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ISPA: Boost GDP & BEE in ICT sector with easier access to licencing

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South Africa’s ICT sector could make a bigger contribution to GDP and BEE if ICASA (the Independent Communications Authority of SA) issued an ‘invitation to apply’ (ITA) for individual electronic communications services (IECS) and individual electronic communications network services (IECNS) licences.

An IECNS licence allows the holder to enable the provision of connectivity services over a physical network throughout South Africa while an IECS licence allows the holder to use this network connectivity to provide services such as Internet access and voice services to end-users, also on a national basis.

ICASA’s State of the ICT Sector in SA Report 2022 records that the sector grew revenue just 0.3 percent last year, to R243.5 billion. In 2022, revenue from fixed broadband services and fixed Internet actually decreased, by 2.1% and 6.9% respectively.

Against this background of uninspiring growth, ISPA’s most recent annual roadshow saw members asking how more small business owners, historically disadvantaged people, and women could obtain IECS licenses to begin offering national ISP services.

In many cases, members said, the growth of existing smaller ICT firms is being restricted by the inability to obtain licences to expand their offerings. They point to the fact that they cannot apply to ICASA for these licenses but have to buy them from an existing licensee.          

One black women-owned ISPA member, which did not want to be named, said they couldn’t expand without the correct licensing.

“Some current holders of the licences believe it is a ticket for them to get rich if they just hold onto the license and sell it to a prospective buyer. The current concept is counter productive as the sellers want exorbitant prices for the licences, making it difficult for SMMEs to obtain them cost effectively,” she said.

According to Dominic Cull, regulatory advisor to ISPA: “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.” ISPA is SA’s recognised Internet industry representative body with 220 members.

“This means that 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,” added Cull.

“In ISPA’s view there is no legal impediment to ICASA immediately drafting and finalising 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 finalised.

“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,” concluded Cull.

Please see www.ispa.org.za for more information and consider following ISPA_ZA on Twitter.

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