Vodacom: Spectrum auction was pricey, but worth it for faster internet

Major mobile operator Vodacom is set to ramp up the rollout of 4G and 5G networks after buying up additional broadband spectrum amounting to R5.38 billion during the recently concluded auction.

The operator was among six companies that took part in the auction process conducted by the Independent Communications Authority of South Africa (Icasa). Vodacom's rival, MTN, bagged spectrum worth R5.2 billion.

The allocation is set to kick-start a race for new generation technologies market share among the country's network operators, and bolster competitive pricing.

Vodacom CEO Shameel Joosub said that "although the spectrum auction pricing was high" the company was pleased with the outcome of the auction. He said customers can in the coming years benefit from even wider coverage, faster speeds, and enhanced network quality.

"Once the auction process is fully concluded, Vodacom's immediate focus will be on the deployment of valuable spectrum to extend both 4G and 5G network coverage to more parts of the country and improve quality of service while we continue to address the cost to communicate," said Joosub.

Spectrum refers to the invisible radio frequencies that wireless signals travel over. The signals allow mobile communications and are also used for satellite TV, air traffic control, and two-way radios.

Icasa said on Thursday a total of R14.4 billion was raised from the auction, much higher than the R8 billion initially projected.

Telkom took part in the auction despite its pending court challenge of the process. It argues that recent allocation would entrench the dominance of larger companies. Arguments are due to be heard starting early next month.

The spectrum has been allocated for a 20-year period. MTN South Africa said the recent auction increased total permanent spectrum holdings from 76MHz to 176MHz.