South Africa’s third largest mobile network, Cell C, has expressed its concern over having to fork out at least R3bn to bid for radio frequency spectrum.

The Independent Communications Authority of South Africa (Icasa) on Friday invited applicants to apply for spectrum licences in the 700 MHz, 800 MHz and 2.6 GHz range.

The move comes as mobile networks such as Vodacom have called for more frequencies as they have resorted to refarming spectrum to provide limited LTE coverage in the country.

An applicant will qualify to only bid on one of the spectrum lots which range from ‘lot B’ to ‘lot E’.

The reserve price or minimum starting cost of the lots is also R3-billionn while the auction for the licences is expected to start on January 17, 2017, and end on January 30, 2017.

But Cell C has questioned the timelines and reserve price for the auction.

“On an initial reading the time-table seems quite rushed and the reserve price for the spectrum lots appears high especially as the spectrum lots are not equally valuable,” said Cell C’s chief legal officer, Graham Mackinnon, in an emailed statement to Fin24.

Icasa further said that “a licence is valid for 15 years from the date of issue” and that it is “renewable on an annual basis upon payment of the prescribed annual licence fee”.

The main aim of the licensing is to ensure nationwide broadband access for all citizens by 2020, said Icasa.

But Cell C’s Mackinnon said that Icasa may be at odds with the Department of Telecommunications and Postal Services regarding the auction.

“It is an interesting development but we are concerned that Icasa has issued the ITA (Invitation to Apply) without a clear policy directive from government,” said Mackinnon.

“We know for a fact that the Department of Telecommunications and Postal Services is in the process of finalising its policy in this regard and so by issuing the ITA before this is finalised, may create unnecessary tension.

“We are still studying the ITA to assess its terms and will apply if the terms are fair,” Mackinnon added.

Cell C, though, has still cautiously welcomed the spectrum auction but called for government buy-in as well.

“Operators cannot effectively roll out next generation technologies without this spectrum,” said Mackinnon.

“However, it needs to be done with the buy-in of all stakeholders, obviously including government as spectrum is a national resource,” Mackinnon added.

Cell C is South Africa's third largest mobile network with approximately 24 million customers.