South Africa Spectrum Sale in Doubt After Telkom Wins Delay

(Bloomberg) -- South Africa’s long-awaited plan to sell more high-speed internet spectrum has been thrown into doubt after Telkom SA SOC Ltd. won a court ruling suspending the process.

The Independent Communications Authority of South Africa should hold off on the auction and lift a deadline for the submission of final bids while Telkom’s case is considered, the High Court in Pretoria said Monday.

The decision threatens to derail the sale of more than 8 billion rand ($521 million) of broadband spectrum that was approved last year following years of delays, a move designed to help revive the economy and lower data costs. The auction has long been demanded by mobile-phone operators including Telkom, but the former phone monopoly took action after concluding the terms are not to its benefit.

The matter should be resolved through mediation outside a lengthy court process, Minister of Communications and Digital Technologies Stella Ndabeni-Abrahams said in a statement.

“We are calling on all parties and the sector to work together in the spirit of give and take and avert further delays on auctioning of spectrum,” she said.

The structure of the sale is also opposed by MTN Group Ltd., which has the country’s second-biggest number of mobile-phone subscribers and is pursuing its own legal case. The Johannesburg-based carrier argues it is being shut out of bidding for new 5G bandwidth due to its size.

Data Costs

Market leader Vodacom Group Ltd. has not objected.

“Vodacom has not been given permanent access to new high-demand spectrum in 15 years,” a spokesman said by text message. “As we have said previously, the award of new spectrum remains a critical part of reducing input costs and, by extension, the cost of data.”

Telkom’s specific issue is that two bandwidths the company covets are occupied by broadcasters and there’s no plan to open them up, the Pretoria-based company said in a statement last month.

“The delay in the licensing of high demand spectrum has huge implications in terms of competition in the mobile-services market as well as reduction of cost to communicate,” Icasa Chairman Keabetswe Modimoeng said in a statement. “For as long as there is an interdict in place, South Africans will continue to bear the brunt for high data costs, ineffective competition and a deprived economy.”

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