R5.8bn in outstanding spectrum fees due to ICASA

Simnikiwe Mzekandaba
By Simnikiwe Mzekandaba, IT in government editor
Johannesburg, 09 Oct 2023
R5.8 billion is owed to ICASA after last year’s spectrum auction.
R5.8 billion is owed to ICASA after last year’s spectrum auction.

A total of R5.8 billion still needs to be paid to the Independent Communications Authority of South Africa (ICASA), following last year’s “historic” spectrum auction process.

This is according to ICASA, responding to ITWeb’s questions on how much is still outstanding from mobile network operators (MNOs) that acquired spectrum.

ICASA wouldn’t go into specifics as to which operators still need to pay up, but says the outstanding amount following the spectrum auction is R5 837 303 129.44.

The telecoms regulator also declined to provide a breakdown of the unpaid spectrum bills in relation to each telco, saying it cannot do so due to confidentiality.

Last week, ITWeb reported that funds from the 2022 spectrum auction were still due, with ICASA giving MNOs until the end of October to settle the outstanding fees.

The payment deadline is for successful bidders of the 700-800MHz (sub-1GHz) bands, for which payment was deferred until availability of the broadcasting spectrum, occupied by the analogue TV signals.

ITWeb understands the reason a date could not be set earlier was contingent on two things: the communications minister setting the date for the analogue switch-off (ASO), and ICASA verifying that all broadcast licensees had indeed complied with the instruction to clear the bands.

Government decided on a two-step ASO approach, putting forward 31 July as the date for switching off all analogue broadcasting services above 694MHz, with 31 December 2024 as the end of the dual-illumination period and switch-off of the remaining analogue services below 694MHz.

Since the sub-1GHz bands have been cleared, ICASA councillor Peter Zimri revealed that a deadline for full payment has now been set.

Says ICASA: “The minister of communications and digital technologies, after consultation with the relevant stakeholders, has determined that all analogue TV broadcasting transmitters be migrated to below the 694MHz (470MHz – 694MHz) band by 31 July 2023 and all analogue services be switched-off by 31 December 2024.

“ICASA has been migrating licensees from the frequency bands above 694MHz to below 694MHz to clear the bands. The mobile network operators that were awarded IMT spectrum during the auction paid the amounts proportional to the available spectrum in the 700MHz and 800MHz frequency bands, while the broadcasting services were being cleared.

“There are some residual digital terrestrial television assignments currently being returned to below the frequency band 694MHz, in order to clear the 700MHz and 800MHz frequency band and avail it for the deployment of IMT systems.”

In March 2022, ICASA concluded the auction of the International Mobile Telecommunications (IMT) 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.

Cell C and Liquid Intelligentacquired spectrum in the 3.5GHz and 2.6GHz bands, respectively.

The mobile operators that acquired 700MHz and 800MHz spectrum were MTN, Rain, Telkom and Vodacom. At the time, the regulator revealed that Rain will fork out R1.15 billion for two chunks of 10MHz spectrum in the 700MHz band, while the litigious Telkom will pay R1.5 billion for two chunks of 10MHz spectrum in the 800MHz band.

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.

ITWeb further understands the licensees will now be required to make their final payment to ICASA, and thus to National Treasury.

“As previously reported, ICASA raised over R14 billion during the spectrum auction, the revenue received and transferred and paid to the National Revenue fund is governed by section 15(3) of the Independent Communications Authority of South Africa Act No 13 of 2000,” says the regulator.