Cell C network and spectrum licence transfer of control gets public hearing – MyBroadband

The Independent Communications Authority of South Africa (Icasa) will hold public hearings on Thursday, 19 September 2024 relating to Cell C’s applications to transfer the control of its licences to The Prepaid Company (TPC).

In a notice in the Government Gazette regarding the public hearings, Icasa notes that Cell C has withdrawn its application to transfer its 10MHz in the 3,500MHz radio frequency spectrum band it acquired through the 2022 spectrum auction.

“Therefore, the hearings will not address this issue,” it added.

Cell C recently confirmed that a payment arrangement it believed it had in place with Icasa over this spectrum had fallen through.

It had bid R288 million on the frequencies and had only paid a deposit so far. Therefore, it has forfeited this spectrum and returned it to Icasa.

However, Cell C said it was working with the regulator and hopes to secure the spectrum through a new process.

The rest of Cell C’s substantial pool of spectrum assets remains part of the transfer of control application.

In December 2023, Icasa published a notice of Cell C’s applications to transfer its Individual Electronic Communications Service (I-ECS), Individual Electronic Communications Network Service (I-ECNS), and spectrum licences to TPC.

TPC is a subsidiary of Blue Label Telecoms and Cell C’s largest shareholder.

Cell C applied to transfer its 2100MHz, 900MHz, and 1800MHz spectrum licences, which make up all of its premium raw wireless network capacity.

According to the authority, Cell C submitted the applications in September 2023.

“In terms of the notice, the authority invited interested parties to make written representations in response to the applications within 14 working days from the date of publication of the notice,” Icasa explained.

After extending the deadline for submissions to 22 January 2024, Icasa received several representations from stakeholders who expressed interest in making oral representations.

Cell C had until 15 March 2024 to submit its written response to the various representations submitted by stakeholders. It submitted its responses on that day.

Its I-ECNS licence allows Cell C to build, operate, and provide wholesale access on its own physical network infrastructure.

The I-ECS licence lets Cell C sell telecommunications services directly to end-users.

The news raised concerns that Blue Label Telecom was attempting to secure one of Cell C’s most valuable assets — its spectrum — if the mobile operator were to go bankrupt.

However, the two companies have repeatedly assured this isn’t the case.

A Daily Investor analysis from September 2023 estimated that Cell C’s spectrum is valued at between R3.8 billion and R6.2 billion.

CellSAf, one of Cell C’s oldest shareholders, objected to transferring control of Cell C’s licences to TPC.

CellSAf director and company secretary Nomonde Mabuya said the company didn’t support Cell C’s decision to transfer its licences.

She added that CellSAf hadn’t been consulted regarding the transfer and that the application had been submitted without its knowledge.

“This licence transfer matter was never discussed with us. The first time we learned about it was when we saw the ICASA government gazette published on 6 December 2023,” said Mabuya.

CellSAf said it was particularly concerned that Cell C and Blue Label Telecom kept the application from it despite the companies regularly engaging with one another.

Mabuya said they had submitted their objection to Cell C’s planned licence control transfer to Icasa through their legal team on 29 December 2023.

She said CellSAf is concerned that Blue Label is stripping other shareholders of Cell C’s critical strategic assets, including transferring control of its spectrum license.

Cell C explained that it was legally obligated to transfer these assets due to amendments to the Electronic Communications Act in 2014, which differentiate between ownership and control of a licence.

After receiving a further cash injection from TPC, Cell C’s largest shareholder wants to take a controlling stake in the company, which they said triggered the transfer of control application.