MTN Sues S/African Telco Regulator Over Exclusion from 5G Spectrum Allocation

Avatar
MTN

Telco giant, MTN has filed a lawsuit against the Independent Communications Authority of South Africa (ICASA) to challenge its decision classifying the telco as a Tier 1 operator, preventing it from participating in an opt-in round for the auction of 5G spectrum.

The lawsuit was filed at the Gauteng High Court to evaluate, make alterations or overturn these two clauses contained in the ICASA spectrum auction process.

MTN is one of six telecom operators in South Africa that have applied for the ICASA auction of International Mobile Telecommunication
(IMT) spectrum bands. MTN has taken legal action to contest ICASA’s decision to solely label it a Tier 1 operator and wants a spectrum auction structure without classification or the opt-in scheme.

MTN Ghana Takes Telco Regulator to Supreme Court  After Market Dominance Verdict Threatens Stronger  Competition

MTN has questioned the premise used to tag it a Tier 1 operator and is pushing for equal access to 5G spectrum for all operators during the auction.

Suggested read: NIMC Authorises Telcos to Carry Out NIN Registration Barely Two Weeks to Deadline

MTN’s 5G Expansion Plans Under Threat

Under ICASA’s spectrum auction structure, MTN and Vodacom have been classified as Tier 1 operators. This means that they can only take part in the auction for 4G spectrum. However, the other four Tier 2 mobile operators – Telkom, Cell C, Rain, and Liquid Telecom would be eligible to bid for 5G spectrum during the ICASA auction.

Screenshot of ICASA Spectrum Auction Invitation to Apply Document

The spectrum bands that are up for auction are in the ranges of 703 – 790 MHz (“IMT700”), 790 – 862 MHz (“IMT800”), 2500 –2690MHz (“IMT2600”) and 3400 – 3600 MHz (“IMT3500”). The IMT3500 spectrum, which is best for 5G deployment, is only up for sale in the opt-in round which MTN isn’t allowed to take part in.

Screenshot of ICASA Spectrum Auction Invitation to Apply Document

Acquiring 5G spectrum is key to MTN’s 5G expansion plans in South Africa. In June last year, MTN unveiled its 5G network across 100 tower sites after being assigned temporary additional spectrum by the Government. In the case where MTN cannot get much needed 5G spectrum, its plan to extend its 5G network coverage in the country faces a roadblock and would end up stalling.

ICASA’s stance would foil MTN’s nascent 5G rollout project which is key to gaining high-end subscribers using 5G devices.

Govt Trying to Force MTN Competition

The South Africa government possesses a 40% majority stake in Telkom, which became the country’s third largest operator, behind Vodacom and MTN, in September last year.

South African telecom operator Telkom moves into financial services | CGTN  Africa

With much bigger budgets compared to other operators, MTN and Vodacom have led the way in 5G deployment in South Africa. Now, it appears like the deliberate exclusion of MTN is aimed at increasing Telkom’s own chances of landing 5G spectrum at the ICASA auction.

5G spectrum is expensive and in short supply, meaning that only a limited band of spectrum can be assigned to operators. Shutting out the possibility of MTN and Vodacom getting more 5G spectrum at the auction effectively positions Telkom as the strongest bidder among the four Tier 2 operators.

Telkom still only has about 12 million subscribers, which is not up to half of MTN’s 30 million subscribers. For the government-run telco, 5G deployment would increase its market appeal at the expense of MTN’s 5G advancement.

That said, it remains to be seen how MTN’s legal proceeding against ICASA develops in the coming weeks.


If you’d like to get featured on our Entrepreneur Spotlight, click here to share your startup story with us.



Related Posts