Telkom has asked the high court in Pretoria to impose a “structural or supervisory” interdict on communications regulator Icasa as the partially state-owned telecommunications operator seeks changes to South Africa’s spectrum licensing process.

“Since 2010, Icasa has proven that it is unwilling to conduct the licensing of spectrum lawfully,” Telkom regulatory affairs chief Siyabonga Mahlangu has charged in the latest filing against the regulator. Telkom has secured a mid-April date for the matter to be heard on its merits on an urgent basis.

Telkom’s request for a structural interdict would put Icasa under the supervision of the court and, if granted, would serve to embarrass the regulator.

Lodged on Monday ahead of the high-stakes court hearing scheduled for next month, Telkom has used Mahlangu’s responding affidavit to challenge many of the assertions put forward in court papers by Icasa and communications minister Khumbudzo Ntshavheni, as well as by competitors Vodacom, Rain and MTN.

The filing comes in the same week as Icasa moves ahead with the auctioning of broadband spectrum in the 700MHz, 800MHz, 2.6GHz and 3.5GHz frequency bands. Telkom is one of six participants in the auction. It’s expected the licensing process will be completed this week, though its outcome is still in jeopardy given Telkom’s court action. There is a risk that if the high court finds in favour of Telkom, the auction will have to be rerun at a later date – and at great cost.

Mahlangu has claimed in Telkom’s latest court papers that Icasa has “proven it is not willing to comply” with a previous court order, handed down in September 2021, in the long-running spectrum licensing saga.

“Thus,” Mahlangu said in the papers, “a structural or supervisory order would ensure that Icasa does not adopt an opportunistic interpretation of this court’s order to avoid complying with its statutory and constitutional obligations”.

‘Just and equitable’

“A structural or supervisory order would not be intrusive because it would merely direct Icasa to comply with its positive obligations, which are clearly stipulated in the applicable regulatory framework,” Mahlangu said. “Icasa’s continued failure to comply with its obligations has resulted in an unnecessary delay in the licensing of spectrum. It is just and equitable for this court to intervene in the circumstances.”

Telkom has objected to the way Icasa has proceeded with the spectrum licensing process on several grounds, including that:

The regulator “failed” to conduct a new competition assessment, including allowing affected parties a meaningful opportunity to comment. Instead, it relied on “outdated” assessments in designing its ITA, Mahlangu said. “The failure to conduct a competition assessment means Icasa could not properly achieve its statutory obligation to promote effective competition in the mobile services market.”
Icasa failed to consider properly the impact of industry spectrum arrangements, such as the one between Vodacom and Rain, which Telkom said should be dealt with before new spectrum can be licensed. Telkom said the commercial arrangement are not simple roaming deals and have served to give more Vodacom and MTN, the two biggest market players, an unfair advantage.
The licensing of spectrum for a wholesale open-access network, or Woan, which Telkom says are “interlinked” and therefore cannot be dealt with separately. “Given the linkages, the rational and competent thing to do, even now, would be to complete the Woan-related studies with an open mind and maximal flexibility to change the paramaters of both the IMT (mobile broadband spectrum) and Woan processes to maximise the chances of a value-maximising Woan and value-maximising IMT auction,” Mahlangu said. “A delay to accommodate this study would not cause any fatal damage to the South African mobile market. Nor would it confer any lasting advantage to Telkom.”
The 700MHz and 800MHz bands – the “digital dividend” bands that will be released for mobile broadband through the long-delayed migration from analogue to terrestrial television – are not yet ready for mobile use and won’t be for some time. Telkom said the 31 March 2022 target of completing digital migration is “highly unlikely” to be achieved, despite promises by communications minister Khumbudzo Ntshavheni. This means Telkom and other operators that are licensed to use frequencies in these bands in the auction, and for which they’ll have to pay, won’t have full access for an undetermined period to come. Telkom said Icasa’s decision to include these bands in the auction is “unlawful” under the Electronic Communications Act. “It is manifestly irrational to continue with the auction knowing the spectrum is not available,” said Mahlangu.