Hunter becoming the haunted?

Worlds Reversed: South Africa’s Telecom Regulator Is In Legal Trouble

By  |  February 1, 2021

In Africa, it is mostly the telecom operators getting the heat. But, from what’s evident in South Africa, it’s worlds reversed.

The Independent Communications Authority of South Africa (Icasa) is being dragged to court by a telecoms service provider. This is the latest development in a longstanding battle between the telecoms regulator and a group of telcos in South Africa over the allocation of internet spectrum.

MTN, the country’s biggest telco, filed an urgent court application to challenge some of Icasa’s 5G spectrum allocation process. The high-demand radio frequency spectrum is being auctioned for the first time in South Africa for more than 15 years.

Telcos like Telkom and MTN opine that the long-delayed and crucial sale of the next-gen connection’s license is being mismanaged into biasness. That’s why Telkom first filed a legal challenge last December when it perceived that the auction is gearing towards benefitting only bigger players like MTN and Vodacom.

Case after case

Now, it is Icasa’s time to sue.

At the end of last week, the telecoms watchdog said it will challenge MTN’s court application into reviewing or scrapping its auction process. The matter has reached such heights because the challenger happens to be the biggest telecoms service provider in not just South Africa, but also across the continent.

However, Icasa has also said that it is going to challenge Telkom’s case from 2 months ago; making it a rather balanced legals battle between the big, small and the in-between.

Well, operators have been patient to get the latest spectrum for more than a decade now. Releasing these licenses is meant to attract new investments and lower costs for both operator and user.

The reason there’s such the clamor for spectrum in Africa’s largest 5G market is that the license is limited. Not because it’s a hardly-open telecoms market like Ethiopia’s, but because television broadcasting is still hogging the frequencies. A jump from the analogue TV era into a digital terrestrial age has proved difficult or time-consuming for the nation.

The auction is meant to take place on 24th March 2021 at last, the ongoing court cases could mean rescheduling the allocation. It might be quite the expensive delay because MTN, Liquid Telecom, Cell C, Rain, Vodacom, Cell C and other players have prepped their pockets to bid during the event.

Controversy over tiers

But before the auction takes place, there’s plenty to resolve.

The main reason MTN, Telkom SA, MTN and their regulator are wrapped in a legal confrontation is the way Icasa has decided to categorize the telcos for the upcoming spectrum bazaar. The regulator put major providers MTN and Vodacom in Tier 2, and Telkom, Cell C and other telcos in Tier 2.

It is MTN’s concern that under such classification, Tier 1 operators will not be allowed to participate in an opt-in auction round, which could jeopardize its ability to secure access to 3.5GHz of frequency spectrum—one of the key ingredients for cooking commercial 5G for its customers’ consumption.

MTN isn’t the first to launch 5G in South Africa, but it surely has one of the largest coverages. While Rain unveiled the network first in the country (in partnership with Huawei), MTN is the only telco with the service in more than 100 cities—even though South Africa (but Nigeria) isn’t it’s largest market in the continent.

According to a statement by Icasa chairperson Keabetswe Modimoeng, MTN’s challenge “is characteristic of either impatience or a subtle desire to channel the authority’s decision-making outlook. We believe that this licensing process has been balanced, with no room for a winner-takes-all attitude. The process cannot be tailored for the narrow fulfilment of one or two specific mobile operators”.

While the results of the legal standoff are awaited, Icasa has said that the auction in March will continue as planned. That’s unless there is a court order issued to delay the process. There might also be a legal directive to halt the process, depending on how things turn out.

Nevertheless, South Africa isn’t new to telco wars.

Featured Image: Business Review Europe

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