MTN Group has announced the winning
of a high-demand spectrum by MTN South Africa (MTN SA) to support its 4G and 5G
expansion drive, following the successful conclusion of a landmark Simultaneous
Multi Round Ascending Auction (SMRA) by the Independent Communications
Authority of South Africa (ICASA).
According to a statement issued on
the official website of MTN Group, during the main phase of the auction, that
started on 10 March 2022 and finished after 58 rounds of bidding, MTN SA
acquired a total of 100MHz across the 800MHz, 2 600MHz and 3 500MHz frequency bands
and will pay a total of R5.2 billion for the spectrum.
“This compares favourably with
global benchmark averages of approximately $0.083MHz-POP – according to Coleago
Consulting – for spectrum in similar auctions,” it said.
MTN SA secured the following
spectrum bands in the SMRA: 1. 2 x 10MHz of 800MHz at a price of R2.9 billion
($195.5 million), 2. 4 x 10MHz of 2 600MHz at a price of R1.1 billion ($72.8
million) and 3. 4 x 10MHz of 3 500 MHz at a price of R1.1 billion ($75.1
million)
The company believes this is the
first time in approximately 17 years that spectrum has been released on a
permanent basis in South Africa and increases MTN SA’s total permanent spectrum
holdings from 76MHz to 176MHz. The spectrum has been allotted for a 20-year
period and on a technology-neutral basis. The Group President and CEO, Ralph
Mupita in his remark after the announcement disclosed that the release of
high-demand spectrum is a significant step forward for South Africa in the implementation
of the key structural reforms needed to drive economic growth.
He then commended the ICASA and the
government of South Africa for the bold and transformational decision to
proceed with this auction.
“Securing this high-demand spectrum is
critical in positioning MTN SA, the second-largest operation in the MTN Group,
for sustained and profitable growth into the future. We have secured an optimal
mix of low-band and mid-band frequencies for MTN SA that will support the data
traffic we will carry for
4G and 5G services,” he said.
“In line with our disciplined
capital allocation framework, which prioritizes investment in growth, we have
built up the financial flexibility to be able to fund MTN SA’s spectrum acquisition
through cash and liquidity resources at MTN Group. We expect our holding
company leverage to remain within our guidance targets, following the
acquisition of this spectrum. We have
secured this spectrum at a cost that
is value accretive for our providers of capital, when you compare against
global benchmarks,” he added.
Speaking on the auction, MTN SA CEO,
Charles Molapisi said “this is a significant milestone and achievement, not
only for MTN SA and the telecommunication industry at large but also for South Africa’s
digital future. Spectrum is the lifeblood of our industry and is key to
reliable and extensive connectivity for our customers across the country”
“Our multibillion-rand investment
into thismuch-needed spectrum is also an important injection of cash into the
national fiscus. In anticipation of the spectrum allocation, we had undertaken
a modernisation of our network to ensure that we would be ready to leverage
this spectrum to the connectivity benefit of South Africans as quickly as
possible,” he adds.
Molapisi further said MTN SA will
use the spectrum to expand 4G and 5G connectivity, as well as the capacity, on
South Africa’s best network while also further enhancing rural, peri-urban, and
urban network coverage. The spectrum allocation will also allow for greater
value for customers, supporting MTN’s consistent push in recent years to lower
the cost to communicate.
He also pointed to the use of
temporary spectrum as a case study of how MTN SA would use its allocated
spectrum and acknowledged how ICASA’s allocation of temporary spectrum during
the national state of disaster gave MTN SA extra network capacity to provide
more than four million people access to free health and education websites each
month.
“MTN SA will continue to make this
provision with the permanent award of spectrum and will expand access to
include additional public service websites, as per the conditions set out for
this auction,” he stressed.
‘We congratulate the Minister of
Communications and Digital Technologies, Khumbudzo Ntshavheni, and our regulator,
ICASA, on this momentous achievement in the history of our country”, commented Molapisi.
By: Kanto Okanta
