ICASA New Network Licences ZA: Inquiry Suggests Direct Issuance

• ICASA is conducting a multi-phase inquiry into its telecoms licensing framework, a decade after the issue was first raised.
• The regulator's preliminary view suggests that directly issuing new licences would enhance competition in the South African telecommunications sector.
• The current system of transferring I-ECNS and I-ECS licences is deemed ineffective in promoting competition, according to ICASA's preliminary findings.
• Minister Solly Malatsi directed ICASA in August 2025 to inquire whether new licences would promote competition and universal service provision.
• Stakeholders argue that the existing secondary market for licences creates artificial scarcity, inflates prices, and hinders market entry.

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.

ICASA, the Independent Communications Authority of South Africa, is currently undertaking a significant inquiry into the process by which telecommunications licences are awarded, a review that has been under consideration for a decade. This initiative marks a crucial step in potentially reshaping the landscape for ICASA new network licences ZA. The regulator has issued a discussion document, published on October 30, which outlines its preliminary assessment, indicating that the direct issuance of new licences would likely enhance competition within the sector. This document signals the commencement of the second phase of its comprehensive ICASA licensing framework inquiry.

The initial phase of this inquiry garnered 33 submissions from various stakeholders in February. Following this input, ICASA has formed a preliminary view that the existing framework, which relies on the transfer of Individual Electronic Communications Network Service (I-ECNS) and Individual Electronic Communications Service (I-ECS) licences, has not proven fully effective or efficient in fostering competition across the telecommunications industry. Consequently, the authority suggests there is a reasonable basis to consider inviting, accepting, and evaluating applications for new South Africa I-ECNS licenses, provided they adhere to the stipulations of the Electronic Communications Act ICASA and relevant licensing criteria.

The legal foundation for ICASA's current approach stems from the Electronic Communications Act ICASA, which, according to the regulator, restricts its ability to consider applications for new I-ECNS licences until a specific policy direction is issued by the relevant minister. This long-standing requirement has been a point of contention and discussion within the industry. The Internet Service Providers’ Association (ISPA), in its February Internet Service Providers’ Association submission to the first phase of the inquiry, highlighted that ICASA has been seeking this necessary policy direction for direct licence issuance since as far back as 2016.

Further underscoring this point, ISPA noted that ICASA has previously informed Parliament of its preference for direct applications, viewing the current licence transfer mechanism as an "unwarranted administrative burden." In a pivotal development, Minister Solly Malatsi, responsible for communications and digital technologies, issued a directive in August 2025, instructing ICASA to conduct an inquiry. This directive specifically mandates an assessment of whether the introduction of new licences would genuinely promote telecoms licensing competition ZA and contribute to the universal provision of electronic communications networks and services. While ISPA supports the inquiry's aim to expedite a final Solly Malatsi policy direction, it contends that the inquiry's starting point is flawed, questioning the continued necessity of the ECA's 2006 restriction on licence availability, originally designed to limit infrastructure-based competition.

ICASA's ongoing inquiry, structured into four distinct phases, is designed to thoroughly evaluate the efficacy of the existing licence transfer framework in stimulating competition and to gauge the current demand for new I-ECNS licences. The regulator's media statement indicates that the inquiry will delve into whether granting additional licences could intensify competition, broaden network coverage, and advance universal access and service objectives. A key aspect of this assessment involves weighing the potential benefits against the associated regulatory, compliance, and environmental costs.

Stakeholders, in their submissions, have voiced significant concerns regarding the prevailing system, where acquiring licences often necessitates transfers from existing holders. This method, they argue, erects substantial barriers to market entry. Specific criticisms include that the secondary market has fostered an artificial scarcity of licences, driven up acquisition prices, and created a notable lack of transparency concerning both the cost and availability of these essential permits. For instance, Amatole Telecommunications specifically pointed out difficulties encountered in obtaining I-ECNS and I-ECS licences under the current regime. ICASA itself acknowledges that "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." However, the authority also cautions that licensing reform alone is unlikely to resolve all competition issues and must be complemented by other regulatory measures, including those addressing spectrum access, infrastructure sharing, facilities leasing, and wholesale access.

Lawyers should monitor ICASA's ongoing inquiry into the licensing framework for I-ECNS and I-ECS licences, as a shift towards direct applications could create new market entry opportunities for telecommunication providers in South Africa. Compliance officers should prepare for potential changes in licensing requirements and application procedures, particularly regarding competition and market access.

Source: Original reporting via industry sources.