{"id":561439,"date":"2024-09-20T14:06:37","date_gmt":"2024-09-20T12:06:37","guid":{"rendered":"https:\/\/mybroadband.co.za\/news\/?p=561439"},"modified":"2024-09-20T14:06:44","modified_gmt":"2024-09-20T12:06:44","slug":"cell-c-dragged-into-spectrum-war","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/telecoms\/561439-cell-c-dragged-into-spectrum-war.html","title":{"rendered":"Cell C dragged into spectrum war"},"content":{"rendered":"\n<p>Vodacom and Telkom have registered concerns about Cell C transferring control of its spectrum licences to Blue Label Telecoms due to the company&#8217;s spectrum pooling deals with MTN.<\/p>\n\n\n\n<p>A public hearing was held on 19 September to discuss Cell C&#8217;s application to transfer control of its network, service, and spectrum licences to its biggest shareholder, Blue Label subsidiary The Prepaid Company.<\/p>\n\n\n\n<p>Cell C filed the application because The Prepaid Company wishes to increase its shareholding in the mobile operator from under 49.5% to 63.2%.<\/p>\n\n\n\n<p>The application includes all of Cell C&#8217;s radio frequency spectrum in the 2100MHz, 1800MHz, and 900MHz bands.<\/p>\n\n\n\n<p>Spectrum is the lifeblood of any wireless network carrier. It is the raw bandwidth they use to communicate between their towers and customer devices like smartphones.<\/p>\n\n\n\n<p>In May this year, <a href=\"https:\/\/mybroadband.co.za\/news\/cellular\/538775-vodacom-drops-nuclear-bomb-in-cellular-cold-war.html\" data-type=\"post\" data-id=\"538775\">Vodacom launched legal action<\/a> against the Independent Communications Authority of South Africa (Icasa) after learning that the regulator had approved spectrum pooling agreements between MTN and several other players.<\/p>\n\n\n\n<p>According to the court papers, Icasa allowed MTN to pool spectrum belonging to Cell C and Liquid Intelligent Technologies with its own.<\/p>\n\n\n\n<p>Vodacom said Icasa erred by approving the application without public consultations.<\/p>\n\n\n\n<p>It also argued that the pooling agreements constitute notifiable mergers that should have been lodged with the Competition Commission.<\/p>\n\n\n\n<p>During the hearings this week about Cell C&#8217;s application to transfer control of its licences, Vodacom also argued that Cell C&#8217;s spectrum was effectively under MTN&#8217;s control.<\/p>\n\n\n\n<p>Asked to respond to the allegation, Cell C CEO Jorge Mendes said they rejected the claims on the strongest terms.<\/p>\n\n\n\n<p>Contacted for comment, Telkom explained that it did not object to Cell C&#8217;s application.<\/p>\n\n\n\n<p>&#8220;A short submission was made by Telkom requesting that Icasa, in its deliberations, closely consider the issue of control of Cell C&#8217;s spectrum licences,&#8221; a spokesperson for the company said.<\/p>\n\n\n\n<p>&#8220;Telkom did not raise any other material issues in its submission.&#8221;<\/p>\n\n\n\n<p>Vodacom told MyBroadband that it believes Cell C&#8217;s spectrum is not used lawfully in terms of the relevant licenses or in accordance with Electronic Communications Act.<\/p>\n\n\n\n<p>It contended that control of Cell C&#8217;s spectrum licences should not be transferred unless and until this is remedied.<\/p>\n\n\n\n<p>&#8220;Icasa is empowered to take action against non-compliance and should not permit Cell C to transfer rights in the spectrum licence while the spectrum is not being used lawfully,&#8221; Vodacom said.<\/p>\n\n\n\n<p>&#8220;In this instance, Vodacom asserts that Icasa must either prohibit the transaction, alternatively afford Cell C an opportunity to remedy the situation, after which further public hearings must be held to reconsider the transaction.&#8221;<\/p>\n\n\n\n<p>In response to Vodacom and Telkom&#8217;s submissions, MTN said its pooling agreements with Cell C are irrelevant to the licence transfer of control application before Icasa.<\/p>\n\n\n\n<p>MTN submitted that Icasa should only consider whether the transfer of control would hinder competition within the industry.<\/p>\n\n\n\n<p>However, it also noted that such adverse impacts do not necessarily mean Icasa should refuse the transfer; it may just need to impose conditions on it.