South Africa’s Telkom Deals Blow to Ramaphosa’s Reform Plans

(Bloomberg) --

Telkom SA SOC Ltd.'s attempt to prevent South Africa's long-awaited release of additional broadband spectrum risks stalling the momentum of President Cyril Ramaphosa's economic reform agenda.

The company has filed an urgent court application to prevent the regulator, the Independent Communications Authority of South Africa, from auctioning spectrum in March, a move that could further delay attempts to unlock investments in broadband and lower data costs.

Telkom opposes the regulator's decision to include sub 1 Gigahertz spectrum in the auction as it's currently subject to a separate legal challenge, it said in a statement on Wednesday. The court proceeding is set to start March 14 and its outcome “will have a material impact on the availability of spectrum in this band,” it said.

It's also seeking clarity on a directive that would allow smaller telecommunications operators to apply for licenses to be part of a wireless open access network. The policy aims to facilitate market entry for those who are unable to compete for spectrum against bigger operators.

The Minister of Communications and Digital Technologies, Khumbudzo Ntshavheni, will engage Telkom and other stakeholders in a bid to reach an out of court settlement and avoid further delays, her department said Thursday in a statement. Finishing the process to release spectrum by March 31, is important to “reap the benefits of the digital dividend in the country's quest for post Covid-19 pandemic economic recovery, job creation and transforming South Africa into a digital economy,” it said.

Ramaphosa included the spectrum auction in a 2020 plan to revive the coronavirus-battered economy. Other reforms including bolstering electricity generation by independent power producers and steps to ease port congestion are showing progress.