South African mobile operator Cell C has launched legal proceedings against the country’s telecommunications regulator, seeking R28.82 million ($1.7 million) in damages linked to the landmark 2022 spectrum auction. The dispute concerns a deposit paid by the company to the Independent Communications Authority of South Africa (Icasa) before bidding for additional radio frequencies.

Icasa disclosed the claim in its 2025-26 annual report, saying its legal advisers were assessing the matter. The regulator said the outcome could not yet be determined and that management had not recognized a provision because a present obligation had not been established. No reimbursement is expected, according to the report.

Inside the deposit dispute

Cell C confirmed that the proceedings concern a deposit paid for spectrum awarded during the March 2022 auction. A company spokesperson declined to discuss the merits of the case because it is before the courts, leaving the precise circumstances behind the claim unclear.

During the auction, Cell C successfully bid R288.2 million ($17.5 million) for a 10-megahertz block in the 3.5-gigahertz band. An industry source said that bidders were required to pay deposits equivalent to 10% of their total bids to participate, matching the amount Cell C is now seeking to recover.

The legal action adds a new dispute to the aftermath of an auction widely viewed as a milestone for South Africa’s telecommunications industry. The sale marked the first major allocation of new spectrum in 17 years, following the previous significant permanent allocation in 2005.

Why the auction mattered

The spectrum release formed part of President Cyril Ramaphosa’s economic reform agenda, which sought to attract private investment, stimulate growth and create jobs. Additional frequencies were expected to ease pressure on mobile networks, improve connectivity, reduce dropped calls and support faster internet speeds, potentially helping lower data costs for consumers.

Six companies participated in the March 2022 auction: Cell C, Liquid Intelligent Technologies, MTN, Rain, Telkom and Vodacom. The process ran for 58 bidding rounds, with the operators collectively spending R14.4 billion ($877 million) to acquire spectrum, according to Icasa. The proceeds went to the national treasury.

Payment pressures resurfaced

Although Cell C paid the deposit, it subsequently struggled to settle the full fees owed for its spectrum allocation amid financial and liquidity pressures. In February 2024, the operator told TechCentral it had agreed to a payment arrangement with Icasa after paying part of the amount due, while negotiations continued over the outstanding balance.

Cell C later voluntarily surrendered a substantial portion of its spectrum holdings to Icasa, saying the frequencies were no longer needed and did not align with its turnaround strategy. The company has stressed that the latest court proceedings are separate from that decision, which involved certain microwave-link spectrum surrendered in 2024.

Cell C seeks separate resolution

Cell C said it continued to value its relationship with Icasa and remained committed to constructive engagement with the regulator and South Africa’s regulatory framework. The court case now places the focus on the disputed deposit, rather than the operator’s earlier decision to relinquish spectrum as it reshaped its network strategy.

Founded in 2001, Cell C is a South African connectivity provider listed on the Johannesburg Stock Exchange under the ticker CCD. The company operates a capital-expenditure-light network model, offering mobile, enterprise and wholesale services as it pursues a more sustainable business structure in a competitive telecommunications market.