Cell C network and spectrum licence transfers delayed
The Independent Communications Authority of South Africa (Icasa) has postponed the deadlines for commenting on Cell C’s application to transfer control of its spectrum, network, and service licences to its biggest shareholder.
South Africa’s telecommunications industry regulator gave notice by Government Gazette last week that Cell C had applied to transfer control of its licences to The Prepaid Company (TPC), a subsidiary of Blue Label Telecoms.
According to the notice, Cell C applied to transfer control of its Individual Electronic Communications Service (I-ECS), Individual Electronic Communications Network Service (I-ECNS), and spectrum licences to TPC.
An I-ECNS licence permits companies to sell wholesale access to physical network infrastructure.
I-ECS licences let companies like Cell C sell telecommunications services directly to end-users.
The spectrum licences Cell C applied to be transferred are its 2100MHz, 900MHz, and 1800MHz assignments. This is all of Cell C’s premium raw wireless network capacity.
An analysis by Daily Investor earlier this year found that Cell C’s spectrum is worth between R3.8 billion and R6.2 billion.
By any measure, it is one of the company’s most valuable assets. For this reason, Cell C’s application to transfer control of its spectrum to TPC has raised questions.
Cell C explained that The Prepaid Company was increasing its non-controlling 49.5% shareholding to a majority stake of 53.5%, which triggers certain governance and regulatory requirements.
However, when MyBroadband asked Cell C for more details about which specific regulations require that it transfer control of its licences to TPC, the mobile operator simply referenced whole sections of the Electronic Communications Act.
“The regulations that guide the process are contained in Section 13 and Section 31 of the [Act],” Cell C told MyBroadband.
However, these sections contain no stipulations about licensees needing to transfer control of their I-ECNS, I-ECS, or spectrum licences to a majority shareholder.
Without clarity about the regulations in question or the implications of Cell C transferring control of its spectrum, industry speculation abounds.
Cell C has assured that even though it has applied to transfer control of its licences to The Prepaid Company, it will retain control of the spectrum itself.
“Cell C retains full control of its spectrum as part of its operating model and will continue to operate as a licensee providing mobile services to its customer base as a mobile network operator,” it stated.
“This application is a fulfilment of a governance process necessary in the regulatory framework, which will be publicly announced as soon as the Competition Commission and Icasa have approved the application for transfer of control of the business.”
Icasa’s new deadlines for stakeholder comment on Cell C’s application are as follows:
- Submission of written representations by interested parties — 22 January 2024
- Applicants’ responses to written submissions — 12 February 2024
- Public hearings — If necessary, based on written comments
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