Press release: ISPA Welcomes Conclusion of Licence Conversion Process

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The Internet Service Providers’ Association of South Africa (ISPA) welcomes the long-awaited conclusion of the conversion of value-added network services licences into electronic communications network services (ECNS) and electronic communications service (ECS) licences.

ISPA, the biggest representative body of telecommunications licensees of any type in Africa, extends its congratulations to the new ECNS and ECS licence holders. ISPA and its members look forward to ICASA finalising several outstanding issues including the allocation of frequency spectrum, backlogged number applications, local loop unbundling (LLU), and geographic number portability.

In particular, the telecommunications regulator needs to define realistic cost structures for these new licences as soon as possible. Draft regulations set fees at 3% of the licensee’s gross revenue, which is 30 times more than service providers paid as VANS. There is a risk that an extreme hike in licencing fees could force operators to pass costs onto consumers. Service providers need certainty around this issue as soon as possible so as not to delay their network rollout plans.

Mike Silber, regulatory advisor to ISPA, said: “Now that licence conversion has set the basis for full infrastructure and service competition, ICASA needs to focus on how to ensure that new entrants rapidly build networks that reach end-users. We are heartened by the progress being made with regard to LLU and carrier pre-selection, both of which will result in far greater choice for consumers.”

ISPA believes that the granting of these new licences to as many as 533 former VANS licensees is a vital first step in ushering in a new era of competition that will give South African businesses and consumers a wider choice of providers at lower costs.

“ISPA is delighted that ICASA has met its licence conversion deadline as defined in the Electronic Communications Act. We believe that the issuing of these highly anticipated licences marks a sea-change for the telecom industry that will benefit telecoms users and the industry alike,” added Silber.

“We hope that ICASA will tackle the outstanding issues promptly and thoroughly so that our members can deliver innovative new services and infrastructure to the many South Africans who will benefit from greater choice, improved service delivery and more affordable communications.”

The issuing of these new licences follows a High Court ruling, finalised on 21 November 2008, that effectively meant that South Africa has one of the most progressive telecoms licensing frameworks in the world. This High Court judgment found that VANS licensees have had the right to build their own network infrastructure in competition with the incumbent operators since February 2005.

“South Africa’s telecom market has been stifled for years by the failed government policy of managed liberalisation,” said Silber. “ISPA and its members are now eager to demonstrate how a competitive environment will benefit businesses and consumers by lowering the costs and improving the accessibility of telecom services.”

Even in a competitive environment, government companies and agencies are able to address the areas that the private sector neglects in line with government’s development goals, he added. “International experience shows that teledensity increases and telecom prices drop in a competitive environment. We are confident that this experience will be replicated in South Africa,” concluded Silber.

Further Information

For further information, please contact the ISPA secretariat on the Contact ISPA page.