Government gives nod for third cell licence

Johannesburg, 01 Feb 2000

Communications minister Ivy Matsepe-Casaburri has given the go-ahead for the third cellular licence to be issued. The minister said in a statement that a final recommendation will be made to her by the end of March.

The introduction of a new cellular operator has been delayed time and again. When the submission of bids closed in June last year, speculation had it that the licence could be awarded by August. Public hearings on the various bids were delayed until September, which moved the probable date of issue to December.

When the hearings finally started, some bidding consortiums were already chaffing at the delay. But they were in for a longer wait.

Allegations that South African Telecommunications Regulatory Authority (SATRA) councillors were biased were closely followed by allegations of nepotism and mismanagement from chairman Nape Maepa. Investigations by both an independent auditing firm and the auditor general followed, delaying the issue of the licence despite assurances that the process would move on.

Matsepe-Casaburri said over the weekend that the licensing process would proceed, but did not comment on the innocence of SATRA councillors. "It is most unfortunate that we had to delay the licensing process in order to deal with these allegations," she said. "But it was necessary to ensure that the bidding process rigorously followed the statutory requirements and to restore the integrity of the process."

According to the statement, the minister had been briefed by the auditor general and decided that the licence must be issued.

Some bidders have indicated that further delay could cause them to withdraw from the race completely. Investors, various consortiums said, were becoming restless, and Vodacom and MTN were being given time to strengthen their market positions.

Matsepe-Casaburri said SATRA will name a preferred bidder by the end of February. Applicants will then be given an opportunity to shoot that bid down publicly before a recommendation is made to the government by the end of March.

Although judgement of the bid rests almost solely on the SATRA council, the body can only make a recommendation. The communications minister is responsible for issuing the licence itself.