The Independent Communications Authority of South Africa (ICASA), South Africa's national radio frequency monitor, has released procedural frameworks as well as dates and times for the highly anticipated International Mobile Telecommunications spectrum (IMT). Despite some well-publicized legal challenges, this will all begin on March 8, 2022.

Radiofrequency spectrum in the 700 MHz, 800 MHz, 2600 MHz, and 3500 MHz bands will be licensed off through an auction process for the purposes of increasing national wireless broadband access services to both citizens and business.

After clearing the pre-qualification procedure on February 21, 2022, six qualified bidders, Telkom, Vodafone, MTN, Rain Networks, Cell C, and Liquid Telecoms, will compete for the spectrum.

Telkom filed a review application in the North Gauteng High Court on January 4, 2022, contesting ICASA on procedural and substantive grounds. On procedural grounds (Part A), relief sort was an interdict to suspend the invitation-to-apply (ITA) process. Furthermore, on substantive grounds (Part B), Telkom sort an order to remove the sub-1GHz spectrum from the planned auction, as this band is presently the subject of a legal challenge made by broadcaster Etv in the digital migration process.

In a statement, Telkom argues that “As indicated by parties at the meeting with the acting judge president, the regulator, a respondent in this application, would now be expected to carefully consider the prudence of proceeding with the auction, mindful that the outcome of the hearing of part B of Telkom’s application may have a material impact on the process and outcomes of the auction.”

The High Court has set aside the dates of April 11-14, 2022, for hearings on the review application.

Procedural frameworks

ICASA will kick off the official process with the Opt-In Auction on 8 March 2022. The Opt-in Auction consists of a single bidding round where eligible bidders may submit bids to achieve a minimum spectrum portfolio (MSPs).

Only Tier-2 Operators are eligible to participate in the Opt-in Auction and to bid for packages that, if the bidder is successful, will ensure that when combined with its existing IMT Spectrum holdings, the bidder has access to a minimum spectrum portfolio (MSP) of 2x10 MHz in sub-1 GHz and 60 MHz above 1 GHz.

Only 2 bidders can win the spectrum to achieve the MSP in the Opt-in Auction. The 4 eligible bidders are Cell C, Liquid Telecoms, Rain Networks, and Telkom.

Bidders will be required to submit their bids in person between 10h00 to 12h00 on 8 March 2022. The round will close early if bids from all qualified bidders were received before the scheduled end of the bidding window. Up to two Authorised Representatives of each qualified bidder (regardless of whether they are eligible to bid in the Opt-in Auction) will be allowed to observe and monitor the process.

The bid evaluation will be carried out in front of all authorized representatives and following the close of the bid submission window. ICASA will make a public announcement at the end of the Opt-in Auction including the winners, the amount of spectrum they won, and the amount they will need to pay.

The main auction, the Main Stage, will start on 10 March 2022 and will be conducted using an online auction platform. All six qualified bidders will be eligible to bid for spectrum in this stage. Bidding is normally scheduled on business days between 09h00 and 17h00.

As the Main Stage is conducted in multiple bidding rounds and will end when bidders do not submit any newer bids (or waivers), a public announcement will be made after the conclusion of the Main Stage, including the winners for each lot as well as the amount that they will need to pay.

Following the conclusion of the Main Stage, ICASA will conduct an in-person assignment phase, Frequency Assignment Phase, with all qualified bidders. This is an administrative process to determine the frequency assignment position of the lots won in the Opt-in Auction and the Main Stage. There will be one clear business day between the conclusion of the Main Stage and the start of the Frequency Assignment Phase. This phase will be concluded in a single day.

“Our public interest mandate requires of us to be thorough in our approach to licensing and regulatory interventions. We continue to take the necessary care in this spectrum auction process to ensure that there are no irreversible anti-competitive effects for the industry and the market. We therefore urge all bidders to work collaboratively with us for the benefit of all South Africans so that the assignment of the high demand spectrum can make a meaningful contribution to the country – with economic spin-offs, and benefits to the citizens and the overall business environment, “ concluded Dr. Modimoeng.

The team will be tracking the spectrum auction & providing live updates on developments.  

— By Bataung Qhotsokoane

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