Telecom operators Telkom and Rain Networks won the first round of South Africa’s radio frequency spectrum auction, jointly spending R2.7 billion for low frequency bands ideal for indoor coverage, Icasa said on Tuesday.

Telkom, in which the government holds a 40% stake, agreed to pay R1.5 billion for two chunks of 10 MHz in the 800 Mhz band, while Rain, 20.26% owned by billionaire Patrice Motsepe’s African Rainbow Capital Investments AILJ.J, will pay R1.2 billion for two chunks of 10 MHz in the 700 Mhz band and 10 MHz in the 2.6 GHz band.

For both operators, it’s the first time they will have access to frequencies below 1 GHz, crucial to provide better internet services in underserved and rural areas and better indoor coverage as such frequencies are able to penetrate building walls and underground structures.

Even though there were four bidders who were eligible to bid in the opt-in round, only three bidders submitted valid bids, namely Cell C, Rain Networks and Telkom, the regulator, the Independent Communications Authority of South Africa (Icasa) said.

“Operators have been spectrum constrained for a long time and the authority has complete faith in this licensing process in that this much-needed stimulus output will translate into greater investment in broadband infrastructure and economic growth for the country,” the regulator added.

Operators have waited more than 15 years for spectrum licences that are needed to lower data costs, roll out 5G and add 4G network capacity as the process was slowed by years of legislative delay.

The main auction stage will commence on March 10, the regulator said, with the country’s big two operators MTN and Vodacom joining the four bidders that also include Liquid Telecoms.

Icasa said it is proceeding with the auction despite Telkom’s litigation against it. Telkom accused the regulator of licensing spectrum “unlawfully.”

A hearing on the matter is set for mid- April.