Connecting Africa is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 3099067.


SA spectrum auction beats $530M target, WOAN project shelved

Article Image
With the results continuing to flow in from South Africa's long-awaited 4G and 5G spectrum auction, the Independent Communications Authority of South Africa (ICASA) says it has already surpassed its projected proceeds from the spectrum sale, topping the R8 billion (US$530 million) mark.

In a related announcement, the SA government said it will shelve plans for a wireless open access network (WOAN), a controversial project which has been in the works for years and which was supposed to get its own block of spectrum.

Last week, Connecting Africa reported that the opt-in phase of the spectrum auction on March 8, 2022 had brought in almost R2.7 billion (US$176.3 million) from successful bidders Rain and Telkom.

ICASA has now confirmed that it has surpassed the estimated R8 billion proceeds from the auction after the "main stage" auction kicked off on March 10 and continues today.

"Generally, spectrum auctions of this nature can take weeks to clear. However, the Authority will announce the winning bids attained by each bidder at the end of the auction stage," ICASA said in a statement.

South Africa has been waiting for over a decade for more high-demand spectrum to become available, and ICASA is auctioning spectrum in the 700MHz, 800MHz, 2.6GHz and 3.5GHz bands.

"The licensing of high demand radio spectrum will improve the ability of mobile telecommunications operators to build robust telecommunications with greater penetration and reach. Great benefits of this long-awaited process include the reduction of the costs of data and voice communication," SA's Cabinet said last week.

WOAN support wanes

The SA government has also backtracked on plans to launch a WOAN a scheme that it hoped would increase competition in the mobile market by offering a wholesale open access model.

Cabinet last week approved amendments to the policy on high-demand spectrum and the policy direction on the licensing of a WOAN.

"The proposed amendments remove the requirements to license the WOAN," a statement following a Cabinet meeting on March 9, 2022, confirms.

The WOAN can be a confusing proposition for those who have not been following its developments over the past few years. The idea goes back to 2016, when the SA government announced a radical shake-up of the spectrum policy framework and called for an 'open access regime' in the shape of the WOAN as a "public-private sector-owned and -managed consortium."

The WOAN was to function as a national wholesale network. Retail service providers would be able to piggyback on it and buy access to the network and then sell consumer products to the local market.

"The purpose of the WOAN was to promote new wireless broadband technologies with a network operator focussing essentially on rollout and coverage in affluent areas as well as underserved areas. At the same time, WOAN aimed at reducing capex for existing service providers," said Thecla Mbongue, senior research analyst for Africa markets at Omdia.

"The WOAN could have improved coverage in rural and underserved areas and also enabled a faster availability of the latest technologies on each network," she added.

"The commercial operators are more than capable of providing universal services in SA without the WOAN. In all likelihood, there will be obligations imposed on the operators who receive spectrum through the auction process," Dobek Pater, director for business development at Africa Analysis, told Connecting Africa.

He said the obligations will likely include such things as hosting of retail service providers like mobile virtual network operators (MVNOs) and promises to provide good quality population coverage and a more competitive market at the retail level.

More spectrum up for grabs

Pater said that with the WOAN shelved, the spectrum initially allocated to the WOAN should now be available to the commercial operators participating in the auction, unless ICASA decides to keep this spectrum "in reserve" to assign at a later stage.

ICASA had already postponed the licensing of spectrum for the WOAN until May 2022, and was planning on giving it allotments of spectrum in the popular bands of 700MHz, 2.6GHz and 3.5GHz.

SA's big operators would also have been on the hook to buy at least 30% national capacity from the WOAN collectively as soon as the WOAN was operational and for a period of seven years.

Pater said that forcing operators to buy capacity from the WOAN would have probably reduced the capex on their own new infrastructure builds, or delayed it, possibly resulting in slower new 4G and 5G deployments.

"This could have possibly negated some of the expected positive impact of the WOAN," he said.

Want to know more about 4G and 5G in Africa? Check out our dedicated 4G/5G content channel here on Connecting Africa.

"Service providers tend to favor running their own networks by themselves. Even if sometimes, they outsource the network management to infrastructure suppliers or they partner with other networks for site sharing or national roaming in underserved areas, they still have control on their technology rollout strategy," added Mbongue.

Market failures

The WOAN met with resistance from the start, with many industry insiders and analysts criticizing the vague policy and questioning whether it would work in SA, after a number of failed attempts in other countries.

"We only have examples where it has not worked," said Pater. "The latest is the Red Compartida in Mexico. It looked like a possibly successful WOAN case until the operator declared bankruptcy in 2021."

"In Rwanda, there is a national wholesale 4G network (essentially a WOAN) but for several years after its implementation it remained significantly under-utilized as wholesale prices were too high for most retail service providers to be interested. The government of Rwanda has been trying to address this situation," he added.

Related posts:

*Top image source: pelegraphy on Pixabay.

Paula Gilbert, Editor, Connecting Africa

Innovation hub


Orange Ventures, Digital Africa promise more funding for startups

Orange Ventures and Digital Africa are teaming up to invest more in tech startups in Africa and the Middle East through Digital Africa's Fuz program and the Orange Digital Center network.


Hot startup of the month: Rwanda's Ampersand

Connecting Africa's hot startup this month is Rwanda's Ampersand, which designs, builds, and manufactures electric motorcycles and battery packs for motorcycle taxis.

More Innovation hub

Latest video

More videos

Partner perspectives

All Partner Perspectives

Sponsored video

More videos

Follow us on X

Industry announcements

More Industry announcements

Upcoming events

Africa Tech Festival 2024
November 11-14, 2024
Cape Town, South Africa
More Upcoming events

Africa Tech Perspectives


Uber's Marjorie Saint-Lot on inclusion and sustainability in Africa

Uber's Country Manager for Ghana and Cote d'Ivoire, Marjorie Saint-Lot, shares how the ride-hailing company is approaching public-private partnerships, environmentally friendly initiatives and gender inclusion in Africa.


The 100 most influential African leaders in 2023

A new report from Africa Tech Festival and Connecting Africa puts a spotlight on the top 100 African leaders in the telecoms and technology sector in 2023.


Deep dive into East Africa's tech startup ecosystem

New survey reveals a lack of access to investors, reliance on international VCs and global recession trends as the biggest barriers for East African tech startups to access funds.

More Africa Tech perspectives

Guest Perspectives


Omdia View: April 2024

By Omdia Analysts

April 2024's telecoms highlights in the Middle East and Africa included a license for Starlink in Ghana, new mobile termination rates in Ethiopia, and 6G trials in Bahrain – that and more in the latest Omdia View.


Leveraging agritech to build resilience against climate change

By Francis Hook

ICT analyst Francis Hook discusses agritech in Africa and how the agricultural sector is using technology to build resilience against the negative effects of climate change and to ensure food security.

More Guest Perspectives

Like us on Facebook

Newsletter Sign Up

Sign Up
Tag id test-002