Big Cell C spectrum question
Cell C’s 45% owner Blue Label Telecoms has declined to reveal where the money would come from for the cellular operator to buy additional radio frequency spectrum this week.
Spectrum is the raw network capacity operators use to communicate between their towers and mobile devices.
The Independent Communications Authority of South Africa (Icasa) is scheduled to begin the main stage of its spectrum auction on Thursday, 10 March 2022.
With spectrum suited for cellular networks in such high demand, regulators worldwide use auctions to decide how frequencies should be assigned to operators.
In South Africa, six networks signed up and qualified for Icasa’s auction: Cell C, Liquid Intelligent Technologies, MTN, Rain, Telkom, and Vodacom.
At a minimum, the auction is expected to raise R8 billion for South Africa’s fiscus.
Considering that the auction is likely to be expensive, this raises the question — how will Cell C pay for the spectrum, given that it has reported billions in losses nearly every year.
Blue Label joint CEO Brett Levy has assured that money would be available for Cell C to bid on the auction.
“Spectrum itself has tremendous value inside any network,” Levy stated.
“Where that money [to bid in the auction] comes from is too early for me to get into… But we are absolutely part of the auction and expecting to get our slice of the pie.”
Secret spectrum deal
MyBroadband previously reported on industry speculation that Vodacom may fund Cell C’s bid for spectrum during the auction.
Such a commitment from Vodacom would benefit both operators.
It would also put Vodacom in an excellent position to benefit from the new spectrum auction.
Vodacom already has managed network services and roaming agreements with Telkom, Rain, and Liquid Telecom. Adding Cell C to this list means it will have agreements with all the new spectrum applicants, except for MTN.
Its partnership with Rain provides a blueprint of how Vodacom can integrate Cell C’s new spectrum into its network without regulatory problems.
If Vodacom and Cell C did indeed strike a deal involving Cell C’s spectrum, they would need to keep it secret to avoid potential repercussions related to Icasa’s rules.
Court battle looms
Icasa has elected to forge ahead with its spectrum auction despite legal action from Telkom calling for the whole process to be declared invalid.
Telkom’s concerns are manifold, but one of the most significant is that analogue TV broadcasts still occupy some of the spectrum being auctioned.
Communications minister Khumbudzo Nthsavheni recently declared that South Africa would finish its migration to digital terrestrial television and switch off its analogue TV signals on 31 March 2022.
Human settlements minister Mmamoloko Kubayi has accused the partially state-owned Telkom of holding South Africa to ransom.
The Acting Judge President set the dates of the High Court showdown between Telkom and Icasa over the auction for 11–14 April 2022.
If Telkom wins, it will result in Icasa being forced back to the drawing board.
Ellipsis Regulatory Solutions founder Dominic Cull said this would delay the release of additional spectrum by at least 15–18 months.
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