A clause in the Electronic Communications Amendment Bill seeking to force mobile network operators to share unused high demand spectrum with smaller players is raising eyebrows in the sector.
The Amendment Bill, introduced in Parliament last week, seeks to open up infrastructure, force competition and accelerate network rollout in a sector long criticised for high costs and limited access.
The reforms follow years of scrutiny into South Africa’s data market, including findings that limited competition and high input costs have contributed to elevated data prices for consumers.
At the centre of the bill is a new “use it or share it” rule for radio frequency spectrum – the backbone of mobile communication. Under the proposal, operators that fail to use assigned spectrum within a set period can be compelled to share it with other licensed players.
The clause seeks to empower telecoms regulator Independent Communications Authority of South Africa (Icasa) to reallocate radio frequency spectrum assigned in 2022 after a contentious auction, but still remains unused after the commencement of the Amendment Bill, to a secondary licensee under the “use it or share it principle”.
South Africa’s long-delayed spectrum auction took place in March 2022 after legal challenges stalled the original 2021 plan. It raised nearly R14.5-billion, with Vodacom and MTN each spending about R5-billion to secure spectrum for 4G and 5G expansion.
Icasa had initially intended to auction spectrum in bands 700MHz, 800MHz, 2.3GHz, 2.6GHz, and 3.5GHz in March 2021, but a legal challenge initiated by Telkom and e.tv over fairness delayed the process.
The Association of Comms and Technology (ACT), a lobby group for the telecoms sector, has taken issue with the proposed “use it or share it” clause contained in the Amendment Bill, warning it could deter investment if it is applied recklessly.
ACT CEO Nomvuyiso Batyi told Sunday World the organisation was approaching the proposal with caution, “mindful of the potential unintended consequences if it is not carefully designed and clearly scoped”.
“While the objective of ensuring the efficient use of scarce public resources is well understood, the principle must be implemented in a manner that provides regulatory certainty, respects the rights granted under licences, and avoids creating conditions that could inadvertently deter investment,” said Batyi.
ACT members include Vodacom, Cell C, MTN and Telkom.
Batyi said any plans to reallocate unused spectrum should take into account protection of property rights enshrined in the constitution.
“Notwithstanding, we understand that a license granted under the Electronic Communications Act does not confer absolute ownership of the underlying resource, it nevertheless grants legally recognised rights to the licensee.
“From a constitutional perspective, those rights attract protection under Section 25 of the Constitution, which requires that any deprivation of property occur in terms of a law of general application and must not be arbitrary,” Batyi said.
The view was supported by legal experts at Webber Wentzel. In a recent article, partners at the firm – Peter Grealy, Karl Blom, Livia Dyer, Wendy Tembedza – warned that Icasa “may withdraw a licence granted to a secondary licensee if the primary licensee demonstrates to the regulator reasonable satisfaction that it requires the unused spectrum to deploy its electronic communications network in the relevant area within the next twelve months”.
“Icasa must provide the secondary licensee with at least twelve months’ written notice of its intention to withdraw the licence,” they wrote.
- The Electronic Communications Amendment Bill proposes a “use it or share it” rule, compelling mobile operators to share unused high-demand spectrum with smaller players to boost competition and network rollout.
- The bill empowers Icasa to reallocate unused spectrum from the 2022 auction to secondary licensees, aiming to address issues of limited competition and high data costs in South Africa.
- The 2022 spectrum auction raised R14.5 billion, with major players Vodacom and MTN each spending about R5 billion, following delays caused by legal challenges from Telkom and e.tv.
- The telecom industry lobby group ACT, representing major operators including Vodacom and MTN, warns the clause could deter investment if implemented without clear regulatory certainty and constitutional safeguards.
- Legal experts highlight Icasa’s ability to withdraw reallocated spectrum licenses with notice if the primary licensee needs it, emphasizing the importance of balancing spectrum use rights with constitutional property protections.
A clause in the Electronic Communications
At the centre of the bill is a new “use it or share it” rule for radio frequency spectrum – the backbone of mobile communication.
Icasa had initially intended to auction spectrum in bands 700MHz, 800MHz, 2.3GHz, 2.6GHz, and 3.5GHz in March 2021, but a legal challenge initiated by Telkom and e.tv over fairness delayed the process.
ACT CEO Nomvuyiso Batyi told
“While the objective of ensuring the efficient use of scarce public resources is well understood, the principle must be implemented in a manner that provides regulatory certainty, respects the rights granted under licences, and avoids creating conditions that could inadvertently deter investment,” said Batyi.
ACT members include Vodacom, Cell C, MTN and Telkom.
Batyi said any plans to reallocate unused spectrum should take into account protection of property rights enshrined in the constitution.
“
“From a constitutional perspective, those rights attract protection under Section 25 of the Constitution, which requires that any deprivation of property occur in terms of a law of general application and must not be arbitrary,” Batyi said.
“Icasa must provide the secondary licensee with at least twelve months’ written notice of its intention to withdraw the licence,” they wrote.
