The Independent Communications Authority of SA (ICASA) is gearing up to do battle with Telkom and does not seem keen to negotiate with all parties that are opposing its plan to allocate spectrum.
ICASA was yesterday interdicted by the North Gauteng High Court following an urgent application by Telkom to halt the spectrum auction, claiming the process was flawed and the regulator must address its concerns before proceeding with the allocation.
The court granted the order but ICASA is vowing to fight, with chairperson Dr Keabetswe Modimoeng saying: “In commitment to our public interest mandate, the council of ICASA has resolved to exhaust all legal avenues in respect of this process.”
Modimoeng says although dismayed by the decision, ICASA remains resolute that the licensing process shall in due course be finalised.
“We have never been so close to licensing high-demand spectrum. We were literally three weeks away from auctioning this much-needed resource that would have seen South Africans benefit through this process in terms of reduced data costs and improvement in quality of service and experience.”
ICASA says the delay in the licensing of high-demand spectrum has huge implications in terms of competition in the mobile services market, as well as reduction of cost to communicate, particularly data costs for consumers and business.
“For as long as there is an interdict in place, South Africans will continue to bear the brunt of high data costs, ineffective competition and a deprived economy. But ICASA remains confident and forward-looking to ensure South Africans ultimately benefit from this licensing process.”
Willing negotiator
Reacting to the news, communications and digital technologies minister Stella Ndabeni-Abrahams offered to mediate between the warring parties but it seems ICASA is not keen on the suggestion.
According to Ndabeni-Abrahams: “The ministry remains open to mediation for the parties involved, in order to find a common solution through alternative dispute resolution outside of the court process.”
However, Modimoeng says: “We were here in 2016 when an interdict on a similar matter was issued, and that led the authority to enter into an out-of-court settlement, withdrawal of the ITA and other forms of mediation. Such interventions took us nowhere. We are not going back there.
“It is our considered view that the best option is to exhaust all possible legal avenues at our disposal, including appeals, to ensure this sensitive licensing process is not only defined by industry players but also by the public.”
Country first
The growing impasse has also solicited strong reaction from industry analysts, who say the parties must focus on the best outcome for the country and close all legal loopholes that may result in further delays.
“The most important thing is not to rush the spectrum allocation at all cost but to do the right thing for the country for the long-term and be fair to all stakeholders. If there are genuine concerns that are also in the public interest, with the proposed spectrum allocation, then a few months delay to resolve those matters is reasonable,” says Peter Takaendesa, head of equities at Mergence Investment Managers.
Commenting on the latest developments, Ian Brink, research analyst at Prima Research, says while the delay could have a serious market impact, Telkom may have a case “which needs to be heard and the courts agree – so the process needs to run its course. A similar thing is likely to happen with MTN, who is also mounting a challenge regarding the opt-in rounds and the auctioning of the 3.5GHz spectrum.”
Brink believes the delay was inevitable because it seems there may have been “plenty of urgency from the regulator to get the auctions pushed through”.
Spiwe Chireka, independent telecoms analyst, says: “We are in a new dispensation of what we can now call the ‘stalled telecoms sector in South Africa’ with the usual delays but this time emanating from the industry side.
“It will be key to see if the latest round of delays will be justified when Telkom formerly and clearly presents its arguments (as per the court’s ruling) because SA is a democratic country where most, if not all, dissenting parties are given a chance to be heard (which is what’s happened here).
“The only thing we need to now look out for or hope for is that there is substance in Telkom’s arguments (which are yet to come) and that this does not end up a case of clutching at straws and thus a colossal waste of time.”
According to Chireka, most of the industry wants to see this process move on.
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