South Africa is holding the most important tech auction in its history this week – what you should know

The Independent Communications Authority of South Africa (Icasa) says it is ready to begin the long-awaited auctioning of the International Mobile Telecommunications (IMT) high demand spectrum from Tuesday (8 March).

The spectrum auction, which is seen as something of a panacea for many of South Africa’s communications problems, has been mooted for more than a decade.

Regulator Icasa said the auction will lead to the enhancement of competition in the mobile services sector, increasing broadband connectivity and coverage, as well as bridging the digital divide between urban and rural access to mobile broadband networks. It is also broadly expected to reduce the costs of mobile data in the country.

The opt-in auction 

Icasa will kick off this official process with an opt-in auction on 8 March 2022. The opt-in auction consists of a single bidding round where eligible bidders may submit bids to achieve a minimum spectrum portfolio (MSPs).

Only ‘tier-2 operators’ are eligible to participate in the opt-in auction  – this excludes major players Vodacom and MTN. Once a bidder is successful, the spectrum that has been ‘won’ will be combined with its existing spectrum holdings. Only two bidders can win spectrum in the opt-in auction, Icasa said.

The four eligible bidders are:

• Cell C;
• Liquid Telecoms;
• Rain Networks;
• Telkom.

Bidders will submit their bids in person between 10h00 to 12h00 on 8 March 2022.

“The round will close early if bids from all qualified bidders were received before the scheduled end of the bidding window. Up to two authorised representatives of each qualified bidder – regardless of whether they are eligible to bid in the opt-in auction – will be allowed to observe and monitor the process,” Icasa said.

“Bid evaluation will be carried out in front of all authorised representatives and following the close of the bid submission window.”

Icasa will then make a public announcement at the end of the opt-in auction including the winners, the amount of spectrum they won and the amount they will need to pay.

The main stage

The main auction will start on 10 March 2022 and will be conducted using an online auction platform.

All six qualified bidders will be eligible to bid for spectrum in this stage – including the country’s two biggest telecoms players Vodacom and MTN.

“Bidding is normally scheduled on business days between 09h00 and 17h00. As the main stage is conducted in multiple bidding rounds and will end when bidders do not submit any newer bids (or waivers), a public announcement will be made after the conclusion of the Main Stage, including the winners for each lot as well as the amount that they will need to pay,” Icasa said.

Assignment 

Following the conclusion of the main stage, Icasa will conduct an in-person assignment phase with all qualified bidders.

This is an administrative process to determine the frequency assignment position of the lots won in the opt-in auction and the main stage, the regulator said.

There will be one business day between the conclusion of the main stage and the start of the frequency assignment phase. This phase will be concluded in a single day.

“Our public interest mandate requires of us to be thorough in our approach to licensing and regulatory interventions. We continue to take the necessary care in this spectrum auction process to ensure that there are no irreversible anti-competitive effects for the industry and the market,” said Icasa chairperson Dr Keabetswe Modimoeng.

“We, therefore, urge all bidders to work collaboratively with us for the benefit of all South Africans so that the assignment of the high demand spectrum can make a meaningful contribution to the country – with economic spin-offs, and benefits to the citizens and the overall business environment.”

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