The much-anticipated Electronic Communications Amendment Bill (ECA) has been published by the Ministry of Telecommunications and Postal Services in the Government Gazette.

The Bill sheds light on the Ministry’s plans to roll out and license a national wholesale open access network (WOAN) and also clarifies new legislation for radio frequency spectrum trading and sharing.

Spectrum that is not used by licensees for a period of two years will be withdrawn by ICASA and be re-farmed elsewhere. Spectrum licensees will now need approval to re-farm spectrum assigned to them. Re-farming, the practice of repurposing spectrum for different technology or use, was previously relied on by South Africa’s mobile operators as they rolled out LTE services, because the government has not assigned critical new spectrum for that technology.

It is illegal for ICASA to approve spectrum re-farming if it could have a negative impact on competition.

Radio frequency licensees may trade licensed spectrum, but only subject to approval from ICASA. This is dependent on the following factors:

  • Competition may not be distorted by any spectrum trade, or by the accumulation and hoarding of spectrum rights of use.
  • Licence obligations will be passed on to the new user of the radio frequency spectrum.
  • The current radio frequency spectrum licensee must have used the radio frequency spectrum in the year prior to the spectrum trade.
  • Submission to ICASA of the particulars of the spectrum trade.

According to the amendment Bill, ICASA has 12 months from the commencement of the legislation on spectrum trading to prescribe regulations.

The Bill also states that spectrum can be shared. When radio frequency spectrum is in high demand, such as in the connection of mobile phones, licensees need to obtain approval from ICASA before sharing the spectrum. It may not approve of the sharing of spectrum under the following conditions:

  • Where it has a negative impact on competition.
  • Where it amounts to spectrum trading.
  • Where it compromises emergency services or other services in the public interest.

If the spectrum is not in demand, licensees simply need to notify ICASA.

Telecommunications operators will also be interested in the clarification on WOAN licensing. Any applicant for a WOAN license must fulfil the following criteria:

  • They must include diversity of ownership and control to ensure meaningful participation of all entities involved.
  • The must include effective participation by targeted groups, including women, youth, and persons with disabilities.
  • They may not be dominated or controlled by any single entity.
  • They may not be a public entity under the Public Finance Management Act.
  • They may not have members in the consortium that either separately or collectively possess a market share of more than 50% in electronic communication services.
  • If any member of a consortium applying for the WOAN licence is already a network operator in South Africa, ICASA must require functional separation between its existing network operations and its participation in the WOAN.

Further to this, ICASA must also determine:

  • The terms and conditions, including universal service and access obligations.
  • Incentives such as reduced or waived spectrum fees.
  • Whether or not to prescribe the wholesale rates that the WOAN can charge for a limited period.
  • Imposing regulatory remedies on the WOAN service licensee to ensure effective service-based competition, and to avoid any anti-competitive effects.

Harty Rushmere can provide contextual advice on how the amendment impacts your business’ prospects for the future. For a consultation, please get in touch.