Telkom group executive for regulatory affairs Siyabonga Mahlangu says ICASA’s approach to the upcoming high-demand spectrum audit is problematic.
Speaking with the Sunday Times, Mahlangu said ICASA is slicing up the 3.5GHz spectrum “like salami” between all interested parties.
He also noted that while an operator requires a block of between 80MHz and 100MHz to deliver a viable 5G solution, there is only going to be 116MHz of this spectrum available across all parties.
Mahlangu added that the complex way in which ICASA has structured the auction will likely result in telecommunications companies paying a premium for these resources.
Both Telkom and MTN have taken legal action against ICASA for the way it is handling the spectrum auction – which ICASA chairperson Keabetswe Modimoeng has dismissed.
“This latest litigation attempt is characteristic of either impatience or a subtle desire to channel the authority’s decision-making outlook. We remain steadfast and will defend the process against these challenges,” said Modimoeng.
Telkom and MTN’s complaints
MyBroadband recently reported on Telkom’s legal challenge against ICASA’s spectrum auction process.
The two major complaints of Telkom are:
- Several important spectrum bands in the 700MHz and 800MHz regions are not commercially viable as they are still in use by broadcasters. Telkom wants assurances from the High Court that government will be forced to migrate broadcasters out of those bands, as it will have no incentive to do so once it has the money from the auction in its pocket.
- ICASA went ahead with its Invitation to Apply for the high-demand spectrum without first finishing its Mobile Broadband Service Market Inquiry. Telkom contends that this is unlawful and irrational. The root of this argument is that Telkom does not believe ICASA is doing enough to break the dominance of Vodacom and MTN in the market.
Meanwhile, MTN’s has also legally challenged two of ICASA’s decisions:
- The decision to classify the six applicants as Tier 1 and Tier 2
- The decision to exclude Tier 1 applicants from the opt-in round spectrum auction.
MTN and Vodacom are the only Tier 1 operators, and this means that they will not be able to participate in a portion of the spectrum auction that includes the highly desirable 3,5000MHz band – which is optimal for 5G use.
ICASA’s curious mistake
A curious blunder by ICASA has also resulted in legal challenges from MTN.
The applicant tiers are officially structured as follows:
- Tier-1 – Vodacom and MTN
- Tier-2 – Telkom, Cell C, Rain, and Liquid Telecom
However, what is almost certainly an error in ICASA’s wording means that Tier-2 members do not adhere to the definition of their group.
ICASA’s ITA defined Tier-1 and Tier-2 operators as follows:
- Tier-1 operator – A Wholesale National Operator that has a retail market share in excess of 45% in more than 10 municipalities.
- Tier-2 operator – A Wholesale National Operator that has a retail market share below 45% in less than 10 municipalities.
However, all of the members of Tier-2 have retail market share below 45% in more than 10 municipalities.
ICASA presumably intended the definition for Tier-2 operators to be:
- A Wholesale National Operator that has a retail market share above 45% in less than 10 municipalities.
This would then include all of the current members of Tier 2.
MTN’s legal challenge therefore includes the fact that these definitions are “vague, arbitrary, and unreasonable.”