SA court backs blocking of R12 billion broadband tender

Minister Siyabonga Cwele’s bid to interdict and set aside a planned spectrum auction for high-speed broadband in South Africa has been upheld by the North Gauteng High Court.

Judge Roland Sutherland on Friday morning ruled that the minister of telecoms’ interdict application against the Independent Communication Authority of South Africa (Icasa) is upheld.

Cwele’s office earlier this year asked the North Gauteng High Court to interdict and set aside the Icasa planned spectrum auction.Cell C’s application to interdict Icasa from proceeding with the spectrum auction was also granted.

“Icasa is interdicted and prevented from implementing the licencing steps and processes referred to or contemplated in the invitation to apply in notice 438 of 2016,” read part of the judgment.

“Icasa is interdicted from accepting bids in terms of the said invitation to apply and from taking any of the steps set out in the invitation to apply to advance the invitation to apply or any similar steps, pending an application to Cell C to launch review proceedings in respect the invitation to apply, provided the review application is served by 14 October 2016,” added the judgment.

“Costs, including the costs of two counsel, are to be costs in one or other review,” added the judgment.

Icasa’s legal team also responded to the judgment.

“We note and accept the judgment. We are looking forward to part B of the review application and that’s where we’ll take it from,” Rubben Mohlaloga, acting chair of Icasa, told Fin24.

Icasa, then, is set to stop all action on the spectrum auction until the review process. It’s currently unclear when this review process will take place.In July, Icasa invited applicants to apply for 700MHz, 800MHz and 2.6GHz spectrum licences, which will boost the rollout of faster LTE broadband.

But Cwele fought the auction on grounds that government’s policy regarding spectrum, at that stage, had not yet been finalised and that the sale risks only benefitting big companies with deep pockets.

Subsequently, the court explained that if Icasa’s spectrum auction had to go ahead, the process could put businesses at risk.

“The potential for harm in the interim period is said to be that if the industry actors participate in the process initiated by the ITA [invitation to apply] they must put up R3m entrance fees and R100m guarantees, prepare detailed presentations and expend funds to get ready to bid,” read Judge Sutherland’s judgment.

“This exercise would involve raising capital from investors against and uncertain prospect, engaging experts to advise on an uncertain set of possibilities, and drawing up business plans of great complexity,” the judgment noted.


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SA court backs blocking of R12 billion broadband tender