ECA Chapter 3

The registration and granting of electronic communications licences in South Africa is performed by ICASA under the Electronic Communications Act 36 of 2005 (the ECA).

Why are there licensing requirements?When is a licence required?Service licensing framework in South AfricaLicence exemptions

Why are there licensing requirements?

Governments impose licensing requirements so as to ensure that:

  • Scarce resources such as frequency and numbers can be efficiently allocated and coordinated
  • Services are provided in under-serviced and rural areas
  • They have authority over licensees for the purposes of regulating markets and competition, and
  • Consumers are protected in their dealings with service providers

When is a licence required?

As a general rule a licence or licence exemption is required whenever communications are carried from one point to another.

Service licensing framework in South Africa

There are two main categories of service licence available under the ECA:

  • Electronic Communications Network Service (ECNS) licences: These licences authorise the holder to roll out and operate a physical network. This network can be made up of any technology you choose: radio equipment (for a wireless network), copper cabling, fibre optic cabling etc. ECNS licensees can also enter into commercial arrangements with other licensees to allow them to use the electronic communications network owned and operated by the ECNS licensee.
  • Electronic Communications Service (ECS) licences: These licences allow you to provide services to customers over your own or somebody else’s network. This will typically be the licence held by an ISP which does not operate its own network or network facilities.

Examples:

  • Telkom has a telephone or voice network which covers most of South Africa. The network consists of phone lines, switches and other hardware – in order to operate this network Telkom requires an ECNS licence. Telkom then provides voice services to its customers over this network – in order to provide these voice services it will require an ECS licence.
  • Vodacom has a GSM network which also covers most of South Africa and consists of their masts and towers which have radio equipment located on them. They will require an ECNS licence in order to own and operate this network and an ECS licence in order to provide their services – voice, data, SMS, MMS etc – over this network.
  • An ISP wishes to provide internet connectivity to customers. It does not have its own network (although it may own some hardware) but relies on the services of a network owner and operator such as Telkom (i.e. an ECNS licensee) to carry its services to its customers. In this example the ISP itself does not require an ECNS licence (it does not own and operate the network) but only requires an ECS licence so that it can provide its services to its customers over Telkom’s network.

The ECA breaks down the licence categories into the two subcategories set out in Table 1 below.

Table 1: Licensing under the Electronic Communications Act 36 of 2005

ECNS Licences Individual ECNS (IECNS) This licence allows the holder to roll out and operate an electronic communications network nationwide or across a province.
Class ECNS (CECNS) This licence allows the holder to roll out and operate an electronic communications network in a district or local municipality. In other words, the licensee will choose to operate in a municipal area and provide access services to consumers in that area.

This is the form of licence required by operators wanting to set up their own network focusing on a smaller area.

South Africa has 8 metropolitan municipalities, 44 district municipalities and 226 local municipalities.

ECS Licences Individual ECS (IECS) This licence allows the holder to provide services to customers over the network of an ECNS licensee, including voice or VoIP services which use numbers taken from the National Numbering Plan, nationwide or across a province. Examples of other services that can be provided include the following:

  • Internet access
  • Protocol conversion
  • Virtual Private Networks (VPN)
  • Multi-Protocol Labeling Systems (MPLS)
 

Class ECS (CECS)

This licence allows the holder to provide the same services as the Individual ECS licence, except for voice services requiring numbers from the National Numbering Plan, in a district or local municipality.
Class ECS licences received from ICASA prior to 21 May 2014 allow the holder to provide services nationwide or across a province.

Individual ECNS and ECS licences are issued for an initial term of 20 years.  Class ECNS and ECS licences are issued for an initial term of 10 years. All of these licence types can be renewed prior to the expiration date, upon application to ICASA and payment of a renewal fee to ICASA.

All licence holders must make annual payments to ICASA of the Annual Licence Fee and the USAF Contribution; further information on this can be found at the following link. All licence-holders must also attend to all standard and ad hoc compliance reporting obligations imposed by ICASA.

Class ECS and Class ECNS licences may be registered directly with ICASA, following submission of registration documentation and payment of Class licence registration fees to ICASA; Ellipsis can assist with this process, as set out here.

IECNS, IECS and the old national CECS licences may be transferred by obtaining ICASA’s approval for the transfer following submission of an application for same to ICASA accompanied by a transfer application fee; Ellipsis can assist with the sourcing and transfer of these licences, and you can get more information on this by contacting sam@ellipsis.co.za.

Service licensing is distinct from two other forms of licensing: type approval and frequency licensing. Where these latter forms of licensing are required they must be obtained separately. An ECNS licence is required before a licensee will be entitled to apply for radio frequency spectrum licensing. You can read more about these forms of licensing at type approval and frequency licensing.

Licence exemptions

Certain services are regarded as being of limited socio-economic importance and can be provided on a licence-exempt basis, subsequent to application for a licence exemption to ICASA having been granted.

Table 2: Licence exemptions under the Electronic Communications Act 36 of 2005

Electronic Communications Networks Private Electronic Communications Networks (“PECN”) The Licence Exemption Regulations define a PECN as “an electronic communications network used primarily for providing electronic communications for the owner’s own use”. The ECA definition provides for “networks used principally for or integrally related to the internal operations of the network owner. Except that where the PECNs’ additional capacity is resold, the Authority may prescribe terms and conditions for such resale.”
Small Electronic Communications Networks (“SECN”) The Licence Exemption Regulations define SECN as “an ECN that lies within a limited special area, used by a specific user group, has a specific topology and is not an ECNS of national, provincial, district or local municipal scope, but may be connected to one which is licensed or licence exempt.”

SECNs are required to make use of licence-exempt frequencies (where they are wireless), with common examples of SECNs including LANs and WLANs.

Resale of Network Capacity The Licence Exemption Regulations provide that the operator of a PECN may resell, lease or otherwise make available spare capacity on its network to third parties.
 

 

 

 

 

 

 

Electronic Communications Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-profit ECS ECS provided on a non-profit basis and ECS provided to the public for free is licence-exempt. Additionally, ECS will be licence-exempt where the entity providing the service is:

  • a non-profit organisation established under an Act of Parliament, or
  • a non-profit company registered in accordance with the provisions of the Companies Act.
Resellers A reseller is broadly defined in the ECA as a person who:

  • acquires, through lease or other commercial arrangement, any electronic communications network service or electronic communications service, and
  • makes such electronic communications network service or electronic communications service available to subscribers for a fee,

whether or not such electronic communications network services or electronic communications services made available by the reseller:

  • are identical to the electronic communications network service or electronic communications service acquired,
  • are packaged, bundled or otherwise re-grouped to form new or varied service offerings,
  • are combined, linked or used in connection with electronic communications networks or electronic communications facilities owned by the reseller, or
  • add value to such electronic communications network services or electronic communications services.

The definition of reseller therefore contemplates a scenario in which a reseller obtains ECS from a licensed upstream ECS provider and then on-sells, repackages, bundles and/or regroups the service in combination with its own network and/or facilities, which it in turn offers to consumers under its own brand or style.

Ancillary Services Defined as “a retail service or bundle of retail services which do not amount to an Electronic Communications Service and includes a necessary but incidental element of ECS, where such ECS elements do not constitute the major purpose, utility or value of the service, including but not limited to tracking, alarm and similar services”.