South Africa’s telecommunications operators wants future spectrum auction proceeds reinvested in digital infrastructure, citing the heavy bill that operators continue to carry from 2022.

The Association of Comms & Technology (ACT) – an industry body whose members include South Africa’s biggest network operators – wants money raised in the country’s next spectrum auction reinvested in the ICT sector rather than disappearing into the national fiscus, arguing the current model risks starving the very industry it depends on.

“Spectrum auction funds and spectrum fees paid by operators should ideally be reinvested into digital infrastructure development, broadband expansion, rural connectivity and initiatives aimed at bridging the digital divide,” ACT CEO Nomvuyiso Batyi has told TechCentral.

Batyi said redirecting spectrum revenue away from the ICT sector “may reduce the industry’s ability to accelerate infrastructure deployment” and called for mechanisms to ensure such revenues contribute meaningfully to the development of the digital economy.

The intervention comes ahead of communications regulator Icasa’s next major spectrum auction, earmarked for the 2026/2027 financial year, which ends in March 2027. The bands expected to go under the hammer include 750MHz, 800MHz, 1.5GHz, 2.3GHz, 3.3GHz and 3.5GHz.

Icasa’s last sale, in March 2022, raised R14.4-billion for national treasury, well above the R8-billion the regulator had projected. Vodacom paid R5.4-billion and MTN R5.2-billion for mid-band spectrum suitable for 5G, while Telkom, Rain, Liquid Intelligent Technologies and Cell C also took up assignments.

Heavier bill

But Batyi argued the headline number masks a heavier bill that operators continue to carry. “The implementation cost associated with licence obligations can, in some cases, exceed the cost of the spectrum itself,” she said.

That financial pressure has already produced a high-profile casualty. Cell C acquired 10MHz of bandwidth at 3.5GHz at the 2022 auction at a price of R288-million but, citing liquidity constraints, could not settle the bill. After a payment arrangement with Icasa fell through, the regulator revoked the spectrum in 2024 and can now relicense it.

Read: Why the spectrum gold rush may soon be over

Cell C’s troubles, set against the multibillion-rand cheques written by Vodacom and MTN, illustrate ACT’s broader concern: that once-off, lump-sum payments place “considerable financial pressure on the sector and may reduce the capital available for network investment and infrastructure roll-out”.

ACT wants future processes to consider phased payment structures, allowing operators to prioritise roll-out commitments while still meeting their obligations to the regulator and the state.

Batyi also flagged that several 2022 obligations, including coverage roll-out, mobile virtual network operator hosting and the zero-rating of public benefit content, were neither adequately costed nor sufficiently consulted on at the design stage. In some instances, she said, beneficiaries of those obligations were not engaged before the rules were set.

ACT’s pitch comes at a moment when the global model of selling exclusive spectrum rights to the highest bidder is itself under review.

Speaking at the Wireless Access Providers’ Association’s Wapaloza conference in Johannesburg in June last year, Disruptive Analysis founder Dean Bubley told delegates that spectrum sharing was on track to become the default licensing mechanism, particularly with 6G on the horizon.

“There is more demand than there is supply of spectrum, which means sharing is going to become more important,” Bubley said. “The idea of exclusive licences, or new licences for mobile network operators, is getting towards the end of the road.”

Dynamic Spectrum Alliance president Martha Suarez, also speaking at Wapaloza, said sharing models did not deliver the same upfront windfalls that auctions do but tended to produce larger social and economic dividends over time.

“It is commonly accepted that spectrum is a public resource that is managed by government or by regulators to make the most efficient use of it. We had a time – one that now is passing – where spectrum was seen as a source of income,” Suarez said.

‘Digital inclusion’

She warned that treating spectrum primarily as a revenue line was at odds with policy goals of digital inclusion.

That is essentially the argument ACT is now making to Icasa as the next auction approaches. Batyi said the regulator’s primary objective should not be revenue maximisation, but ensuring spectrum assignment supports investment, coverage, affordability, competition and “long-term digital inclusion”.