SA telecoms ministry lodges legal objection to proposed auctions

The telecoms ministry in South Africa has taken legal action against the country’s regulator after it proposed selling spectrum worth over $1 billion.

Having initially threatened a legal challenge last month, the ministry has now initiated proceedings in an attempt to block the proposal by ICASA (Independent Communications Authority of South Africa). The regulator has confirmed that it will respond to the challenge, along with operators Cell C, MTN, Telkom SA and Vodacom.

Last month, ICASA called for parties to register their interest in bidding for spectrum, with the reserve price set at ZAR3 billion ($210 million). Policy disputes at government level have led to the auction process being delayed for the past five years, and telecoms minister Siyanbonga Cwele reacted to the proposal by stating that no policy direction had been decided for the spectrum issued by ICASA.

Cwele added that ICASA had been hasty in inviting bids as the spectrum in question would not be immediately available. A ministry statement claimed that blocking the sale of spectrum “has become necessary in order to prevent irreparable harm which unsuspecting interested parties may suffer in the licensing process which this court could ultimately find unlawful”.

The ministry stated that ICASA should not hold the auctions – which it had earmarked for January - until the policy document was approved, noting that at this stage an auction would deter new players from entering the market. The deadline for demonstrating that the order should not be approved by a South African high court is August 26th.

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