A South African court on Friday upheld the government's decision to block a tender for 12 billion rand ($850 million) of high-speed mobile broadband licences issued by the telecoms regulator.
The Independent Communications Authority of South Africa (ICASA) took the industry by surprise in July when it opened a tender to interested telecoms firms to bid for broadband licences known as spectrum.
This prompted the Minister of Telecommunications and Postal Services to seek legal action to prevent the auction, saying it was made without consulting the government.
"A further concern is the haste with which ICASA is proceeding to dispose of the spectrum given that this spectrum will not be immediately available," the ministry said in July.
South Africa has pledged to roll out free Wifi services across the country at a cost of around 67 billion rand ($4.7 billion), but access for operators to more bandwidth has been delayed for years.
There are five main firms in South Africa's wireless broadband market, including MTN, Vodacom and partially state-owned operator Telkom.
($1 = 13.98 rand)