Just one working day before it was due to take on communications regulator Icasa in a high-stakes, week-long battle in the high court, Telkom has withdrawn its legal action over the recent spectrum auction.

The decision is a significant victory for both Icasa and communications minister Khumbudzo Ntshavheni, and means there is now no risk that the recent spectrum auction will have to be rerun.

Icasa and Telkom agreed in an out-of-court settlement that the regulator will commence with the licensing of spectrum in the 800MHz band that was left unassigned in last month’s spectrum auction and will do so by no later than June. The licensing of the band must also be concluded within Icasa’s current financial year – namely, by 31 March 2023.

“Icasa has undertaken that it will have regard for the outcomes of the recently completed auction in its licensing of the unassigned 800MHz,” Telkom said in a statement.

In a separate statement, Icasa said that it will also license mobile-suitable spectrum that is currently available for licensing (excluding spectrum still set aside for a Woan, or wholesale open-access network, which government looks likely to scrap soon.

Telkom CEO Serame Taukobong said the settlement addresses Telkom’s principal complaints: the restrictions in the spectrum bidding rules and the competitive effect of spectrum arrangements on the auction process.

“The settlement agreement gives challenger operators like Telkom further opportunity to acquire sub-1GHz spectrum to compete with established players,” he said.

‘In good faith’

“Telkom has, in good faith, entered into a forward-looking settlement, providing Icasa the opportunity to resolve current market challenges identified by competition authorities while allowing operators to focus on the business of providing superior service to their customers.”

Icasa, Telkom said, has agreed to conduct a study on the impact of a possible secondary market of spectrum on competition and, if necessary, provide an adequate and enabling regulatory framework.

Icasa chairman said he appreciated the “cordial manner in which Telkom conducted the engagements in pursuance of the settlement and is pleased that the matter can now be concluded”.