Icasa has concluded, provisionally, that South Africa’s system for letting new telecoms network operators into the market isn’t working, and that would-be operators should be allowed to apply to it directly for licences.
In a discussion document published in the Government Gazette on Friday, the regulator said the current regime – under which a newcomer must buy an existing licence from its holder and then seek Icasa’s approval for the transfer – “has not been efficient and effective with regard to promotion of competition”.
It found that demand for new licences “appears to be high” and that issuing them would reduce what it called “the artificial barriers to entry created by the existing I-ECNS licensees in the secondary market”. Its preliminary view is that the benefits of new licences are likely to outweigh the costs.
The licences in question are individual electronic communications network service (I-ECNS) licences, which are needed to run a network of national or provincial scope. Icasa has issued 470 of them, but it said most are “largely inactive or dormant”, and it has approved an average of only about 11 transfers of ownership or control a year.
The possibility of failure is not generally regarded as a sufficient reason to prohibit market entry… A new operator’s commercial viability should primarily be a matter for the applicant and its investors.
Communications regulator Icasa
Because Icasa cannot issue new I-ECNS licences, holders of unused ones can set their own price. Amatole Telecommunications told the inquiry that a pair of individual licences – one for running a network, the other for selling services over it – costs more than R1-million on the secondary market, before Icasa’s transfer application fee of R84 738 a licence. Satellite operator Sateliot said many licence holders were “defunct companies who are uncontactable”.
Icasa said it does not consider it necessary to intervene directly in the secondary market. Instead, it said, a direct licensing mechanism “where access into the market is no longer dependent on the incumbent licensee” is the most efficient fix. It also plans to publish guidelines on how it approves licence transfers and may consider a “use it or lose it” rule to stop licences being hoarded.
Applicants for new licences would still have to meet the Electronic Communications Act’s legal, technical, financial and ownership requirements, and Icasa would retain the right to refuse them. But the regulator said “the possibility of failure is not generally regarded as a sufficient reason to prohibit market entry”, and that a new operator’s commercial viability should primarily be “a matter for the applicant and its investors”.
Who held it up
Under section 5(6) of the act, Icasa may accept applications for new I-ECNS licences only in terms of a policy direction from the communications minister. Communications minister Solly Malatsi issued one in August 2025, asking for the inquiry, and Icasa launched it last November.
The Internet Service Providers’ Association (Ispa) said in its submission that Icasa had been asking for such a direction since 2016. It said the regulator had told parliament it favours direct applications and is on record describing the transfer process as an “unwarranted administrative burden”. Cell C took a different view, arguing that Icasa had read section 5(6) too narrowly and could have acted on policy directions already in force.
Icasa received 33 submissions, and they split largely along predictable lines. Vodacom said it does not see the current framework as a barrier to entry, though it criticised Icasa’s execution.
MTN said international evidence suggests that two or three infrastructure operators “are typically sufficient to ensure effective competition” and that there is “no evidence-based justification” for a new licensing window. It wants Icasa to wait for the outcome of a large number of licence renewals due in 2028 and 2029. Telkom said the marginal effect of new licences was likely to be “negligible”, while Rain said: “Market entry barriers are economic, not administrative.”
Satellite operators and smaller players argued the opposite. SpaceX said the transfer system has the effect of “appointing incumbent operators as the first arbiter as to whether a new entrant may enter the market” and, at worst, “promotes rent-seeking by opportunistic licensees that no longer require their licences”.
Amazon Leo, Eutelsat, Plan-S and the Global Satellite Operators Association also backed direct licensing. Eutelsat said that although it has a South African entity, it has had to rely on a partnership model to operate ground infrastructure in the country.
What it means for Starlink
Icasa stressed that the inquiry “is not about a new I-ECNS licence for the provision of satellite-based services”, because the licensing regime is technology neutral. But that cuts both ways: satellite operators would be able to apply for any new licences. SpaceX told the inquiry that it intends to obtain both individual licences “to provide a national service”.
Direct licensing would not, however, remove the main obstacle Starlink has faced. Section 9(2)(b) of the act sets a minimum of 30% equity ownership by historically disadvantaged groups for individual licence applications, “or such other conditions or higher percentages as may be prescribed”, and Telkom noted that the high court has held that the requirement applies to licence transfers, too.
SpaceX and the satellite operators’ association urged Icasa to use the “other conditions” wording to accept alternatives such as equity-equivalent investment programmes. Icasa’s document says only that new applicants would remain subject to “applicable ownership and empowerment obligations”. With no invitation to apply open, Icasa’s position this year has been that satellite operators must buy an existing licence.
What happens next
Icasa said a restrictive approach to new licences may be “difficult to reconcile” with its plans to release more mobile spectrum under its road map for International Mobile Telecommunications (IMT), the spectrum used for 4G and 5G networks.
Written comments on the discussion document are due 45 working days after publication, in early January 2027. Icasa may then hold public hearings, after which it has 90 working days to publish a findings document. Cell C noted in its submission that Icasa’s original notice said the inquiry’s outcome would allow the minister to consider whether to issue a further policy direction. On that timetable, an invitation to apply for new licences is unlikely before the second half of 2027. — (c) 2026 NewsCentral Media
