The Independent Communications Authority of SA (Icasa) and partially state-owned Telkom have smoked the peace pipe, after talks that led to Telkom dropping litigation over the spectrum auction.

The parties said on Friday they had agreed to an out-of-court settlement bringing an end to the legal action over the licensing of high demand spectrum.

Telkom said the settlement paved the way for telecom companies to focus on their businesses.

“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 customer,” Telkom said in a statement. 

Telkom had approached the court to declare the spectrum auction invalid, saying it would create an uneven playing field in the telecom sector. The case was due to be heard from April 11 to 14.

Icasa chairperson Keabetswe Modimoeng said he valued the cordial manner in which Telkom conducted the engagements in pursuance of the settlement and was pleased the matter could now be concluded.

 “We are indeed happy to have reached this stage with Telkom. This is indeed an epitome of the power of cordial dialogue where everyone has the same vision of building an inclusive digital society. We look forward to a new chapter of our public interest regulatory work with this litigation finally behind us,” said Modimoeng.

Telkom said the settlement addressed the unfair restriction on it to bid for spectrum in the past auction and the need for Icasa to consider the competitive effect of spectrum arrangements in the licensing of unassigned spectrum.

It said the parties had agreed that Telkom will withdraw the court application and that each party will pay its own legal costs.

In return, Icasa has undertaken to:

— commence with the licensing of the spectrum that remained unassigned in the auction by no later than June 30 and conclude it within the current financial year;

-in its licensing of the unassigned 800MHz, it will have regard to the outcome of the auction, the imbalances in the sub-1GHz and the need to promote competition in the post auction dispensation;

— and 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 said it would consider the spectrum holdings emanating from the recently concluded auction, including the imbalances in the sub-1 GHz bands, and the impact of the outcome of the auction on competition in the mobile market.

The licensing process is expected to be completed by the end of March 2023, said Icasa.

Icasa said it had also undertaken to conduct an inquiry into the existence of a secondary market for spectrum.

“This inquiry will consider the findings of the mobile broadband services inquiry as well as the outcome of the recently concluded auction and any spectrum arrangements emanating therefrom.

“The inquiry will include the assessment of whether there is a need for regulatory intervention”.

Last month Icasa concluded the high-demand radio frequency spectrum auction involving Cell C, Liquid Intelligent Technologies, MTN, Rain Networks, Telkom and Vodacom.

The auction generated than R14.4 bn in revenue — a boost for the national fiscus.

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