Communications (South African market)

2022: Selling frequency for LTE and 5G for $967 million

On March 18, 2022, South Africa completed an auction to sell the radio frequency spectrum for LTE- and 5G-networks, earning almost $1 billion ($967.49 million) from six participants.

The Independent Communications Authority of South Africa (ICASA) reported that auction participants Vodacom Group, MTN, Rain, Telkom, Cell C and Liquid Telecom filed applications and received licenses to use the spectrum.

Telecommunications tower in Johannesburg

We look forward to... that the proceeds from the auction will be used for the benefit of all South Africans, "said Keabetswe Modimoeng, ICASA Executive Chairman, in a statement.

For some operators, such as Rain and 40% state-owned Telkom, this is the first time they will have access to frequencies below 1 GHz needed to improve rural data services and indoor coverage - such frequencies can pass through walls and penetrate underground.

Since 2005, operators have been waiting for licenses to use the spectrum necessary to reduce the cost of transmitting data and introducing 5G, as the process has slowed down due to legislative difficulties.

Vodacom became the largest buyer, receiving 110 MHz of frequency spectrum with increased demand. He will pay $360 million for 2 units of 10 MHz in the 700 MHz band, 1 unit of 80 MHz in the 2600 GHz band and 1 unit of 10 MHz in the 3500 MHz band.

Shamil Josub, CEO of Vodacom Group, noted that despite the high price, the operator is pleased with the results of the auction and will now expand coverage of 4G and 5G networks in all parts of the country.

The next total cost was MTN, which allocated $350 million for 2x10 MHz in the 800 MHz band, 4x10 MHz in the 2600 MHz band and 4x10 MHz in the 3500 MHz band.

The operator stated that this is the first time since 2005 that the spectrum in South Africa is allocated on an ongoing basis, and increases the total volume of the MTN spectrum from 76 MHz to 176 MHz.

Telkom, which still disputes some aspects of the auction, acquired 22 MHz in the 3500 MHz band for $600 thousand. The operator has already received 2x10MHz in the 800MHz range for $100.1 million at the selection stage.

Rain Networks received 10 MHz in the 3500 MHz band for $18.7 million in addition to 2x10 MHz in the 700 MHz band and 10 MHz in the 2600 MHz band, which were purchased for $100 million at the opt-in stage.

Cell C received 1x10MHz in the 3500MHz band for $19.2 million, and Liquid Telecom received 4MHz in the 3500MHz band for $6.7 million.

The third, mainly administrative stage, will be held on March 22, 2022 to accurately determine which frequency spectrum bands will be assigned to each of the purchased lots.

ICASA noted that in the 800 MHz band there is one unsold 2x10 MHz section that will be licensed in the future.^[1]

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