Telecommunications services and the electronic communications networks over which such services are carried are subject to relatively extensive regulation in South Africa, primarily in terms of the Electronic Communications Act, 2005 (ECA).  For the most part, such services and networks are required to be licensed by the regulatory authority, the Independent Communications Authority of South Africa (ICASA). Where a particular network makes use of any radio frequency spectrum in the transmission of services, a further licence is required to authorise the use of relevant frequencies.  Network operators and service providers are subject to a range of regulatory obligations, including requirements to pay licence fees and contributions to a universal service fund, quality of service requirements and various obligations to provide their competitors with access to their networks and services. 

Bowman Gilfillan’s TMT practice group has extensive experience in advising on all aspects of the telecommunications regulatory framework and acts regularly in significant telecomsM&A and commercial transactions.  The group also has expertise in the context of IT and outsourcing arrangements.

bowman gilfillan’s experience

Major transactions in which the firm has recently been involved include:

• the proposed acquisition by Bharti Airtel, a major mobile operator in India, of a stake in MTN, one of the three mobile operators in South Africa with operations in Africa and the Middle East, and the acquisition by MTN of a stake in Bharti Airtel
• the establishment of an independent tower company to operate and manage passive infrastructure for use by wireless operators and the acquisition and construction of towers by the company in South Africa and elsewhere in Africa
• acting for Verizon Communications in the disposal by its wholly-owned subsidiary, Verizon European Holdings Limited of its entire shareholding in Verizon South Africa (Pty) Limited to MTN
• advising the French media group Vivendi on its proposed multi-billion dollar acquisition in 2007 of a stake in Oger Telecom Limited, the ultimate holding company of Cell C, the third mobile network operator in South Africa

Our experience in the context of technology and outsourcing contracts includes advising:

• MTN, Neotel and Vodacom on the procurement and implementation of each party’s new fibre optic network across South Africa
• MTN on the conclusion of an agreement with Huawei for the turnkey provision of a fibre optic network in Gauteng
• Transnet in relation to a BOT agreement for a new countrywide managed connectivity network
• Ericsson in relation to a BOT agreement for a new managed connectivity network
• IBM on the R1billion outsourcing by Safmarine Container Lines of its IT infrastructure to IBM

Bowman Gilfillan’s TMT practice group has, since 1999, advised ICASA (and its predecessor-in-law, the South African Telecommunications Regulatory Authority) on a range of telecommunications matters, including:

• local loop unbundling in the context of the applicable regulatory framework
• proposed regulations in relation to the subsidisation of subscriber equipment
• the continuing application of price control rules to dominant operators

The TMT group has advised various public-sector clients, including ICASA, on the drafting of regulations and other legislative instruments:

• we advised ICASA on the process for the development of new regulations on competition matters in telecommunications markets and market segments in terms of section 67 of the ECA
• we drafted by-laws for the City of Johannesburg on the exercise of rights of way by telecoms network operators in the construction of electronic communications networks in the City’s municipal area
• we drafted regulations regarding the powers of ICASA inspectors exercising monitoring and search and seizure powers in respect of radio frequency equipment and radio apparatus
• we drafted regulations for ICASA setting out the processes and procedures to be followed to apply for electronic communications service and electronic communications network services licences

Our telecoms regulatory advice for private-sector clients includes:

• advising AT&T on reseller arrangements in South Africa and general licensing requirements and telecoms regulatory obligations
• advising clients, including Verizon and Bloomberg, on the licensing of telecoms service providers and general regulatory obligations in relation to the services provided by their local subsidiaries
• advising a major multinational provider of telecommunications services on its submission to ICASA on the proposed regulation of ownership and control in the telecoms sector
• advising Neotel on a range of matters, including the drafting of submissions on the Draft Electronic Communications Amendment Bill, as well as Neotel’s contractual arrangements with Infraco, the drafting of standard terms and conditions of service, international interconnection agreements and transit agreements
• advising several clients on the preparation and submission of applications for class licences to provide telecommunications services and to establish electronic communications networks of municipal or more limited scope and for radio frequency spectrum authorisations
• advising an international consortium on the regulatory aspects of the proposed installation of the EASsy submarine fibre-optic cable around the continent of Africa

Elsewhere in Africa, we have acted for clients in the following matters:

• we advised Telkom on the acquisition of subsidiaries of M-Web in various African jurisdictions
• we drafted legislation providing for the privatization of the Botswana Telecommunications Corporation
• we were involved in drafting a new Electronic Communications Act for Tanzania
• 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 have advised shareholders in telecommunication service licensees in Botswana, Namibia, Zimbabwe and Malawi on a range of regulatory and commercial matters