Telkom is not abandoning its challenge to the Spectrum Auction that was held last week, and has warned that its hearing could impact the auction results.

This is despite the fact that the telecommunications provider obtained 20MHz of 800MHz and 22MHz of 3500MHz for a total of R2,1-billion at the auction.

The Independent Communications Authority of South Africa (ICASA) has confirmed that the auction fee is due within 30 working days, comprising the full amount relating to 3500MHz and the proportional payment for 800MHz that is immediately available.

ICASA will communicate an update on the full availability of the 800MHz after 1 July 2022.

Telkom has communicated to shareholders that a payment of R1,1-billion is expected to be made in the current financial year, which will impact the current year’s debt level, capex spend and Free Cash Flow (FCF).

The company believes that the long-term strategic benefits of the spectrum acquisition outweigh the short-term financial impact. “Since inception, Telkom Mobile has not owned sub 1 GHz spectrum,” according to a statement from Telkom. “The 20MHz of 800MHz, once available, will enable more efficient network deployment, increased coverage and capacity on the mobility layer (FDD) resulting in improved user throughput and experience particularly in rural areas.”

It adds that the acquisition of 22MHz of 3500MHz will enable Telkom to advance an enhanced 5G position through combining its existing 28MHz of 3500MHz to achieve a total of 50MHz contiguous spectrum in this band.

However, Telkom stresses that, while it was able to secure the much-needed sub 1 GHz in the spectrum auction, it was constrained it its ability to acquire the amount of spectrum that we need to compete effectively.

“To secure its ability to compete effectively in the mobile market, Telkom persists with its court application to ensure that the licensing of spectrum promotes effective competition in the mobile market in line with the objective of the Electronic Communications Act,” the statement reads.

“Telkom’s application is set down for hearing on 11 to 14 April 2022 and the outcome may impact the auction and its outcome.”