DLA Piper Intelligence

Telecommunications
Laws of the World

Overview of legal landscape

South Africa
South Africa

Telecommunications services in South Africa are regulated by the Independent Communications Authority of South Africa (ICASA) which was established by the Independent Communication Authority of South Africa Act of 2000, as amended in 2014 ('ICASA Act').

ICASA is responsible for regulating the telecommunications, broadcasting and postal industries in the public interest and to ensure affordable services of a high quality for all South Africans. ICASA also issues licences to telecommunications and broadcasting service providers, enforces compliance with rules and regulations, protects consumers from unfair business practices and poor quality services, hears and decides on disputes and complaints brought against licensees and controls and manages the effective use of radio frequency spectrum.

In June 2014, two new ministries were created by the President of South Africa: the Minister of Communications and the Minister of Telecommunications and Postal Services, who is responsible for administering the primary pieces of legislation pertaining to telecommunications and broadcasting in South Africa as well as overseeing the operations of ICASA.

Last modified 5 Oct 2016
Overview
South Africa

Telecommunications services in South Africa are regulated by the Independent Communications Authority of South Africa (ICASA) which was established by the Independent Communication Authority of South Africa Act of 2000, as amended in 2014 ('ICASA Act').

ICASA is responsible for regulating the telecommunications, broadcasting and postal industries in the public interest and to ensure affordable services of a high quality for all South Africans. ICASA also issues licences to telecommunications and broadcasting service providers, enforces compliance with rules and regulations, protects consumers from unfair business practices and poor quality services, hears and decides on disputes and complaints brought against licensees and controls and manages the effective use of radio frequency spectrum.

In June 2014, two new ministries were created by the President of South Africa: the Minister of Communications and the Minister of Telecommunications and Postal Services, who is responsible for administering the primary pieces of legislation pertaining to telecommunications and broadcasting in South Africa as well as overseeing the operations of ICASA.

Last modified 5 Oct 2016
Laws and regulations

The central piece of legislation which governs telecommunications and broadcasting in South Africa is the Electronic Communications Act 36 of 2005 (ECA).

The primary policy imperative underlying the ECA is the facilitation and implementation of a simplified, flexible regulatory regime which recognises and accommodates the convergence of new technology, platforms and services.  In this regard, a notable feature is that fixed, mobile and satellite networks and services are subject to the same regulatory framework provided for in the ECA, which advocates a technology-neutral licensing regime.

Furthermore, the ECA covers a wide range of issues, including: licensing; access; infrastructure rights such as way-leaves; the management and assignment of frequency; markets and competition; facilities leasing; and universal service access funds.

A number of regulatory aspects under the ECA are governed by separate regulations which are promulgated from time to time. Other legislation which impacts upon the telecommunications sector includes: 

  • The ICASA Act, which sets out its powers of ICASA as well as sanctions which can be imposed on licensees for non-compliance with their licence terms and conditions

  • The Regulation of Interception of Communications and Provision of Communication-related Information Act 70 of 2002 (RICA), which sets out a lawful intercept regime and details the obligations of electronic communications service providers in co-operating with law enforcement authorities and storage of traffic data

  • The Electronic Communications and Transactions Act 25 of 2002 which creates legal exemptions for information intermediaries where they act as such (eg as a mere conduit or hosting provider)

  • The Competition Act 89 of 1998, which legislates against anti-competitive practices such as collusion and cartels

  • The Film and Publications Act 65 of 1996 which requires ISPs and others to register and sets out obligations around child sexual abuse images and exposure of children to pornography
Last modified 5 Oct 2016
Regulatory bodies

ICASA

Physical Address:  Blocks A, B, C and D, Pinmill Farm, 164 Katherine Street, Sandton

Postal Address:  Private Bag X10002, Sandton 2146

Telephone: 27 (11) 566 3000/3001

Website: www.icasa.org.za

ICASA is an independent body and its main prerogatives are captured in the ECA.

Last modified 5 Oct 2016
Regulated activities

The ECA broadly regulates two main categories of telecommunications activities/services by means of a licensing framework:

  • Electronic Communications Network Service (ECNS).  An operator who holds an ECNS licence may roll-out and operate a physical network.  This network can be made up of any technology the operator may choose: radio equipment, copper cabling, fibre optic cabling etc.
  • Electronic Communications Service (ECS).  An operator who holds an ECS licence may provide services to customers over its own or a third party's network.

The ECA defines ECNS as a service whereby a person makes available an electronic communications network, whether by sale, lease or otherwise:

  • For that person's own use for the provision of an electronic communications service or broadcasting service
  • To another person for that other person's use in the provision of an electronic communications service or broadcasting service
  • For resale to an electronic communications service licensee, broadcasting service licensee or any other service contemplated by this Act, and 'network services' is construed accordingly

The ECA further defines ECS as any service provided to the public, sections of the public, the State, or the subscribers to such service, which consists wholly or mainly of the conveyance by any means of electronic communications over an electronic communications network, but excludes broadcasting services.