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1200\" height=\"675\" src=\"https:\/\/mybroadband.co.za\/news\/wp-content\/uploads\/2024\/09\/jorge-mendes-at-Icasa-hearing.jpg\" alt=\"\" class=\"wp-image-561469\" srcset=\"https:\/\/mybroadband.co.za\/news\/wp-content\/uploads\/2024\/09\/jorge-mendes-at-Icasa-hearing.jpg 1200w, https:\/\/mybroadband.co.za\/news\/wp-content\/uploads\/2024\/09\/jorge-mendes-at-Icasa-hearing-600x338.jpg 600w, https:\/\/mybroadband.co.za\/news\/wp-content\/uploads\/2024\/09\/jorge-mendes-at-Icasa-hearing-768x432.jpg 768w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><figcaption class=\"wp-element-caption\">Jorge Mendes, Cell C CEO, at the public hearing hosted by Icasa<\/figcaption><\/figure>\n\n\n\n<p>One of Cell C&#8217;s oldest shareholders, CellSAf, has also opposed the transfer application.<\/p>\n\n\n\n<p>CellSAf&#8217;s legal representative told MyBroadband that there was a lot of uncertainty surrounding <a href=\"https:\/\/mybroadband.co.za\/news\/cellular\/557925-cell-cs-ownership-mystery.html\">the company&#8217;s shareholding in Cell C<\/a>.<\/p>\n\n\n\n<p>&#8220;The structure is too opaque; our client has been oppressed as a minority shareholder and is not consulted on significant decisions that affect their shareholder rights,&#8221; they said.<\/p>\n\n\n\n<p>CellSAf&#8217;s shareholding has been significantly diluted from the 25% it used to own in Cell C due to two recapitalisation transactions \u2014\u00a0one in 2017 and another in 2022.<\/p>\n\n\n\n<p>CellSAf said it believes the Independent Communications Authority of South Africa (Icasa) and the Competition Commission allowed the strategic merger and transfer to take place without scrutiny.<\/p>\n\n\n\n<p>&#8220;Thus, our client was not afforded its regulatory rights to participate. It is our strong contention that all past and current transactions are a nullity for lack of regulatory compliance,&#8221; CellSAf&#8217;s legal representatives said.<\/p>\n\n\n\n<p>&#8220;We believe the transaction is a subversion of BEE and will strip our client of a hard-earned asset for which they paid more than a billion rand nearly twenty years ago,&#8221; said CellSAf.<\/p>\n\n\n\n<p>In the notice of the public hearing, Cell C also announced that it was withdrawing its application to transfer the 10MHz of 3,500MHz radio frequency spectrum it acquired during the 2022 high-demand spectrum auction.<\/p>\n\n\n\n<p>Cell C has forfeited the spectrum and returned it to the regulator. It is currently negotiating to reapply for it.<\/p>\n\n\n\n<p>This is due to a payment arrangement \u2014 which Cell C believed it had in place with the regulator \u2014&nbsp;<a href=\"https:\/\/mybroadband.co.za\/news\/cellular\/558342-why-cell-c-didnt-pay-r288-million-for-spectrum-it-won-at-auction.html\">falling through<\/a>.<\/p>\n\n\n\n<p>It had bid R288 million for the 10Mhz through the auction and had paid a deposit.<\/p>\n\n\n\n<p>&#8220;Between the changes that took place at Cell C and the changes that took place at the regulator, this thing was lost in translation,&#8221; Cell C CEO Jorge Mendes told MyBroadband.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Cell C has been sucked into a conflict between Vodacom and Telkom following its pooling agreements with MTN.<\/p>\n","protected":false},"author":341175,"featured_media":555824,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[3],"tags":[1017,355,23010,42,4490,109,41],"class_list":["post-561439","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-telecoms","tag-blue-label-telecoms","tag-cell-c","tag-cellsaf","tag-mtn","tag-spectrum","tag-telkom","tag-vodacom"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/561439"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/341175"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=561439"}],"version-history":[{"count":5,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/561439\/revisions"}],"predecessor-version":[{"id":561615,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/561439\/revisions\/561615"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/555824"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=561439"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=561439"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=561439"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}