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In terms of the Electronic Communications Act, of 2005 (the ECA), the operation of electronic communication networks and the provision of telecommunications services to end-users over networks are licensed separately in terms of an electronic communications network services (ECNS) licence and electronic communications services (ECS) licence respectively. The Telecommunications Act, of 1996, which was repealed by the ECA, previously licensed vertically integrated operators to both operate a network and provide services on that network. Previous licences issued in terms of the Telecommunications Act were converted by ICASA to one or more appropriate licences in terms of the ECA in respect of the networks operated and services provided by licensees.

 

operators of electronic communications networks and services

ECNS and ECS licences are issued as either individual or class licences. The type of licence which will be required to authorise the operation of a particular network and the provision of services depends on the nature and scope of the networks or services in question.

Subsequent to the conversion of previous licences issued in terms of repealed legislation, a large number of individual licences have been issued to various network operators and service providers of varying size. These licences confer substantially the same rights and obligations on the relevant licensees. As a result, such licensees are not restricted, as they were previously, with regard to the type of network or the size of the network which they are entitled to operate. Operators will, however, still be limited by the need to obtain radio frequency (RF) spectrum licences, where applicable.
The two existing major providers of fixed-line services are Telkom Limited and  Neotel (Proprietary) Limited.

The South African government holds 39.4% of the shares in Telkom, with the Public Investment Corporation (an investment vehicle wholly owned by the government) holding 6.4% of the shares and its subsidiary Black Ginger 33 (Pty) Ltd holding 8.9%.  Elephant Consortium, a black economic empowerment group has a 5.8% shareholding, 4.1% of shares are held by Telkom subsidiaries and 35.4% are listed on the Johannesburg and New York stock exchanges. Neotel has three shareholders. These are SOE Company, comprising the state owned entities Eskom Holdings Limited and Transtel, the telecoms division of Transnet Limited, which holds 30% of the shares, Nexus Connexion (Pty) Ltd, which holds 19% of the shares and SEPCO (Pty) Ltd, made up of the Tata Group incorporated in India, CommuniTel (Pty) Ltd and Two Consortium (Pty) Ltd, which holds 51% of the shares. Both Telkom and Neotel hold 3G RF spectrum licences.

Sentech, is the major provider of broadcasting signal distribution services in South Africa. The state owns 100 per cent of the shares in Sentech.

Three mobile operators, Vodacom, MTN and Cell C hold individual licences to operate a wireless network and to provide ECS. Each of these licensees holds the necessary RF spectrum licences to provide mobile services including 3G services. Virgin Mobile operates a virtual network to provide such services. Wireless Business Solutions holds a licence to operate a network and holds associated RF spectrum licences enabling it to provide wireless data services.

The regulatory authority, the Independent Communications Authority of South Africa (ICASA) is required to publish in due course a list of essential facilities to which operators are required to grant access on request. This list will include the local loop, submarine cables and satellite earth stations.

bowman gilfillan’s experience

Bowman Gilfillan has, since 1999, advised ICASA (and its predecessor-in-law, SATRA) on a range of telecommunications matters. We have also acted for a wide variety of private clients in such matters.
In particular, we have assisted ICASA with the drafting of :

• the licence conditions for Cell C after the third mobile services licence was awarded to it in 2000;
• the conditions of licence for MTN in 2002;
• regulations on processes and procedures in respect of licence applications and registrations; and
• regulations on the procedures to be followed by inspectors.

Bowman Gilfillan advised SATRA and ICASA on certain aspects of the licensing process in respect of the third mobile services licence, including the High Court judicial review application brought by one of the unsuccessful applicants for that licence, NextCom.
In addition, Bowman Gilfillan has advised ICASA on the following other telecommunications matters:

• the proposed (but abortive) acquisition by Portugal Telecom of shares in M-Cell Limited, the holding company of MTN;
• the allocation of 1800MHz GSM RF spectrum to MTN and Vodacom.

Bowman Gilfillan has also advised private-sector clients on a number of telecommunications matters, including the following:

• We advised Nexus Connexion on its successful bid for the acquisition of the 19% black economic empowerment stake in the second national operator (which became Neotel).
• We advised MTN in relation to the draft Convergence Bill (which became the ECA) and assisted it in making submissions to the government on the draft Bill.
• We advised SBC and Telecom Malaysia on their acquisition of a 30% equity stake in Telkom, and also on certain aspects of the Telkom IPO.
• We advised an international consortium on the regulatory aspects of the proposed installation of a submarine fibre-optic cable around the continent of Africa.
• We advised SES-Global, an international satellite operator, on telecommunications regulation in various southern African jurisdictions.
• We advised MTN on the payment of fees for access to RF spectrum in the 1800 MHz frequency band.
• We advised VNU World Directories in respect of the legal aspects of the publication of telephone directories in South Africa.
• We advised Telecom Lesotho on various regulatory and licensing issues, including a tariff dispute with the Lesotho Telecommunications Authority and a judicial review application in the Lesotho High Court concerning encroachment by other licensees on its exclusivity rights under its fixed-line operator licence.
• We advised two foreign clients on the legality of so-called “cellular firewall” mechanisms (devices that transmit modulated radio waves which prevent communication between mobile phones and cellular systems).
• We have advised a number of international clients, including internet service providers, in relation to various aspects of licences issued by ICASA.
• We have advised shareholders in telecommunication service licensees in Botswana, Namibia, Zimbabwe and Malawi on a range of regulatory and commercial matters.