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Bidders to pay R3bn in SA spectrum auction

Johannesburg - Networks wanting radio frequency spectrum licences for faster mobile broadband services in South Africa will have to fork out at least R3bn.

The Independent Communications Authority of South Africa (Icasa) on Friday invited applicants to apply for the spectrum licences in the 700MHz, 800MHz and 2.6GHz range.

The move comes as mobile networks such as Vodacom have called for more frequencies as they have resorted to refarming spectrum to provide limited LTE coverage in the country.

Icasa, in a government gazette on Friday, further said that the main aim of the licensing is to ensure nationwide broadband access for all citizens by 2020.

An applicant will qualify to only bid on one of the spectrum lots which range from ‘lot B’ to ‘lot E’. Lot A, however, will be issued through a separate process while applicants will be free to switch among lots during the auction stage.

The auction for the licences is expected to start on January 17 2017 and end on January 30 2017.

“The reserve price of the lots is R3bn,” said Icasa in the gazette.

The reserve price is the minimum starting cost for a lot in the first round, should the award proceed to the auction stage, said Icasa in the gazette.

Icasa further said that “a licence is valid for 15 years from the date of issue” and that it is “renewable on an annual basis upon payment of the prescribed annual licence fee”.

Conditions

However, bidders who are successful in securing a licence will have to adhere to certain conditions.

Icasa said a “licensee must provide data services across the country with an average uplink of 15Mbit/s and the downlink user experience throughput of at least 30 Mbit/s to 100% of the population of South Africa by 2020”.

Licensees will further be expected to regularly submit documents to demonstrate progress in these speed obligations.

Icasa also has open access requirements for licensees which include that networks must provide “open access to a minimum of three Mobile Virtual Network Operators (MVNOs)”.

MVNOs ride on top of existing mobile networks but they have their own brands and niche markets. Examples of local MVNOs include the likes of FNB Connect which taps the Cell C network.

Licensees will have a maximum of three years to provide these MVNO services, said Icasa.

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