Wireless network capacity auction won’t happen as planned, says Telkom

Telkom said in a trading update on Monday that it does not believe industry regulator Icasa will be able to auction off high-demand radio frequency spectrum by 31 March 2024.

The Independent Communications Authority of South Africa (Icasa) said in April last year that it plans to hold another auction in early 2024.

This comes after Icasa concluded an auction for highly sought-after spectrum suitable for 4G and 5G networks in March 2022.

It raised R14.5 billion for the national fiscus.

Spectrum is raw wireless network capacity. Operators use these frequencies to provide connectivity between their towers (or satellites) and wireless receiving equipment like smartphones.

South Africa’s mobile operators had been begging for additional spectrum in the critical bands that Icasa auctioned off in 2022 for the better part of 15 years.

However, when Icasa announced plans to hold another auction two years after the last one, Telkom said it would prefer to see it delayed until 2025.

Telkom said the challenging economic environment, including the impact of load-shedding, would make it difficult for Telkom and other market participants to partake in the auction.

In its trading update on 19 February 2024, Telkom said Icasa has not yet started consultations for the next auction.

This includes conducting a competition assessment pertaining to licensing additional spectrum.

“[Therefore], it is unlikely that Icasa will complete the licensing process by [31 March 2024],” it stated.

In addition to its comments about Icasa’s next planned auction, Telkom notified shareholders that it paid its final R972-million fee for the previous auction to Icasa on 29 December 2023.

It only made the final payment when the spectrum it bought finally became available after South Africa’s old analogue television transmissions in those bands were switched off.

Telkom said the analogue switch-off was only concluded by 30 September 2023.