South Africa Ministry Seeks Delay to Broadband Spectrum Sale

(Bloomberg) -- South Africa's Telecommunications Ministry filed a suit to block the sale of more than $1 billion of wireless spectrum by the industry regulator, potentially depriving mobile carriers in the country of much-needed capacity to increase high-speed broadband services.

The application, filed Monday by the Telecommunications and Postal Services Department, names industry regulator the Independent Communications Authority of South Africa, and mobile carriers MTN Group Ltd., Vodacom Group Ltd., Telkom SA SOC Ltd. and Cell C as respondents, documents seen by Bloomberg News show. They have until Aug. 26 to show why the order shouldn't be granted by the High Court in Pretoria.

The halt to the sale process “has become necessary in order to prevent irreparable harm which unsuspecting interested parties may suffer in the licensing process which this court could ultimately find unlawful,” the ministry said in the papers.

The proposed auction would prevent new players entering the country and assisting in rolling out high-speed broadband across South Africa, the department said. While the regulator plans to start selling spectrum from early 2017, the department believes the government should wait for the latest policy document, which is expected to be approved by the end of the year.

The intervention could further postpone Icasa's attempts to sell the spectrum after an earlier delay of about five years, partly caused by government deliberations over broadband policy. The move to attract bids from non-government internet providers is designed to help South Africa's governing African National Congress deliver on a pledge 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.

Icasa has proposed selling five blocks of spectrum at a reserve price of 3 billion rand ($210 million) each.

To contact the reporter on this story: Loni Prinsloo in Johannesburg at lprinsloo3@bloomberg.net. To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Hilton Shone, Paul Richardson