Here are the rules for South Africa’s multi-billion-rand spectrum auction

ICASA has published the Invitation to Apply (ITA) for mobile networks wanting to bid for 4G and 5G spectrum.

This document outlines the process for the spectrum auction, including the obligations placed upon mobile operators that have been assigned spectrum as a part of this auction.

The closing date for applications is 15 January 2021, ICASA said.

Spectrum is the medium through which data is transmitted, and is critical to ensuring that South Africans get high-speed and reliable 4G and 5G Internet access.

“We believe that the release of spectrum will contribute to the reduction of the cost to communicate,” said MTN last year.

“One of the benefits of a permanent allocation of spectrum will be aggressive infrastructure spending in building networks which will bring some relief to certain sections of the economy,” agreed Rain.

ICASA chairperson Dr Keabetswe Modimoeng said that the licensing of the spectrum will bring major economic benefits to South Africa.

“We have all been waiting for this day and through consultation with all relevant stakeholders, guided by the empowering legislation including the law of administrative justice and procedural fairness, the ICASA Council has taken a decision and approved that the licensing process for spectrum can now go-ahead,” said ICASA.

ICASA has also confirmed that it is working to amend the COVID-19 National State of Disaster Regulations in order to extend the validity of emergency temporary spectrum until 31 March 2021.

The available spectrum

ICASA will make 406 MHz of spectrum available for the provision of mobile broadband services in South Africa.

This spectrum will span the 700MHz, 800MHz, 2,600MHz, and 3,500MHz frequencies, and will be available in the following lot sizes and quantities, and at the following reserve prices:

Spectrum lots for auction
Lot numbers Lot category Lot size Number of lots available Reserve price per lot
1-4 700MHz 2 x 5MHz 4 R526,615,392.49
5-8 800MHz 2 x 5MHz 4 R752,307,703.55
9 800MHz 2 x 10MHz 1 R1,155,174,976.66
10-24 2600MHz 1 x 10MHz 14 R97,843,320.52
25 3500MHz 1 x 2MHz 1 R9,818,987.30
26-33 3500MHz 1 x 10MHz 8 R75,606,202.22
34 3500MHz 1 x 4MHz 1 R19,637,974.60

ICASA noted that the auctioning of the 2300MHz band has been placed on hold because it still needs to conduct a feasibility study on this frequency.

The authority announced that a number of obligations will form part of the licence conditions of the Radio Frequency Spectrum License.

A number of these are listed below.

Throughput obligations

  • A minimum downlink single-user throughput of 5Mbps at the edge of the cell (particularly in Batch 3 classified municipalities) for all national wholesalers who are awarded radio frequency spectrum licenses on spectrum band(s) IMT700 and/or IMT800 within five (5) years of licence issue. This obligation must be achieved with other bands (i.e. IMT2600, and IMT3500) assigned through this licensing process.

Coverage obligations (700MHz or 800MHz)

  • One 2x10MHz (on IMT800) Coverage Lot carries a coverage obligation of up to 99.8% of the population within 5 years of issue of radiofrequency spectrum licence; and at least to 95% across the totality of all Batch 2 and Batch 3 underserviced areas/municipalities in South Africa. The winner of this coverage lot would comply by an outside-in approach to achieve 95% of all Batch 2 and Batch 3 underserviced areas first of all 234 local and metropolitan municipalities in South Africa within 5 years of issuance of the licence;
  • Any other tier-1 player who wins ANY further sub-1GHz spectrum would be obliged to expand coverage to at least 97% of the population. Also, the outside-in approach applies, to achieve 92% across all Batch 2 and Batch 3 underserviced areas first for the 2x10MHz Coverage Lot across all 234 local and metropolitan municipalities in South Africa within 5 years of issuance of the licence; and
  • Outside-In: First build broadband coverage in the first batch of least covered of “underserviced areas” and/or municipalities (Batch 2 and 3 Municipalities), before proceeding to roll out finally to major cities and towns of South Africa (Batch 1)
  • In respect of 700MHz or 800MHz licenses awarded to applicants categorised as Tier-2: applicants that cover less than 80% of the population with IMT services must expand such coverage to at least 80% of the population in general across South Africa, including Batch 1 and Batch 2 areas (of their commercial choice) for Tier-2 national wholesalers other than applicants categorised as Tier – 1. This obligation does not apply to sub-national wholesalers who do not opt-in for reserved spectrum described in section 6.1. The outside-in obligation would not apply to these Tier-2 national wholesalers, that are those that do not already cover 95% or more of the population with IMT services in January 2020.

Open-access obligations

  • Prospective applicants that have categorised as Tier-1 (mobile operators with a market share of more than 45% in 10 municipalities) must:
    • Produce a reference offer for site access to be offered to any licensee requesting site access and guidelines, including pricing, timeframes and policies for reserving space on masts.
    • The reference offer set out by the applicant in terms of paragraph shall become licence conditions for licences to two tier-1 operators issued in this auction process.
  • A Licensee assigned spectrum through this process is required to provide open access to MVNOs which must have 51% ownership held by persons from Historically Disadvantaged Groups. This provision shall become licence conditions for licences issued in this auction process. The Licensee assigned spectrum through this process shall be required to submit to the Authority within a period of between 3 – 6 months the business plans to ensure that the MVNOs are sustainable for the period of 3 years.
  • These interventions balance the objectives in the ECA to promote competition within the ICT sector (section 2(f) of the ECA) while at the same time meeting the objects to refrain from undue interference in the commercial activities of licensees while taking into account the electronic communication needs of the public (section 2(y) of the ECA) and promote stability in the ICT sector (section 2(z) of the ECA).

WOAN obligations

  • The applicants that are to be assigned the radio frequency spectrum through this process shall procure a minimum of 30% national capacity from the WOAN collectively as soon as the WOAN is operational for a period of five years.
  • The 30% national capacity to be procured from the WOAN will be shared proportionally to the amount of the spectrum acquired from the Auction amongst the successful licensees.
  • The 30% national capacity uptake in the WOAN will be imposed on all successful applicants as licence terms and conditions in accordance with regulation 7(e) of the Radio Frequency Spectrum Regulations, 2015 as amended.

Social obligations

  • A Licensee assigned spectrum through this process shall zero-rate all the mobile content provided by Public Benefit Organisations including websites.

The full spectrum ITA is embedded below:

Now read: ICASA reveals prices and dates for 4G and 5G spectrum auction

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Here are the rules for South Africa’s multi-billion-rand spectrum auction