On 17 March 2022, the South African communications regulator (ICASA) completed an auction for a large amount of high demand spectrum (326MHz) for use by mobile operators.
In total, six bidders won spectrum across a wide range of bands (700MHz, 800MHz, 2.6GHz and 3.5GHz), with the auction raising more than R14.4bn (over £700m) for the South African fiscus. All of the spectrum on offer was sold, except for a 2X10MHz of 800MHz block that carried an enhanced coverage obligation. The auction had been subject to lengthy delays, as there were several complex issues that needed to be addressed before the auction could proceed. Therefore, the auction represents a major step for the South African mobile sector and the wider economy.
Being able to access high quality and affordable mobile services is particularly important in South Africa, as many households do not have the option of using fixed services due to a lack of coverage. Most of the spectrum on offer has been used by operators on a temporary basis over the past few years, as a result of the Covid-19 pandemic. However, the permanent assignment of this spectrum should facilitate much more widespread roll-out and use of the spectrum. The spectrum will not only allow operators to significantly improve the capacity and coverage of their 4G networks, but will also allow operators to roll-out much more extensive 5G networks.
Frontier Economics advised the largest mobile operator, Vodacom, throughout the auction process.
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