Long-awaited spectrum auction to take place in March

18th September 2020

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

     

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The Independent Communications Authority of South Africa (Icasa) plans to auction the long-awaited high-demand spectrum in March next year.

Excluding the emergency spectrum issued early this year, this will be the first time in ten years that telecommunications companies will gain access to the in-demand spectrum required to deploy next-generation technologies.

The invitations to apply (ITAs) for both the Wireless Open Access Network (WOAN) and the International Mobile Telecommunications (IMT) spectrum will be issued by September 30.

The auction of the high-demand spectrum, which was originally going to take place during December 2020, will now be completed by no later than March 31, 2021.

As Icasa finalises the ITAs, the impact of the Covid-19 pandemic on the market will also be taken into account.

The delay in issuing the ITAs was attributed to the prioritisation of the release of Covid-19 emergency spectrum and the additional considerations, particularly regarding the viability of the WOAN.

In April, Icasa assigned temporary radio frequency spectrum in the 700 MHz, 800 MHz, 2 300 MHz, 2 600 MHz and 3 500 MHz bands to 17 qualifying operators to unlock connectivity for all during South Africa’s National State of Disaster period.

Icasa will also publish a reasons document capturing the authority’s position on the received responses for the information memorandum issued earlier, after considering and analysing the more than 40 representations received.

In November, Icasa released the memorandum to obtain comments from stakeholders and operators on the several options proposed for the licensing process for the 700 MHz, 800 MHz, 2 300 MHz, 2 600 MHz and 3 500 MHz IMT bands.

According to the memorandum, the spectrum available for assignment includes 2 × 30 MHz in the 700 MHz band; 2 × 30 MHz in the 800 MHz band; and 170 MHz in the 2 600 MHz band.

Also available to be licensed is 40 MHz in the 2 300 MHz band and 116 MHz in the 3 500 MHz band.

The key considerations emanating from the representations into the information memorandum include the development of various empowerment obligations to be imposed on the successful bidders in the auction process, including a requirement to support mobile virtual network operators; a requirement for successful bidders to support the WOAN through procurement of a minimum of 30% national capacity; and the imposition of empowerment obligations on the WOAN to ensure that it is a credible empowerment tool that will assist the authority to achieve the sector’s transformation agenda.

Consideration was also given to the structuring and framing of the lots in a manner that helps the authority achieve the objective to promote effective competition, facilitate new entrants and raise revenue for the fiscus.

“Icasa has also completed a process to determine the fair economic value of the five spectrum bands that will be made available for auction and spectrum that will be made available to the WOAN, taking into consideration the current state of competition in the South African market,” says Icasa chairperson Dr Keabetswe Modimoeng.

This is one of the most critical and potentially contentious regulatory processes ever undertaken by Icasa, with immeasurable economic value for South Africa.

“The delicate nature of the licensing process requires that the authority exercise added caution to ensure full compliance with all administrative and procedural fairness requirements. “It is also of significance that the ultimate outcome of the process receives buy-in and support from all interested stakeholders,” Modimoeng concludes.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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