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- Rain and Telkom have been declared the winning bidders of the first round of broadband spectrum, aimed at smaller mobile operators.
- This is the first auction of spectrum in South Africa in more than a decade.
- They will pay a combined amount of more than R2.6 billion for the spectrum.
Rain and Telkom have been declared the winning bidders of the first round of broadband spectrum, shelling out a combined amount of more than R2.6 billion, the Independent Communications Authority of South Africa (Icasa) said on Tuesday.
The auction of spectrum – the first in more than a decade – was open to the so-called "tier 2", smaller companies: Cell C, Liquid Telecoms, Rain Networks and Telkom.
Telkom paid R1.5 billion for its bands and Rain forked out R1.1 billion.
"History has been made this morning," said Icasa chairperson Keabetswe Modimoeng. Modimoeng pointed out that there could only be two winning bidders in this round.
The release of additional spectrum is expected to benefit the rollout of 4G and 5G technologies.
The process will resume on Thursday, where all six qualified companies, including the tier 1 operators Vodacom and MTN, will submit bids in the main auction.
Icasa had initially estimated the auction would yield R8 billion. The frequency bands will be released from June.
Telkom fight
The auction takes place despite the upcoming legal review of the process launched by Telkom, which will be heard next month.
Telkom wants the auction to be declared invalid. The company, which is partly owned by the state, argues the design of the auction process issued by Icasa will entrench an uneven playing field in the telecoms sector.
In its responding affidavit filed this week in the North Gauteng High Court in Pretoria, it contends that Icasa is unwilling to conduct the licensing of spectrum lawfully.
However, Icasa appears unfazed by the court action, stating that there is "no legal impediment to the auction proceeding".
It argues that Telkom has on several occasions opposed the system adopted by Icasa for the allocation, and emerged as one of the winning bidders.
The authority emphasised that it had "complete faith in this licensing process" - adding that it would translate into greater investment in broadband infrastructure and economic growth for the country.
Icasa says it is committed to "successfully completing the auction and will strongly oppose all efforts aimed at undoing the economic and social gains arising from the process."
