South Africa to Sell Broadband Spectrum After Five-Year Delay

  • Five blocks of sprectrum to be sold at 3 billion rand each
  • Deal to attract industry investment, boost economic growth

South Africa started the process of selling broadband spectrum after a delay of about five years, taking a step toward extending high-speed internet to rural areas and boosting economic growth.

Telecommunications companies such as Vodafone Group Plc’s local unit and MTN Group Ltd. have been invited to apply for spectrum to provide mobile-broadband services, the Independent Communications Authority of South Africa said in an e-mailed statement on Friday. The government is selling five blocks at a reserve price of 3 billion rand ($209 million) each, the regulator said.

The licensing will help promote investment in the technology industry and improve quality and affordability of services, ICASA said. Wireless operators have been clamoring for more spectrum to expand broadband as stiff competition and tight regulation hampers growth in phone services. South Africa’s governing African National Congress has pledged to extend broadband access to every household by the end of this decade, improving connectivity in one of the world’s stragglers in internet access.

The licensing of new spectrum will allow operators to roll out networks “more efficiently” and “provide better quality mobile broadband services,” Dobek Pater, managing director of Africa Analysis in Johannesburg, said in e-mailed comments. “Ultimately, it would allow South Africa to reach targets of ubiquitous, good quality broadband services.”

The offer of spectrum was delayed for reasons including the length of time it took the government to publish broadband policies and the slow pace of deliberations over how to conduct the process, Pater said.

Vodafone’s Vodacom Group Ltd. planned to expand its internet offering with the 7 billion-rand ($489 million) acquisition of Neotel Pty Ltd. from Tata Communications Ltd. of India, yet walked away from the deal in March after two years of regulatory and legal battles. The Johannesburg-based company has since said it’s considering a bid for unprofitable state-owned Internet company Broadband Infraco.