Licensing in the ICT sector

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19 Aug 2020

Types of licences available in RSA

Licences are of 2 main categories – class (short term, for smaller areas, cheaper and less onerous) and individual (20 years for ‘telecoms’, 15 years for pay and FTA tv, 10 years for radio). Within these 2 categories there are several types – electronic communications services (ECS), electronic communications networks (ECN), electronic communications network services (I-ECNS), broadcasting (BCS) (sound, TV, low power and community), and postal services.

Separate licences are required for the use of spectrum (RF) for BCS and ECNS.

Obtaining a licence

National policy requires the Minister of Communications and Information Technology to determine if a new individual electronic communications network service (I-ECNS) licence may be awarded. These licences are regarded as the most valuable since they confer the right to build infrastructure across land, and the most contentious for the same reason.

ICASA otherwise has sole responsibility for licensing, and determining conditions and award mechanisms.

Class licences may be awarded on application and registration with ICASA.

Terms and conditions

Licences of the same type typically have the same or similar conditions to ensure parity, however if applicants offer up undertakings, those may form part of their licence conditions. Conditions may also be imposed to achieve policy goals.

Special conditions

Universal service and access conditions are common in licences. They have in the recent past, focussed on accessibility of voice, but obligations to provide data services are now in force to benefit institutions providing basic and higher education. These additional obligations were imposed in 2020, some of them in return for the temporary award of 5G spectrum during the COVID19 lockdown to a handful of licensees.

Licence fees are payable by individual licensees on the basis of gross revenue from licensed activities. Spectrum fees are payable according to a formula for number of links and band types.

If a spectrum auction is held in future, the price achieved on an auction is likely to form the basis of the initial fee for successful bidders.

Transfer of licences or transfer of control of licensees

There are a number of I-ECNS and I-ECS licensees in South Africa, some of which are available for sale. A licence may be transferred on application to ICASA, provided the transferee can show that the result will benefit competition, not harm consumers, and that ownership in the new entity will meet the 30% HDI threshold.

If control of a licence will be transferred from one entity to another, this also requires ICASA’s approval, on application, unless the result is that no shareholder will control the licensee.

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(This article is provided for informational purposes only and not for the purpose of providing legal advice. For more information on the topic, please contact the author/s or the relevant provider.)

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