We supported a South African mobile operator throughout its participation in an auction of high-demand spectrum (700MHz, 800MHz, 2.6GHz and 3.5GHz)

The problem

• South African regulator ICASA was preparing for a long-awaited award of spectrum in the 700MHz, 800MHz, 2.6GHz and 3.5GHz bands by means of a simultaneous multiple round ascending (SMRA) auction 
• One mobile network operator, which had never previously participated in a spectrum auction, sought Analysys Mason’s assistance on qualification to enter the process, valuation of the spectrum, formulation of its bid strategy and participation in the auction itself

The solution

• We provided assistance over a period of ~18 months, including:
  • creation of a business plan for monetising the spectrum
  • drafting large parts of our client’s formal application to take part in the auction (for which it received the maximum score of 100)
  • comprehensive valuation across all possible spectrum packages, focusing on the value of different combinations of spectrum licences, both to our client and its competitors
  • responding to two rounds of regulatory consultation on the auction design and reserve prices
  • detailed auction strategy preparations (building on our previous spectrum valuation work), training the bid team through a series of mock auctions, and drafting an auction playbook
  • support on securing the necessary financing to take part in the auction
  • live support in the ‘war room’ throughout the auction

Figure: Schematic diagram of bidder options in each round

The result

We helped our client to secure spectrum within its budget, enabling it to continue providing effective competition in the South African market