The Independent Communications Authority of SA (Icasa) this week said it would invite mobile operators to apply to bid for spectrum for 4G and next-generation 5G networks from Friday, with the country’s first auctions expected to take place by the end of March.
Allocation of frequency bands for wireless communication, especially 5G, is seen as key to expanding broadband services in Africa’s most industrialised economy, where the high cost of telecommunications is a barrier to doing business.
“The authority will make available 406MHz of spectrum for the provision of mobile broadband services in South Africa,” said Icasa chairperson Keabetswe Modimoeng.
Data costs have come down after mobile operators were forced to cut prices, but they argue that prices can’t drop significantly until regulators auction the much needed spectrum.
There are five main mobile operators who will participate – MTN, Vodacom, partially state-owned operator Telkom, unlisted Cell C and Rain.
The operators will be able to bid for spectrum in the 700MHz, 800MHz, 2.6GHz and 3.5GHz bands. Reserve prices for lots in the 3.5GHz band, key for 5G, range from R9.8 million to R75.6 million, Modimoeng said.
The closing date for interested bidders to register is December 28, while the closing date for government’s wireless open access network (Woan) invite is March 30.
The Woan, which will be owned by private-sector players, is government’s way of creating a shared model for spectrum allocation rather than auctioning the resource to the highest bidder.
Successful licensees of high-demand spectrum will be obliged to procure a minimum of 30% national capacity from the Woan “collectively as soon as the Woan is operational for a period of seven years,” Modimoeng said.
Earlier this month, Icasa said it planned to auction high-demand spectrum by no later than the end of March, pushing back the process by three-months.
As a result, mobile operators will keep the temporary spectrum awarded to them under the Covid-19 national state of disaster regulations until the auction. Operators were meant to hand it over on November 30.
Icasa had been at odds with government over the allocation of these licences. Government went to court in 2016, blocking the auction after Icasa unexpectedly announced the sale in July 2016.