Nicola Mawson
Vodacom’s bid in the Johannesburg High Court to have a 2022 decision by industry regulator, the Independent Communications Authority of South Africa (Icasa), to allow its competitors to pool spectrum could have consequences for the entire industry.
A legal expert in the field, speaking on condition of anonymity because the matter is before the court, said on Friday that the entire matter “could turn into a broader fight regarding all the mobile network operator’s (MNOs) spectrum, which will be a consequence of the regulator taking so long to auction the radio frequency.”
Telkom has consistently asked Icasa, including as part of the 2022 spectrum auction preparation process, to review all spectrum sharing and pooling deals, as these have the potential to skew competition.
It took 15 years for Icasa to finally auction high demand frequency to allow operators to expand coverage, but ran the process only in 2022, with each mobile operator paying billions of rand to buy blocks.
The spectrum in question in the court matter is the 4G range.
The lawyer tells Business Report that, while operators waited for frequency to be allocated, they had to make their own plans, which, in this case included sharing spectrum that was contiguous to other ranges.
In court papers filed ahead of a hearing currently scheduled for August 24 this year, Vodacom argues that Icasa decided in the middle of June 2022 to allow its competitors - MTN, Cell C, Liquid Telecoms, Telkom, and Rain - to pool their spectrum without public consultations, which it believes limits competition.
In a statement, Vodacom said: “After exhausting other options, Vodacom was left with little choice, but to approach the High Court for relief.”
"It is our considered view that spectrum pooling is a material change of control event that has wide-ranging implications for both competitors and consumers.”
In an affidavit attached to the 386-page court filing, Vodacom’s managing executive of regulatory affairs, Andrew Barendse, said spectrum allocation has been the subject of much litigation as it was a scarce resource.
He added that it was an “essential tool” to compete in the mobile and other communications markets.
“MTN and those with whom it ‘pools’ spectrum have been unlawfully allowed to pool and, therefore, transmit on significant blocks of HDS [high demand spectrum] for which they are not licensed by the ECA [Electronic Communications Act] and the regulatory framework, and this was all done in secret, without any notice to Vodacom (or the public), and without any opportunity afforded to Vodacom (or any third party) to comment and to make representations on whether this should be allowed,” Barendse said in the affidavit.
However, the legal expert said there was a provision in the ECA that allowed spectrum to be pooled, provided that it was adjacent to that of the other operator/s.
“It’s about competition. All the large mobile operators have put roughly the same amount of money into their networks,” he said.
Vodacom is asking the court to interdict the respondents in the court case from using the spectrum until Icasa’s decision to allow the pooling is reviewed, and also wants Icasa’s decision declared unlawful.
MTN South Africa declined to give a detailed comment until its legal team had gone through the court papers.
“We are studying these papers and consulting with our external legal counsel to determine our next course of action. We are not able to comment at this stage,” it said.
Icasa did not respond to a request for comment.
BUSINESS REPORT