The South African Spectrum Auction: An Insider View
A review of the recent South African spectrum auction and the learning for other regulators seeking to award spectrum to support the development of mobile broadband and 5G.
Related insights
Introduction
Coleago Consulting, leveraging its involvement in the ICASA multi-band spectrum auction in South Africa, offers a comprehensive analysis aimed at distilling valuable insights for regulators and bidders across Africa. This paper supplements Coleago’s previous work on spectrum auctions in Tanzania, Nigeria, and collaboration with BOCRA in Botswana on spectrum management.
Overview of ICASA Auction Process and Key Results
The ICASA auction showcased several strengths and some areas ripe for improvement. The process encompassed a high-level review and culminated in significant outcomes. Notable elements contributing to success were the consultative approach, simultaneous spectrum awards, a strategic reserve price, and the engagement of a reputable advisor for effective auction implementation.
Insights for Other Regulators
Commendable Aspects: ICASA’s success underscores the importance of a consultative process, simultaneous awards, strategic reserve pricing, and expert advisory engagement.
Areas for Improvement & Insights: The paper highlights crucial areas for enhancement and learnings beneficial to other African regulators and bidders:
- Actioning legitimate responses from consultation processes is pivotal
- A transparent and straightforward pre-qualification process is essential
- Reducing regulatory uncertainty is vital for confident spectrum valuation
- Ensuring commercially viable coverage obligations and collaborating with the industry to address rural coverage challenges
- Prudent setting of eligibility points for different lots to mitigate bidding risks
- Selection of an appropriate auction format to ensure efficient spectrum assignment
- Introduction of spectrum trading for optimal spectrum utilisation
Conclusion
ICASA’s largely successful auction presents a model for commendable practices while also offering valuable lessons for improvement. The identified insights provide a roadmap for enhancing future spectrum award processes in Africa, enabling regulators and bidders to navigate complexities effectively and achieve more efficient spectrum allocation and utilisation.
Other insights
The Polish 700 and 800 MHz Spectrum Auction: Insights and Global Lessons
Poland’s final low-band spectrum auction marks a pivotal moment in Europe’s 5G rollout, offering key lessons in auction design, cross-border coordination, and strategic spectrum management.
The Case for Strategic Spectrum Renewal
As spectrum licences approach their expiry date, a strategic approach to spectrum renewal is crucial. Traditional presumption of renewal in favour of incumbents may no longer serve the industry’s needs. Instead, a more strategic approach to renewal can optimise spectrum assignments and improve spectral efficiency by up to 40%.
Best Practice Spectrum Management
The principles of best practice spectrum management are well established and their implementation can enhance the socio-economic value of spectrum and how much operators are prepared to pay to acquire new spectrum. Whilst most regulators in developed markets have adopted best practice, the same cannot be said for developing markets. Coleago recently studied the regulatory environments in 16 African markets and recorded the extent to which best practice had been adopted.
Learning From Best Practice Spectrum Management in Botswana
The Botswana Communications Regulatory Authority conducted a review of its spectrum management strategy to align with international best practice. The Authority was advised by Coleago and in this paper, Project Director Graham Friend highlights the lessons to be learned for other regulators in developing markets.
The End of Telecoms History? – Not Quite!
At the European 5G conference, Stefan Zehle highlighted that differences in mobile data usage across countries result from variations in price and network availability. While European policymakers celebrate 89% 5G coverage, gaps in both outdoor and indoor connectivity limit usage. William Webb’s prediction that data traffic will plateau at 20 GB per user per month by 2027 seems unlikely, given that top users already exceed 100 GB. To fully realise 5G’s potential, policymakers must address these coverage issues in a cost-effective manner.
Insights from a Strategic Spectrum Review
The mobile industry has accumulated a fragmented spectrum portfolio, consisting of various frequency bands that are sub-optimally allocated for modern technologies like 4G and 5G. As operators transition from legacy technologies such as 2G and 3G to newer, bandwidth-intensive solutions, the need for contiguous spectrum blocks has become critical.
