Spectrum auction winners announced — Vodacom and MTN to spend R5 billion each

The Independent Communications Authority of South Africa (Icasa) has announced the conclusion of the much-anticipated high-demand radio frequency spectrum auction.

The auction involved six qualified bidders: Cell C, Liquid Intelligent Technologies, MTN, Rain Networks, Telkom, and Vodacom.

Between the six operators, they bid just less than R14.5 billion to acquire sough-after cellular network capacity to help build out their 4G and 5G networks.

If collected, the money will go to the national fiscus.

Icasa reported that the main auction stage, which ran from 10 to 17 March, comprised 58 rounds of bidding.

There was one unsold spectrum lot of 2x10MHz in the IMT800 Band. Icasa will license this spectrum in future.

“The next stage in the auction process will be the assignment round, which is purely an administrative process and will be held on Tuesday, 22 March 2022, to determine the actual spectrum ranges to be assigned for all the lots bought in the various bands,” Icasa stated.

“This was our inaugural radio frequency spectrum auction, and we are really grateful to have reached this stage without any hassles and challenges from the first day of the actual auction to date,” said Icasa chairperson Dr Keabetswe Modimoeng.

“This shows South Africa’s capability as an investment-friendly destination.”

Modimoeng also thanked the Icasa staff involved for their stamina and commitment to ensuring that the spectrum licensing process was completed successfully.

“This auction was indeed in the best interest of all South Africans, as will be the subsequent licensing interventions post government’s revision of the Wireless Open Access Network (WOAN) Policy,” Modimoeng stated.

Keabetswe Modimoeng, ICASA Executive Chair

MTN said that the R5.2 billion price it bid compares favourably with global benchmark averages of approximately $0.083MHz-POP – according to Coleago Consulting – for spectrum in similar auctions.

“This is the first time in approximately 17 years that spectrum has been released on a permanent basis in South Africa and increases MTN SA’s total permanent spectrum holdings from 76MHz to 176MHz,” the mobile network operator stated.

“The spectrum has been allotted for a 20-year period and on a technology-neutral basis.”

MTN SA said it would use the spectrum to enhance 4G and 5G connectivity and the capacity of its network, while also expanding rural, peri-urban, and urban network coverage.

Vodacom CEO Shameel Joosub also promised to extend their 4G and 5G network coverage to more parts of the country and improve quality of service, while addressing the cost to communicate.

“Although the outcome of the spectrum auction pricing was high, Vodacom is pleased with the outcome of the auction, which is a win for all of our customers who can in the coming years benefit from even wider coverage, faster speeds and enhanced network quality,” Joosub said.

“The licensing of new spectrum in South Africa is also expected to accelerate post-pandemic economic recovery and fast track digital inclusion.”

Vodacom said the amount it bid would become payable 30 working days after Icasa awards their spectrum.

Opt-In Auction results

Totals per operator

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