A decade after it was first mooted, ICASA is probing the process of awarding telecoms licences. (Image created with GenAI)
A decade after it first began requesting the policy direction needed to issue new network licences directly, the Independent Communications Authority of SA (ICASA) has indicated in a preliminary view that issuing new licences directly would improve competition.
This view is contained in ICASA’s recently-published discussion document in the Government Gazette, which opens phase two of its inquiry into the licensing framework.
However, the Internet Service Providers’ Association (ISPA) says in its February submission to phase one of ICASA’s inquiry into new network licences that the regulator has been requesting the policy direction needed to issue new licences directly since 2016.
ISPA adds that the regulator has told Parliament it favours direct applications and regards the transfer process as an “unwarranted administrative burden”.
Under the Electronic Communications Act (ECA), ICASA maintains that it may only consider applications for new Individual Electronic Communications Network Service (I-ECNS) licences once the minister issues a further policy direction.
In August 2025, communications and digital technologies minister Solly Malatsi directed ICASA to hold an inquiry into whether new licences would promote competition and the universal provision of electronic communications networks and services.
ISPA is in favour of the inquiry leading to the minister issuing a final policy direction as soon as possible, but says it starts from the wrong point. The real question is whether there is any good reason to keep a restriction on licence availability that the ECA included in 2006 to limit infrastructure-based competition, it says.
ICASA’s inquiry considers whether issuing additional licences could enhance competition, expand network coverage, advance universal access and service objectives, and whether the benefits would outweigh the associated regulatory, compliance and environmental costs, it says in a media statement.
Having received 33 responses to the first phase of its inquiry in February, ICASA says in the discussion document, published on 30 October, that it has come to the “preliminary view that the current framework permitting the transfer of I-ECNS, and I-ECS licences has not been fully effective and efficient in promoting competition within the sector”.
A wrap-up of submissions contained in ICASA’s discussion document. (Image created with GenAI)
ICASA also says in its preliminary view that there is a reasonable basis to consider inviting, accepting and evaluating applications for new I-ECNS licences, subject to the requirements of the ECA and applicable licensing criteria.
The inquiry, which is being conducted in four phases, assesses the effectiveness of the current licence transfer framework in promoting competition and examines the demand for new I-ECNS licences.
“Direct access to licensing may reduce barriers to entry and improve market contestability, particularly in markets where access currently depends on acquiring licences through the secondary market,” says ICASA.
However, ICASA cautions that licensing reform alone is unlikely to resolve all competition concerns and would need to be supported by other regulatory measures covering spectrum access, infrastructure sharing, facilities leasing and wholesale access.
Communications and digital technologies minister Solly Malatsi. (Graphic: Nicola Mawson | Official photograph)
In their submissions, stakeholders raised concerns that the existing system of acquiring licences through transfers from current holders was creating barriers to market entry. They argued that the secondary market had led to artificial scarcity, inflated acquisition prices and a lack of transparency around the cost and availability of licences.
Amatole Telecommunications, for example, said acquiring an I-ECNS and Individual Electronic Communications Service (I-ECS) licence pair cost more than R1 million, excluding the transfer application fees. Some respondents also argued that the system favoured established operators and businesses with deeper financial resources.
Submissions also pointed to lengthy transfer approval processes, prolonged negotiations and the dependence on existing licence-holders being willing to sell. Stakeholders said these factors made it difficult for new entrants to secure licences and created uncertainty around market access.
Some described licences being held as strategic assets rather than used to provide services, while others called for greater transparency, clearer transfer criteria and faster processing.
Cell C argues in its submission that ICASA read section 5(6) of the ECA too narrowly, because it requires only a policy direction issued under section three, not one that expressly mentions I-ECNS. ICASA said in a November 2023 notice that no direction allowing it to consider applications had been issued.
Vodacom says it does not regard the current licensing framework as a barrier to entry and does not expect substantial additional benefits from new licences, according to ICASA’s discussion document.
Malatsi’s separate directive last December, enabling operators to acquire licences through equity equivalency schemes, has been seen as pro-Starlink, a company belonging to billionaire Elon Musk that has been lobbying for a change to regulations that would enable it to enter SA. ICASA said in the 2023 notice that Starlink holds no licence issued by the authority.
The minister has denied being in favour of Starlink entering SA skies, while government has said his directive seeks to expand broadband coverage to underserviced areas in general, in accordance with SA’s national interests.
Interested parties have until 6 January to comment, supported by relevant evidence, research and stakeholder data where possible. Public hearings and a findings document are the inquiry’s remaining phases.
