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Spectrum court case shelved amid settlement negotiations

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The Independent Communications Authority of SA (ICASA) says spectrum allocation negotiations have progressed and a compromise deal may be announced soon.

This was announced as the regulator provided an update on the Telkom spectrum case, which was due in court on Monday.

ICASA says the matter didn’t proceed as planned, as the parties opted for out of court discussions with the hope of striking a compromise deal.

Telkom scuppered ICASA’s plans to auction spectrum in March, when the telephony group interdicted the regulator in the North Gauteng High Court.

The company claimed the process was flawed and said the regulator must address its concerns before proceeding with the allocation. The court was due to hear ICASA’s appeal this week.

“The ongoing spectrum licensing settlement negotiations are at an advanced stage. The court case initially planned for Monday, 5 July 2021, did not take place to afford the settlement negotiations space to conclude. The authority will communicate once an agreement is reached and remains optimistic that the matter will be resolved in the next few weeks,” says ICASA spokesperson Paseka Maleka.

This development may be seen as a breakthrough for the telecoms sector, which has, for some time, been battling with ICASA over the allocation of these licences.

ICASA set the ball rolling for the spectrum auction in October last year, announcing the invitation to apply for the licensing of International Mobile Telecommunications spectrum, also known as high-demand spectrum, and that of the wholesale open access network.

Since this announcement, the regulator has faced multiple court challenges, with interested parties querying the proposed auction process.

MTN, Telkom and broadcaster Etv have lodged court applications challenging ICASA.

Telkom approached the courts first, on an urgent basis, saying it considers the regulator’s decisions to be irregular and unlawful. Telkom wanted ICASA to halt the whole process to allow broader discussion on its process.

According to Telkom, the first fundamental flaw made by ICASA is that the auction invitation to apply involves the auction of portions of spectrum in frequency bands that it argues are not immediately available for use on a national basis by a licensee that may ultimately succeed in its bid during the auction process.

Several weeks after the Telkom application, MTN followed suit and dragged ICASA to court again. MTN is challenging ICASA’s decision to implement an auction structure that creates two categories of mobile operators, namely Tier 1 and Tier 2, and the use of an opt-in auction round in which Tier 1 operators will not be allowed to participate.

MTN’s biggest worry is that of alleged ambiguities surrounding the Tier 1 and Tier 2 classification, which ultimately leads to the exclusion of Tier 1 operators from participating in the opt-in round for portfolios 1 and 2.

MTN and Vodacom are the only operators classified as Tier 1 operators.

This impasse solicited strong reaction from industry analysts, who said the parties must focus on the best outcome for the country and close all legal loopholes that may result in further delays to the process.

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