After copious delays spanning years, the first stage of South Africa’s long-awaited spectrum auction is now complete.
 
South African mobile operators have long been crying out for additional spectrum from the Independent Communications Authority of South Africa (ICASA), having not been allocated new spectrum licences for around 17 years. 
 
This all changed at the start of the coronavirus pandemic…

After copious delays spanning years, the first stage of South Africa’s long-awaited spectrum auction is now complete.

South African mobile operators have long been crying out for additional spectrum from the Independent Communications Authority of South Africa (ICASA), having not been allocated new spectrum licences for around 17 years. 

This all changed at the start of the coronavirus pandemic, when ICASA announced that it would allocate temporary spectrum licences to the operators. This not only served to alleviate the pressure of network demand during a national lockdown but has since allowed the operators to tentatively launch 5G commercial services. 

These temporary licences were set to expire in November last year, but pleas from the operators have seen the terms extended to June 2022.

Now, with the start of the spectrum auction process, South Africa’s operators will be reliant on this temporary spectrum no longer. 

The auction process is split into three stages, the ‘opt-in’ stage, the auction proper, and the allocation phase. 

The opt-in auction, which began yesterday, has already concluded, with Rain and Telekom emerging as winners; Rain acquired 2x10MHz of spectrum in the 700MHz band, and 10MHz in the 2.6GHz band, while Telkom picked up 2x10MHz in the 2.6GHz band. In total, the pair paid roughly $175 million.

This phase of the auction was intended to allow South Africa’s smaller operators the chance to procure a minimum spectrum portfolio (MSP) of least two 10MHz blocks below 1GHz and 60MHz of spectrum above this frequency, including their pre-existing spectrum holdings. 

As such, only two bidders could win spectrum to achieve the MSP in this auction and the larger operators, MTN and Vodacom, were excluded from taking part. 

The main phase of the auction will begin tomorrow, with all six players allowed to participate. 

“The licensing of this spectrum through an auction has major economic and social benefits for our country, especially during this time when the economy is emerging from the ravages of the COVID-19 pandemic. This process provides a critical stimulus for economic recovery and has the potential to stimulate employment by leveraging on ICT networks and digital platforms to deliver economic value for the South African society,” said Dr Keabetswe Modimoeng, Chairperson of ICASA.

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Since 2010, Brand Finance has been compiling an annual report on the most valuable and strongest telecoms brands. The company has assessed 5,000 of the world’s biggest telecom brands, including the leading 150 in their dedicated report, the Brand Finance Telecoms 150 2022.
 
Brand value is understood as the net economic benefit that a brand owner would achieve by licensing the brand in the open market. Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors.
 
Let’s take a look at some of the most notable results…

Brand value is understood as the net economic benefit that a brand owner would achieve by licensing the brand in the open market. Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors.

Let’s take a look at some of the most notable results. 
 

Most valuable telecoms brand: Verizon 

Verizon takes the top spot again this year, with the company’s brand value rising by 1% to $69.6 billion. This marks the third year running the company has taken first place in the report, having never fallen below third place since the report began.

Verizon’s rival’s Deutsche Telekom (T-Mobile) and AT&T take the second and third place positions, with valuations of $60.2 billion and $47 billion, respectively. 

That the podium spots are dominated by primarily by US brands should come as little surprise. The market is not only huge, it is highly profitable, with mobile and broadband plans in the US some of the most expensive in the world. Despite enormous spectrum auctions and the expensive rollouts of 5G and fibre, the US telecoms market continues to exhibit healthy growth, providing the US operators a fertile landscape in which to grow their brand.
 

Fastest growing brand: Iliad Italia 

Iliad Italia launched in May 2018, becoming the fourth mobile player in the Italian market behind TIM, Wind Tre, and Vodafone. Since then, the company has grown quickly, in summer last year claiming a 10% share of the Italian market just three years after launch. It currently has roughly 8 million subscribers and launched a promising fibre-to-the-home offering earlier this year. 

According to Brand Finance’s report, the brand has risen in value by 109% to $447 million over the past year, making it the fastest growing brand in the telecoms industry. 

In second place is Etisalat (now e&)’s brand Moov, which saw its brand value increase 104% to $453 million in the last year. This rapid rise comes as a result of e& uniting 11 of its African subsidiaries under the Moov Africa banner at the start of 2021.

Strongest telecoms brand: Etisalat 

Using a combination of metrics including marketing investment, stakeholder equity, and business performance, Brand Finance has judged Etisalat to be the world’s strongest telecoms brand in 2022. Etisalat scored 89.2 out of 100 (an AAA rating) based on these metrics, having only broken into the top 20 in 2020.

Etisalat recently rebranded as e&, symbolising its corporate shift towards becoming a global technology and investment conglomerate.

“The transformation of e& from a telecom company founded more than four decades ago in the UAE into a global influence in digitalization highlights its role in upholding the UAE’s sustainable economic development and diversification plans,” said Sheikh Mansour bin Zayed Al-Nahyan, deputy prime minister of the UAE.

Naturally, this increase in brand value was also supported by its unified rebranding of its African assets into Moov Africa, as mentioned previously.

Second place and third place were taken by Swisscom (88.8) and PLDT (88.4) respectively.  

Vodafone NZ has reportedly engaged financial services firms Barrenjoey and UBS to explore the sale of its New Zealand towers.
 
The operator has the largest tower portfolio in the country, with its roughly 1,500 towers providing mobile coverage to around 98% of the population. The company says it remains committed to building additional sites to “maintain its relative coverage and capacity position in the future&”…

Vodafone NZ has reportedly engaged financial services firms Barrenjoey and UBS to explore the sale of its New Zealand towers.

The operator has the largest tower portfolio in the country, with its roughly 1,500 towers providing mobile coverage to around 98% of the population. The company says it remains committed to building additional sites to “maintain its relative coverage and capacity position in the future” as part of the deal, noting that the tower company’s EBITDA for the 2023 financial year is $51 million.

According to sources, the tower sale could be worth up to $1 billion.

Vodafone NZ said that the deal will be beneficial for customers by bringing “more focused investment to the active mobile network assets”, as well as having major benefits for the company’s efficiency and environmental impact.

The announcement should not come as too great a surprise. Investor appetite for mobile towers has been surging around the world for a number of years now, with firms viewing the infrastructure as a reliable long-term investment delivering predictable returns. Meanwhile, operators are keen to offload these passive assets in exchange for cash, helping to lower their debt and fund the further expansion of their expensive 5G and fibre networks.

This trend has certainly been seen in neighbouring Australia, where both Telstra and Singtel have sold all or part of their mobile towers last year.

Indeed, the sale of the Vodafone NZ towers has been rumoured for weeks with Infratil, who owns half of Vodafone NZ alongside Canada’s Brookfield Asset Management, saying in a recent investor call that it was exploring the “possibility of network capital release options”.

« As the necessary infrastructure to support digital economies grows in importance, and as telecommunications companies look to unlock value that can be reinvested, separate ownership of passive mobile tower assets has become increasingly common, » said Vodafone NZ in a statement. 

Vodafone NZ’s rival, Spark, said just last month that it was exploring its own ‘TowerCo’ spin off.

But while these tower deals are becoming increasingly popular, the handing over of towers is not always an easy process. Back in 2020, CK Hutchison announced that it would sell all of its European towers to Spanish infrastructure giant Cellnex for roughly €10 billion. But, while the transition of assets went smoothly in most of the company’s European markets, the deal came under severe scrutiny in the UK market, where the Competitions and Markets Authority (CMA) suggested the deal was uncompetitive and would leave Cellnex in too dominant of a position within the market. 

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