South Africa Spectrum Reinvestment Could Transform ICT
South Africa raised R14.4 billion from its 2022 spectrum auction. The money went to the national fiscus. The ICT industry argues it should have come back home. Now, ahead of a new auction, that argument is growing louder.
The Case for South Africa Spectrum Reinvestment
Industry body ISPA argues the fiscus-first model is starving the very sector South Africa depends on for connectivity. The call is for proceeds from spectrum sales to be reinvested directly into the ICT sector rather than absorbed into general government revenue.
The logic is straightforward. Spectrum is a finite national resource. The companies that buy it generate the tax revenue, employment, and digital infrastructure that the country depends on. Therefore, recycling those proceeds into broadband expansion and ICT development creates a compounding return for the economy.
ISPA has stated that the success of the 2022 spectrum auction in raising money for the fiscus is a clear message to the government of the value of ICASA and its central role in South Africa’s digital future.
ICASA has committed itself to preparing and conducting the auction for new high-demand radio frequencies in the 2026/2027 financial year. The regulator received R51-million from the national treasury for the auction.
In addition, the stakes are high. Icasa’s last and only spectrum auction took place in March 2022, raising R14.4-billion for the national fiscus, well above the R8-billion anticipated. Six operators participated: Vodacom, MTN, Telkom, Rain, Cell C and Liquid Intelligent Technologies.
Meanwhile, connectivity gaps remain significant. South Africa still lags in rural broadband access. However, the spectrum auction model has not directed proceeds toward closing those gaps.
Industry stakeholders point to international precedents. Some countries ring-fence a portion of spectrum auction revenue for infrastructure investment, particularly in underserved areas. In addition, proceeds can fund ICASA’s capacity to regulate more effectively.
ISPA proposes that it is an opportune time to undertake a full institutional review of the operation of the communications regulator to increase its effectiveness and delivery in a complicated and evolving sector.
As a result, the South Africa spectrum reinvestment argument is not simply about money. It is about whether the country’s digital economy policy is structured to reinforce itself, or whether it extracts value from the sector and spends it elsewhere. The upcoming 2026/2027 auction will be the clearest test yet of which model government chooses.
