Telkom considers suing Icasa over spectrum

Johannesburg - Local telecommunications company Telkom [JSE:TKG] has threatened launching legal action against communications regulator Icasa over a planned spectrum auction.

Telecommunications and Postal Services Minister Siyabonga Cwele has asked the North Gauteng High Court to interdict and set aside Icasa’s planned auction.

Icasa last month invited applicants to apply for 700MHz, 800MHz and 2.6GHz spectrum licences, which will boost the rollout of faster LTE broadband.

The auction for the licences is expected to occur in January 2017 and the reserve price to bid on lots of spectrum will be R3bn.

Cwele is fighting the auction on grounds that government’s policy regarding spectrum has not yet been finalised and that the sale risks only benefitting big companies with deep pockets.

Icasa has previously said its invitation to bidders for the auction was undertaken lawfully.

But now Telkom is eyeing legal action against Icasa as well.

“We have some fundamentally different views about the approach Icasa has adopted on the matter of spectrum and the resultant actions that have been taken,” said Jacqui O'Sullivan, Telkom Group Executive for Communication.

“We are currently considering the legal merits of Icasa’s approach and are exploring our own potential legal action with regard to the Icasa process,” said O’Sullivan.

Meanwhile, Telkom is set to closely watch Icasa’s next steps regarding the ITA (Invitation to Apply) for the spectrum auction and the company could launch legal action after August 24.

“The ITA did invite queries and those closed on August 4 2016. Icasa indicated it would come back to those that submitted queries by August 24,” said O’Sullivan.

“Should it be clear from those responses, that Icasa plans to continue with the current ITA process, we would then need to consider the initiation of our own legal process,” added O’Sullivan.

Icasa’s plan to auction off spectrum has divided the local telecommunications sector with Cell C, Telkom and Minister Cwele criticising the move.

Meanwhile, South Africa’s biggest mobile network, Vodacom, said earlier this year that Icasa’s spectrum auction would be a boost to South Africa’s economy.