MTN launches legal action to fight spectrum auction issues
MTN has filed an application in the Gauteng High Court to declare unlawful, and to review, correct, or set aside two decisions made by ICASA which relate to the spectrum auction process.
The decisions which MTN are challenging are to classify the six applicants as Tier 1 and Tier 2, and to then exclude Tier 1 applicants from a part of the spectrum auction.
MTN said in its founding affidavit that it tried to address the problems with ICASA, but without success. This is what resulted in the legal challenge.
It does not want to delay the spectrum auction. Instead, its preference would be to have the auction proceed as scheduled, but without the operator classification and opt-in scheme.
MTN’s founding affidavit lists the Independent Communications Authority of South Africa (ICASA), Minister of Communications Stella Ndabeni-Abrahams, and the other spectrum applicants as respondents.
MTN is challenging ICASA’s decision to implement an auction structure that creates two categories of mobile operators – Tier 1 and Tier 2 – and then use these categories to exclude Tier 1 operators from an opt-in auction round.
MTN and Vodacom are the only operators classified as Tier 1, which means they will not be allowed to participate in the opt-in round for spectrum portfolios 1 and 2.
The sought-after 3,500MHz band, which is optimal for 5G use, is included in the portfolios that are available during the opt-in round.
What this means, in simple terms, is that Tier 2 operators – Telkom, Cell C, Rain, and Liquid Telecom – can take up all the valuable 5G spectrum.
This can leave Vodacom and MTN without access to 3,500MHz spectrum, although they are best positioned to roll out 5G networks in South Africa.
MTN argued it is not possible for it to remain a competitive operator without access to the spectrum that will enable the roll-out of 5G technology.
In its affidavit, MTN challenged the definitions that have been used to differentiate a Tier 1 operator from a Tier 2 operator. It argues the definitions are impermissibly vague, arbitrary, and unreasonable.
MTN highlighted that it was also not given notice that ICASA intended to categorise it as a Tier 1 operator, and was not afforded an opportunity to make representations around this issue.
Through its legal action, MTN wants ICASA to remove its Tier 1 and 2 categorisation and the opt-in round from the auction process.
MTN is therefore asking for a simple ITA process where all operators are treated equally and have equal access to spectrum.
If the relief sought by MTN were to be granted, the ITA process could continue but without the opt-in round.
ICASA Spectrum ITA
For easy reference, we embedded the ICASA’s Invitation to Apply (ITA) notice published on 2 October 2020 below.
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