Spectrum auction to be postponed as Telkom secures interdict

Telkom and e.tv have secured an interdict against communications regulator Icasa, preventing the spectrum auction planned for later this month from taking place until the merits of their case can be heard by the high court.

In terms of the order, which was handed down by the high court in Pretoria by Judge Selby Baqwa, Icasa is interdicted from assessing or adjudicating any applications received under its invitation to apply to participate in the spectrum auction. The auction was scheduled to take place by no later than 31 March 2021 — this will now not happen.

At the same time, the court has suspended the closing date for the submission of applications for the licence to operate a wholesale open-access network, or Woan.

The judgment is a victory for Telkom and a significant blow to Vodacom and MTN, both of which were keen for the spectrum auction and licensing process not to be delayed any further. Already, South Africa is about 10 years behind schedule in licensing 4G-suitable spectrum and Monday’s judgment is also likely to delay the roll-out of commercial 5G networks in South Africa.

Telkom filed paper against Icasa at the high court in December because it believed the regulator’s  invitations to apply for spectrum and the Woan had fundamental flaws that could entrench the “dominance” of Vodacom and MTN.

Digital dividend

One of Telkom’s main arguments is that Icasa issued the ITAs knowing that the 700MHz and 800MHz bands – the so-called digital dividend bands used by analogue television broadcasters – are not yet available for use by telecommunications operators. Despite this, Icasa pushed ahead with the licensing of these bands and will expect payment for them despite the inability by successful applicants to use them, Telkom group executive for regulatory affairs and government relations Siyabonga Mahlangu said in an interview with TechCentral at the time.

Telkom also challenged the ITAs on other grounds, including that Icasa “pre-empted the outcome of the mobile broadband services inquiry”, Mahlangu said, adding that Icasa’s design of the auction, as a result, would not promote optimal competition in the sector. “On the contrary, the way the auction is designed will result in competition being stifled and the entrenchment of the duopoly structure of the market.”

Furthermore, Mahlangu said it was Telkom’s view that Icasa “paid lip service, or at least attached insufficient weight, to a policy direction” on spectrum licensing and the Woan from communications minister Stella Ndabeni-Abrahams. Specifically, the minister wanted Icasa to “prefer” the Woan in the licensing of spectrum, something Mahlangu did not believe the regulator had done.

Monday’s judgment in favour of Telkom comes a day before MTN was due to meet Icasa in court over concerns by the mobile operator over how the regulator intends licensing access to the 3.5GHz band. However, TechCentral understands the court date was moved to later this month.

MTN is worried that an “opt-in phase” in the auction process could exclude it from getting access in this important frequency band for 5G. It was not immediately clear on Monday whether the MTN matter will still be heard this month, given the interdict granted to Telkom.  — © 2021 NewsCentral Media