SA Issues Long-awaited Spectrum Licenses For Network Expansion

South Africa is unarguably the most industrialized economy in Africa. It is also the continent’s testbed for globally exportable digital solutions, thanks to the country’s accelerated appetite for tech and the presence of a highly educated and Europe-influenced workforce.

While most other Sub-Saharan markets are still in the “considering” or “test deployment” phase, South Africa launched the region’s first commercially available fifth-generation connection network, in the second quarter of 2019. In May 2020, another commercial launch saw the light of day.

But, ever since, what is held as the most tech-forward market in the region has stalled the expansion of 5G, despite the obviously increased demand.

It has been a long time since South Africa issued spectrum licenses. However, for the sake of more connectivity nationwide, telecommunications stakeholders have been clamouring for the government to allocate more frequency to the players in the market. Moreover, since the country’s pandemic-influenced lockdown, there has been a surge in demand for faster connection speeds. Prolongedly, the allocation process dallied in the shadow of legal controversies.

Now, however, some positives are in the play. According to emerging reports, the spectrum auction, which was set in motion a few weeks ago, proved quite rewarding. The Independent Communications Authority of South Africa (ICASA), the telecoms watchdog of the nation, seems to have finally done it.

ICASA has completed [the first phase of] the spectrum auction, an event in which six qualified bidders participated. Per a statement following the close of 4G and 5G frequency sales, the telecoms monitor raised as much as USD 960.7 M, equivalent to ZAR 14.4 B at current exchange rates. Telcos such as Rain, MTN South Africa, Liquid Telecom, Cell C, Telkom South Africa and Vodacom South Africa took part in the bidding.

MTN and Vodacom spent the most at the auction, however, emerging winners, respectively, with 100 MHz + 2.6 GHz and 110MHz + 3.5 GHz. Each operator reportedly spent approximately USD 333 M on these acquisitions.

Meanwhile, Rain picked up 20 MHz + 700 MHz and 20 MHz + 2.6 GHz for USD 93.4 M, Telkom bought 20 MHz + 800 MHz and 22 MHz + 3.5 GHz for USD 146.8 M, Cell C took 10 MHz + 3.5GHz for USD 19 M, while Liquid Telecom spent USD 7.4 M on 4MHz + 3.5GHz.

“Although the outcome of the spectrum auction pricing was high, Vodacom is pleased with the auction’s outcome, which is a win for all of our customers who can in the coming years benefit from even wider coverage, faster speeds and enhanced network quality. Once the auction process is fully concluded, our immediate focus will be on deploying valuable spectrum to extend both 4G and 5G network coverage to more parts of the country,” said Shameel Joosub, CEO of Vodacom.

Since this is mostly an inaugural part of the process, the second phase, an administrative process meant to help determine the allocatable spectrum ranges, is now due for a conclusion. The buy-ins, when finalized, would usher in a more reliable and sustainable generation of South African internet connectivity Chiefly, they would bring about 5G expansion.