Win for spectrum trading in South Africa

Communications Minister Mondli Gungubele published the Next-Generation Radio Frequency Policy for Economic Development, establishing a secondary market for spectrum sharing and trading.
The policy, published in the Government Gazette on Tuesday, aims to facilitate long-term public interest “in the use of spectrum as a finite resource.”
It was first introduced in 2022 and was only approved by President Cyril Ramaphosa’s Cabinet in November 2023.
When the Cabinet approved it, one stated goal of the policy was to end a spectrum regime that only benefits larger industry players.
It said that small and medium-sized enterprises (SMMEs) must be promoted and given a more level playing field when accessing the spectrum.
A secondary market will facilitate this by allowing SMMEs to enter spectrum-sharing and sub-letting agreements with more prominent industry players.
An example of why this is necessary is the spectrum auction that took place in March 2022.
It saw South Africa’s top six mobile operators spend over R14 billion to acquire highly sought-after radio frequency bands.
MTN and Vodacom spent over R5 billion each.
The policy will allow players like Vodacom and MTN that can afford to purchase spectrum to use the following market-based approaches to allow SMMEs access:
- spectrum trading
- spectrum sharing
- dynamic spectrum access use
- spectrum sub-letting and/or sharing
Any licensed spectrum will be done on a technology-neutral basis, meaning licensees can choose the technology they want to use to offer a specified service.
To regulate this market, the Independent Communications Authority of South Africa (Icasa) must set standard operating rules to prevent its misuse.
Icasa will need to work in tandem with the Competition Commission to ensure the acquisition of spectrum through the above means does not negatively influence competition.
The policy document states that “all transactions involving high demand spectrum must be investigated, irrespective of how the transactions are characterised.”
“[Icasa] must put in place a regulatory framework which clarifies spectrum trading rules between licensees and promotes approaches that prohibit monopolisation of spectrum, dominance, and anti-competitive behaviours in the market.”
Hoarding of spectrum that is not efficiently utilised will not be permitted.
The policy suggests that Icasa introduce a “use it or lose it” principle to regulate this.
Spectrum that has been unused for more than two years (24 months) will be subject to this principle.
It also emphasises Icasa’s responsibility to encourage the use of new technologies that allow for more efficient spectrum use and sharing.
Such technologies include those that limit the power to avoid interference to primary users and allow secondary usage of unused spectrum at a given time and location.
Clearer regulations governing spectrum sharing and new rules enabling spectrum trading could be a boon to the industry.
Vodacom recently launched legal action against Icasa over spectrum pooling agreements the regulator approved between its competitors.
According to Vodacom’s court papers, Icasa allowed MTN to pool spectrum belonging to Cell C and Liquid Intelligent Technologies with its own in 2022, giving it a substantial competitive advantage.
Vodacom argued that the deals are not permitted under South Africa’s current regulations, that the regulator granted the application unlawfully, and that the court should revoke them.