R3bn too much for spectrum: Cell C

Telecoms

South Africa’s third largest mobile network, Cell C, has expressed its concern over having to fork out at least R3bn to bid for radio frequency spectrum. Communications regulator Icasa on Friday invited applicants to apply for spectrum licences in the 700MHz, 800MHz and 2,6GHz bands.

The move comes as mobile networks such as Vodacom have called for more frequencies as they have resorted to “re-farming” spectrum to provide limited LTE coverage in the country.

An applicant will qualify to bid on only one of the spectrum lots which range from “Lot B” to “Lot E”.

The reserve price or minimum starting cost of the lots is also R3bn, while the auction for the licences is expected to start on 17 January 2017 and end on 30 January 2017.

But Cell C has questioned the timelines and reserve price for the auction.

“On an initial reading the timetable, it seems quite rushed and the reserve price for the spectrum lots appears high especially as the spectrum lots are not equally valuable,” said Cell C chief legal officer Graham Mackinnon.

Icasa said that “a licence is valid for 15 years from the date of issue” and that it is “renewable on an annual basis upon payment of the prescribed annual licence fee”.

The main aim of the licensing is to ensure nationwide broadband access for all citizens by 2020, said Icasa. But Mackinnon said that Icasa may be at odds with the department of telecommunications & postal services regarding the auction.

“It is an interesting development, but we are concerned that Icasa has issued the invitation to apply (ITA) without a clear policy directive from government,” said Mackinnon.

“We know for a fact that the department of telecoms & postal services is in the process of finalising its policy in this regard and so by issuing the ITA before this is finalised, this may create unnecessary tension.

“We are still studying the ITA to assess its terms and will apply if the terms are fair,” Mackinnon added.

Cell C has still cautiously welcomed the spectrum auction, but called for government buy-in as well. “Operators cannot effectively roll out next generation technologies without this spectrum,” said Mackinnon.

“However, it needs to be done with the buy-in of all stakeholders, obviously including government, as spectrum is a national resource,” Mackinnon added.
Source: Fin24