VANS fume over licence conversion process in South Africa


Value added network services (VANS) are decrying the Independent Communications Authority of SA's (ICASA's) delay in converting them to full individual electronic communications network services (ECNS) licensees, and lawyers are warning the regulator could be facing a raft of litigation.

Late last year, ICASA issued a matrix for the conversion of licensees from the provisions of the now defunct Telecommunications Act to comply with the provisions of the Electronic Communications Act (ECA). This matrix only allows incumbent telecommunications operators such as Telkom, Vodacom, and MTN to receive full ECNS status, which allows them to build their own networks, thus self-provide and resell that capacity.

VANS such as Internet Solutions, Verizon Business and Vox Telecom are so far only to be awarded electronic communications services (ECS) licences, which means they will have to buy capacity from the ECNS holders.

“Such a delay is totally unfair and prejudicial to Internet Solutions,” says IS head of regulatory affairs Siyabonga Madiyibi. “Our competitors are already behaving as if they have full ECNS licences and are rolling out infrastructure already.”

Domminc Cull, an associate at legal firm Nicci Fergusson and council for the Internet Servers Providers Association, says the news that ICASA is conducting a two-stage conversion process, by giving the incumbents their ECNS licences first, the VANS their ECS licences and then considering their ECNS applications is not seen as being fair at all. “The problem is that ICASA is doing this without having conducted a market study and without having set a proper process,” he says.

Janet MacKenzie, a director at law firm Cliffe Dekker, says communications minister Ivy Matsepe-Casaburri explicitly said in her budget speech last year that ICASA must expedite the conversion of some of the larger VANS, and by not doing so ICASA is in breach of this policy directive.

However, Marcia Socikwa, the ICASA councilor tasked with the licence conversion process, says the regulator has to take into consideration all the legal opinions surrounding the issue of the VANS getting full ECNS licences, and this includes their right to self-provision.

“We cannot ignore the historical context of the VANS, meaning the ministerial determinations of 2004,” she says. “We are collecting all the legal opinions about that issue and of the issuing of an invitation to apply for those VANS that want to get full ECNS licences. The latter should be issued by the end of the first quarter.”

Socikwa says ICASA's two main objectives in the conversion process are to ensure that VANS enter the telecommunications sector to ensure costs come down, and that the process is legally sound.

IS's Madyibi says the delay in awarding his company an ECNS licence is costing it the ability to effectively compete in the market. “Right now we only have a test license for 2.4Ghz spectrum that we have to keep asking to be extended. We cannot put clients on a test licence.”