Telkom launches legal strike against spectrum auction

Telkom has filed High Court papers to block the Independent Communication Authority of South Africa (Icasa) from going through with an auction of sought-after radio frequency spectrum.

Spectrum is the lifeblood of wireless networks. Cellular network operators need radio frequencies for communication between mobile devices and their towers.

Telkom has criticised Icasa’s approach to licensing the spectrum, saying that the regulator has not corrected many of the issues from its previous attempt.

According to Telkom regulatory affairs head Siyabonga Mahlangu, there are several problems with Icasa’s latest attempt to licence high-demand spectrum:

  1. Crucial analogue TV spectrum is still unavailable; eMedia’s pending court case against the Minister of Communications and Icasa about this will only be heard in mid-March
  2. Spectrum caps
  3. Not considering the competitive landscape
  4. Delay of the national wireless open-access network (WOAN)

One of Telkom’s primary concerns is that E-tv has refused to migrate away from old analogue terrestrial TV technology by March 2022.

E-tv is sitting on spectrum that Telkom desperately wants.

This is because MTN, Vodacom, and Cell C all have an assignment of frequencies below 1 gigahertz (GHz), while Telkom does not.

Sub-1GHz spectrum lets cellular towers cover a wider area and offers better indoor penetration.

In dense urban areas, sub-1GHz must be combined with higher frequency spectrum to build network capacity.

However, without access to sub-1GHz, Telkom says it is at a disadvantage compared to its competitors, especially when trying to provide rural coverage.

Khumbudzo Ntshavheni
Khumbudzo Ntshavheni

To free up the highly desirable sub-1GHz spectrum, communications minister Khumbudzo Ntshavheni aims to switch off the SABC’s analogue TV transmitters by the end of January 2021.

However, E-tv owner eMedia has taken the minister and Icasa to court to delay the migration of its analogue TV broadcasts to a new digital standard.

eMedia contends that the minister is rushing the analogue switch-off, which will leave many poorer South Africans without the ability to watch television.

This will result in a sudden drop in viewership for E-tv, hurting its bottom line.

However, Ntshavheni said she isn’t rushing to meet a new deadline but to catch up on the many deadlines South Africa has already missed.

“I don’t have a new date for [analogue] switch-off; I have a catch-up date,” she said.

Icasa has scheduled the spectrum auction for 8 March 2022, but the hearing for eMedia’s case against the minister and regulator is set for 14–15 March.

“It’s causing anxiety,” Telkom regulatory affairs head Siyabonga Mahlangu told MyBroadband.

With the sub-1GHz question unresolved, Mahlangu said it means going into the spectrum auction with a lot of uncertainty.

Rather than simply including the spectrum E-tv still occupies in the auction, Mahlangu said that Icasa should have consulted stakeholders.

From left to right: Vodacom, MTN, Cell C, Telkom, and Rain logos shown on phones with similar colours to their brand marks

Another Telkom concern is Icasa’s use of spectrum caps for the auction.

Mahlangu explained that Icasa has decided that the South African market can sustain five infrastructure players — four individual network operators and the WOAN.

Based on this, each operator may only control 20% of the assigned spectrum, with Icasa setting an overall cap of 187 megahertz (MHz) for the March auction.

Mahlangu said that Icasa’s mistake is that it assumes spectrum in the hands of each player has the same value, and has the same impact on the market.

Vodacom and MTN dominate South Africa’s cellular market, and Mahlangu said that Icasa’s spectrum caps would not foster stronger competition.

He said Icasa should have consulted the Competition Commission as a regulatory peer to ensure the spectrum auction promotes competition.

In essence, Telkom would like to see smaller operators given preferential treatment and be allowed to have more spectrum than Vodacom and MTN.

Mahlangu also highlighted a challenge in the hotly contested 3.5GHz band earmarked for 5G services.

He explained that, according to the International Telecommunication Union, operators need large chunks of spectrum—80MHz to 100MHz—to offer proper 5G services.

With these technical considerations in mind, only two operators could receive spectrum in this band.

In addition to these issues, Telkom has also slammed the decision to licence the WOAN separately from this spectrum auction.

Mahlangu explained that by removing the WOAN from the auction, Icasa has severely complicated the mathematical models operators use to inform their bidding.

This creates concerns that they will overbid on the spectrum, he said.

Shameel Joosub
Shameel Joosub, Vodacom CEO

Icasa was set to hold a spectrum auction in March last year, but the process was delayed by legal action brought by Telkom, MTN, and E-tv owner eMedia.

Telkom had raised similar concerns that TV broadcasters still occupied the sub-1GHz spectrum because of South Africa’s slow digital migration process.

Vodacom CEO Shameel Joosub has previously criticised Telkom’s repeated legal challenges of the spectrum auction.

“They’ve been successfully delaying the allocation of spectrum for years,” said Joosub.

He said Telkom does not want Vodacom and MTN to get more spectrum because it wants to maintain its competitive advantage.

Not only does Telkom have more spectrum than its competitors—albeit none under 1GHz—it also has the most extensive fibre network in South Africa.

Now read: Concerning trend in mobile data prices in South Africa

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Telkom launches legal strike against spectrum auction