South African government’s economic structural reforms, as the state looks to boost the fiscus.

At the time of publication, ICASA had not responded to ITWeb’s queries as to which mobile operators had outstanding payments on their spectrum bills.

However, in its interim financial results for the six-month period ended 30 June, the MTN Group revealed its South African business participated in the ICASA auction and acquired 100MHz of spectrum for a purchase consideration of R5.2 billion.

“MTN settled R3.3 billion of the spectrum acquisition costs in FY 2022. The balance of R1.9 billion is payable to ICASA once the IMT800 [800MHz] spectrum is fully available for national deployment.

“Subject to this availability, it is anticipated that payment of the remaining R1.9 billion will be made in H2 2023. This will enable MTN to achieve broader spectrum deployment across South Africa,” it stated.

Meanwhile, yesterday, Business Times reported that Cell C, which acquired spectrum in the 3.5GHz bands for R288 million, still owes the telecoms regulator.

Cell C had not responded to ITWeb’s questions at the time of publication.