It is helpful to consider the following fundamental distinctions between these service types:

  • Wholesale vs. retail: An ECNS licensee wholesales network capacity to ECS licensees or other ECNS licensees for resale, but it does not deal with the public. An ECS licensee, on the other hand, offers retail services to the public (and may also provide wholesale services for resale to third parties).
  • Physical vs. virtual networks: An ECNS licensee operates physical networks made of facilities such as fibre or base stations. An ECS licensee operates virtual networks such as VPNs and MPLS networks.

  • As such, any person who wishes to provide ECNS or ECS services will be subject to the regulatory requirements imposed in terms of the ECA.

There are various regulations under the ECA, including the following activities which are regulated:

  • Facilities Leasing: According to the Electronic Communications Facilities Leasing Regulations of 2010, licensees are also obliged to lease facilities on request to other licensees and exempted persons. As with interconnection arrangements, these regulations that prescribe the processes for requesting, negotiating and enforcing facilities leasing agreements.  Facilities leasing agreements only become enforceable when approved by ICASA and facilities leasing must be provided on a transparent and non-discriminatory basis.

  • Type Approval: All radio apparatus must be type approved in accordance with the Type Approval Regulations of 2013.  ICASA may prescribe the types of equipment and the circumstances in which type approval is not required. ICASA generally recognises type approval given by international standards organisations such as the European Telecommunications Standards Association.

  • Radio Frequency: The ECA further provides for the control of radio frequency spectrum by ICASA.  The National Radio Frequency Plan allocates the electromagnetic spectrum to radio services in the frequency bands between 8.3 kHz and 3000 GHz.  All frequency assignments must be in accordance with the current version of the national radio frequency plan. Only ECNS licensees may apply for a radio frequency spectrum licence in terms of the Radio Frequency Spectrum Regulations.

Therefore, unless exempted, a radio frequency spectrum licence is required to operate radio apparatus. Apparatus that have low power applications are generally exempted. ICASA has published a radio frequency band plan that takes into account the International Telecommunications Union (ITU) spectrum allotments for radio frequency spectrum use.

Last modified 5 Oct 2016
Registration / licensing

The licensing framework under the ECA is set out below:

ECNS Licences

  • Individual ECNS (issued for 20 years): This allows the licence holder to roll out its own network nationwide or across a province.
  • Class ECNS (issued for 10 years): A class ECNS allows the holder to roll out its own network in a district or local municipality. In other words, the licensee will choose to operate in a municipal area and provide access services to consumers in that area. This is the form of licence required by operators wanting to set up their own network focusing on a smaller area. South Africa has 48 district municipalities and 231 local municipalities as well as 7 metropolitan municipalities.

 ECS Licences

  • Individual ECS (issued for 20 years): This licence allows the holder to provide services to customers over the network of an ECNS licensee, including voice or VoIP services which use numbers taken from the National Numbering Plan. Examples of other services that can be provided include:

    • Internet access

    • Email

    • Hosting

    • Protocol conversion

    • Virtual Private Networks (VPN)

    • Multi Protocol Labelling Systems (MPLS)
  • Class ECS (issued for 10 years): This licence allows the holder to provide the same services as the Individual ECS licence except for voice services requiring numbers from the national numbering plan. A class ECS licensee will need to enter into commercial arrangements with one or more ECNS licensees who have the networks to carry services to the customer.

Licence Exemptions

Certain services are regarded as being of limited socio-economic importance and can be provided on a licence-exempt basis, subsequent to an application for a licence exemption to ICASA having been granted.

Although the following services are licence-exempted, consent and/or authorisation from the ICASA is still required:

  • Private electronic communications networks
  • Small networks
  • ECS provided on a not-for profit basis
  • Re-sale of ECS
Last modified 5 Oct 2016
Establishment

There are presently no specific restrictions on foreign ownership of telecommunication services.  However, an applicant for a licence in terms of the ECA must show that it is a South African citizen (in the case of a natural person) or that it will be registered in South Africa with its principal place of business located within South Africa.  Accordingly, a foreign owner will be required to incorporate a local company to obtain a licence.

Last modified 5 Oct 2016
Interconnection/roaming

Licensees must, upon request, interconnect to any other ECA licensee and to exempted persons requesting interconnection.  The processes for requesting, negotiating and enforcing interconnection agreements are contained in ICASA's pro-competitive Interconnection Regulations.  In general, interconnection must be provided on a non-discriminatory basis as between comparable types of licences and must be of the same standard and quality as provided by a licensee to itself. All interconnection agreements concluded pursuant to the Interconnection Regulations are filed with ICASA and are available for public review.

