ISPA calls for easier access to licenses to boost South Africa’s ICT sector and BEE efforts

The Independent Communications Authority of South Africa (ICASA) has been urged to make it easier for small businesses, historically disadvantaged people and women to obtain licenses for electronic communications services (IECS) and electronic communications network services (IECNS). According to ICASA’s State of the ICT Sector in SA Report 2022, revenue in the sector grew by just 0.3 per cent last year to R243.5 billion. In 2022, revenue from fixed broadband services and fixed internet decreased by 2.1% and 6.9%, respectively.

The Internet Service Providers Association (ISPA), South Africa’s recognized internet industry representative body with 220 members, is calling for an ‘invitation to apply’ (ITA) for these licenses to be issued by ICASA. This would allow more firms to enter the market and potentially boost GDP and Black Economic Empowerment.

“ISPA wrote to both the Minister of Communications and Digital Technologies and ICASA during October 2020 requesting that they take the simple steps required to make IECS and IECNS licences generally available through a standing ITA. To date, unfortunately, no substantive response has been received,” said Dominic Cull, regulatory advisor to ISPA.

Small and medium-sized businesses are currently restricted in their growth due to their inability to obtain these licenses to expand their offerings. Many have to buy them from existing license holders, which can be a costly and time-consuming process. One black women-owned ISPA member, who wished to remain anonymous, said: “Some current holders of the licences believe it is a ticket for them to get rich if they hold onto the license and sell it to a prospective buyer. The current concept is counterproductive as the sellers want exorbitant prices for the licences, making it difficult for SMMEs to obtain them cost-effectively.”

According to Cull, “SMMEs wanting to grow their footprint have no option but to purchase a licence on a willing seller willing buyer basis and apply to ICASA for a transfer. This costs a significant amount of money – generally, more than ZAR1 million – and the ICASA application process will take a minimum of 5-8 months to be completed.”

ISPA is calling for the authorities to take action and issue the necessary invitations to apply for these licenses. “In ISPA’s view there is no legal impediment to ICASA immediately drafting and finalizing a standard ITA to allow applications for IECS licences. As regards IECNS licences there is a requirement for a simple Ministerial policy directive before a standing ITA can be finalized,” said Cull. “ISPA is again calling on the authorities to issue the necessary invitations to apply so that artificial impediments to growth and empowerment fall in the ICT sector as they are starting to fall in energy,” he concluded.