Liquid Intelligent Technologies will use its cellular network capacity to build a 5G network for industries such as manufacturing and mining, reports the Sunday Times.
In March, the company offered R111 million to acquire 4 megahertz (MHz) of spectrum in the 3500 MHz band.
Spectrum is the raw network capacity that cellular operators use for mobile devices to communicate with their towers.
After years of delay, the Independent Communications Authority of South Africa (Icasa) held an auction for some of that valuable wireless network capacity.
Liquid’s spectrum purchase at the auction brings its holdings in the 3,500 MHz band to around 60 MHz.
Although this is a significant amount of spectrum in a single band, the International Telecommunication Union recommended that operators have 100 MHz of contiguous spectrum in 3,500 MHz for 5G.
The rest of the unallocated frequencies in this band have been purchased by Telkom (22 MHz), Cell C (10 MHz), MTN (40 MHz) and Vodacom (10 MHz).
Liquid CEO Deon Geyser told The Sunday Times that they deliberately bid for a small portion of the spectrum.
Geyser said Liquid has a different business model than players such as Vodacom, MTN and Telkom.
“While wireless is important, we have a fiber and data center strategy,” Geyser said.
He said they see the substantial investment other operators have made in spectrum as an opportunity.
Icasa raised just under R14.5 billion for the national treasury with the auction.
Vodacom offered nearly R5.4 billion for 110 MHz of spectrum, MTN offered nearly R5.2 billion for 100 MHz and Telkom offered R2.1 billion for 44 MHz.
Liquid sees this as an opportunity for growth as they supply fiber to towers across South Africa, Geyser said.
For its own 5G network, Geyser said it sees opportunity in manufacturing plants, ports and mining, particularly in automation.
Geyser said Liquid does not plan to re-enter the consumer market directly, as it would require significant investment in a product distribution platform.