There is no definition in the ECA relating to roaming. Additionally, there are no specific regulations applicable to roaming. Roaming agreements are concluded between the network operators (in the case of South Africa, ECNS licensees) and payment is made by one network operator to the other network operator for the services utilised by its subscribers.  Roaming falls within the definition of an ECNS, and accordingly roaming is the making available of an electronic communications network to another person for that other person's use in the provision of an ECS and is therefore an ECNS.  Any obligations in relation to roaming would therefore need to be considered within the ambit of the applicable ECNS licence requirements.

The Call Termination Regulations published on September 29, 2014 regulate and prescribe the wholesale interconnection tariffs that may be charged between operators in the mobile and fixed markets. ICASA has adopted the Long-Run Incremental Cost Plus (LRIC+), a model which is closely aligned to the LRIC+ model that the UK has adopted, as the cost standard for bottom-up and top-down modelling to determine the cost of mobile and fixed wholesale voice call termination.

Tariffs are not tightly regulated.  It is a requirement that all licensees lodge their tariffs with ICASA prior to offering a service and that the tariffs be made known to the public. Only Telkom's year on year increases are limited by regulation.

Last modified 5 Oct 2016
Consumer protection

ICASA is notably in charge of consumer protection and advancing the interests of consumers of electronic communications in general. There are a number of regulations which address consumer rights in general with regards to the following: 

  • 112 Emergency Call Centre

  • Carrier Pre-selection

  • End User & Subscriber Service Charter

  • E-rates

  • Number Portability

The Consumer Protection Act 68 of 2008 (CPA) does not specifically address the rights of a consumer in the context of a telecommunication service provided to consumers, however all provisions relating to the provision of any services to any consumers under the CPA would apply to the provision of any telecommunication services.  For the purposes of the CPA a 'consumer' includes natural persons and a juristic person with an asset value or turnover which equals or exceeds a threshold of ZAR 2 million.

Last modified 5 Oct 2016
Taxes and fees

Annual licence fees are payable in accordance with the terms of the ICASA General Licence Fee Regulations.

The fees are calculated at between 0.15% and 0.35% of 'revenue' generated from licensed activities, depending on the specified brand of licensed revenue between 0 and more than ZAR 1,000,000,000,001 (one Billion and one Rand) (revenue is defined in terms of international accounting standards). The calculation of the amount due must be based on audited financial statements (or sworn statements where audited statements are not required by law), which must be submitted along with the payment.

Fees can be paid quarterly or annually, and late payments are subject to stringent interest penalties and fines for non-compliance. 

Licensees are further required to pay a contribution to the Universal Service and Access Fund - an entity set up by Government to fund development of services in rural areas - amounting to 0.2% of annual turnover derived from licensed services.

Last modified 5 Oct 2016
Enforcement

The ICASA Act provides ICASA with the authority to make a decision, on the recommendation of the Complaints and Compliance Committee (CCC) (an independent committee of ICASA required to investigate, and hear if appropriate, and make a finding on all matters referred to it by ICASA, complaints received by the CCC and allegations of non-compliance with the ICASA Act or underlying statutes), directing a licensee to pay a fine in any amount prescribed. If the licensee has been found to be repeatedly in violation of the Act, regulations or licence conditions, ICASA may even revoke its licence. 

The Draft Compliance Procedure Manual Regulations provide that upon a determination of non-compliance with these Regulations by the CCC in terms of the ICASA Act, a fine not exceeding Fifty Thousand Rand (ZAR 50,000) per contravention may be imposed. In addition, the regulations regarding annual licence fees provide for fines of up to One Million Rand (ZAR 1,000,000) for each failure to comply, upon an adverse determination by the CCC, in addition to the automatic imposition of interest charges and penalties for the late payment of fees.

The interconnection regulations provide that upon a determination of non-compliance by the CCC in terms of the ICASA Act, ICASA may impose a fine not exceeding Five Hundred Thousand Rand (ZAR 500,000).

In addition to these potential penalties stemming from the ECA, the RICA Act allows for fines up to Five Million Rand (ZAR 5,000,000) and to imprisonment of up to 10 years, as well as licence revocation.

In addition, specific regulations may include additional fines and penalties, depending on the nature and context of the applicable regulations

Last modified 5 Oct 2016
Contacts
Preeta Bhagattjee
Preeta Bhagattjee
Director, National Practice Head
T +27 (0)11 562 1038
Florence Guthfreund-Roland
Florence Guthfreund-Roland
Avocat à la Cour and Partner
T +33 1 40 15 25 08
Last modified 5 Oct 2016