The Independent Communications Authority of South Africa (ICASA) has announced that it will publish the long-awaited Invitation to Apply for high demand spectrum no later than 30 September 2020.
Since the spectrum is expected to be hotly contested, it is expected that an auction will be used to determine how the spectrum is ultimately assigned. ICASA has said that the auction will be completed no later than 31 March 2021.
ICASA also stated that it will issue two Invitations to Apply (ITA) at the same time: one for the wholesale open-access network (WOAN), and another for spectrum that will be assigned directly to individual network operators like Vodacom, MTN, Telkom, Rain, Liquid Telecom, and Cell C.
Mobile networks operators have pleaded with the government and the regulator to release additional spectrum suitable for 4G and 5G networks.
Vodacom and MTN have stated that the release of additional spectrum will allow a reduction in prices, and improved coverage for high speed mobile broadband networks in South Africa.
ICASA’s original stated goal was to launch the spectrum application process earlier in the year so that it could ensure that the spectrum was assigned by the end of 2020.
However, several issues resulted in the process being delayed.
“The delay was occasioned by, among others; the prioritisation of the release of the COVID-19 emergency spectrum, the additional considerations particularly on the viability of the WOAN as
well as the fact that Council was almost inquorate for a period close to three months,” ICASA stated.
“The publication of the two ITAs shows the Authority’s commitment to its plans of releasing spectrum in the 2020/21 Financial Year. In light of the time lost as a result of the delay in the issuing of the ITAs, the auction of the high demand spectrum which was originally contemplated to take place during December 2020, will be completed by no later than 31 March 2021.
ICASA said it considered the following inputs from stakeholders in developing the ITAs:
- 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.
- The requirement for successful bidders to support the WOAN through procurement of a minimum 30% national capacity.
- The imposition of empowerment obligations on the WOAN in order to ensure that it is a credible empowerment tool that will assist ICASA to achieve the sector’s transformation agenda.
- The structuring and framing of the [spectrum] lots in a manner that balances 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,” said ICASA chairperson Keabetswe Modimoeng.
Modimoeng stated that this is one of the most critical and potentially contentious regulatory processes ever undertaken by ICASA with immeasurable economic value for the country.
“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 the buy-in and support from all
interested stakeholders,” Modimoeng said
“We appeal to stakeholders to adhere to the aforementioned deadline in order to avoid any further delays to the process.”
Along with its announcement of the date of publication for the ITAs, ICASA invited representations from stakeholders on the impact of the COVID-19 pandemic on the market and any specific factors emanating therefrom, which Council should take into account in finalising the ITAs. This feedback must reach ICASA by close of business on 16 September 2020.