ICASA notice on individual licence transfers and historically disadvantaged groups

[26 October 2016] ICASA has published a Notice which effectively deletes regulation 2(1A), reversing the amendment which MTN had taken issue with.

Notice repealing Regulation 2(1A)

Presumably this represents the end of the MTN application.

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[25 September 2016] MTN has lodged an application against ICASA seeking the review of an amendment effected to the Standard Terms and Conditions for Individual Licences Regulations.

Notice of Motion and Founding Affidavit-23 September 2016

Rule 16a Notice 23 September 2016

The MTN application is for review of the lawfulness of regulation 2(1A) inserted into the Standard Terms and Conditions Regulations:

(1A) Notwithstanding the provisions of sub-regulation 1, a licensee may not change shareholding which results in a reduction of ownership and/or control by Historically Disadvantaged Groups (HDGs) in the licence below the 30% threshold or where the 30% threshold is not yet held, without the prior written approval of the Authority.”

MTN is arguing, amongst other things, that the above clause – which came into effect on 30 March 2016 – should not apply in respect of any licence issued before 30 March 2016. ICASA have confirmed in writing to MTN that it is their position that the new regulation applies to all licences whenever issued, but only applies to transfer applications lodged after 30 March 2016.

MTN argues that this poses challenges to it as a listed company.

There are also a number of procedural arguments, i.e. that ICASA did not follow the required procedure before finalising the insertion of the new regulation 2(1A).

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[29 April 2016] Neotel’s application for leave to appeal against the findings of the High Court regarding ownership by HDIs has been set down for hearing on 13 May 2016.

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[3 March 2016] In a move that may affect both current and future licensees, the High Court has found in the Vodacom/Neotel licence transfer review that ICASA had erred in allowing the parties to proceed with the application notwithstanding that Vodacom did not have the required 30% ownership by Historically Disadvantaged Individuals (HDIs).

The Court held that the 30% ownership must be present at the time of application and ICASA had no discretion to postpone compliance with this requirement. The judge found ICASA’s practice of allowing applicants to meet the minimum equity requirements within a reasonable period of time to be inconsistent with the wording of the Act, stating that “…the language of section 9(2)(b) presupposes that an applicant must arrive at ICASA’s door with a minimum of 30% BEE shareholding”.

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[16 October 2014] As set out in its Annual Performance Plan for 2014/15, ICASA has begun the process of remedying the sorry state of transformation initiatives in the telecommunications industry. While the Regulator has confirmed that it will prescribe regulations on empowerment requirements to promote broad-based black economic empowerment in line with section 4(3)(k) of the ICASA Act, it has, in the interim, indicated that it will no longer approve any application for the transfer of an individual licence where the acquiring party does not have a minimum of 30% equity ownership by persons from historically disadvantaged groups (HDGs).

Notice on Individual Licence Transfers and ownership by persons from  Historically Disadvantaged Groups