Licensing of Communications Networks and Services: Case Study of Market Liberalisation in South Africa and the United Kingdom

Carla Raffinetti Carla Raffinetti

doi:10.23962/10539/20346

Abstract

The article contrasts the regulatory regime for licensing telecommunications networks and services in South Africa with that of the United Kingdom, in order to illustrate how regulation can be used to restrict competition (South Africa) or facilitate entry into the market (the United Kingdom). The purpose of this article is to suggest possible areas for licensing reform in South Africa, which is currently in the process of reviewing its ICT policy framework. There are three areas where licensing policy can play a key role in promoting competition in the market: infrastructure and services; spectrum licensing; and pro-competitive regulation, which allows for additional licence conditions to be imposed on entities that hold significant market power (SMP). This paper addresses the first issue only (infrastructure and services), as an area that is easily capable of reform. Currently, the system for licensing networks and services in South Africa requires the pre-approval of the regulator to be granted before a licence is issued, which is unduly resource-intensive. This article advocates that South Africa adopt a system of general authorisations for the licensing of networks and services similar to that applied in the United Kingdom. Such an approach would free up the regulator to address other areas that have received insufficient regulatory attention to date, notably spectrum licensing and pro-competitive regulation, both of which fall beyond the scope of this article.

Highlights

KEYWORDS licensing telecommunications networks, licensing reform, pro-competitive regulation, class licensing framework, general authorisation regime, telecommunications networks and services, South Africa, United Kingdom. In both the United Kingdom and South Africa, telecommunications services were historically provided by a single fixed-line provider as a public utility service administered by the government
Independent Communications Authority of South Africa (ICASA) currently requires exemptees to notify it before providing a licence exempt service, which defeats the purpose of a licence exemption regime (RSA, 2005, section 5(6))
Because the individual licensing process under the Electronic Communications Act of 2005 (ECA) remains so onerous, the market effectively remains closed to new market entrants who want to roll out larger scale voice and data networks, unless they are able to take transfer of I-electronic communications network services (ECNS) and I-Electronic communications services (ECSs) licences from an existing licensee

Summary

Introduction

In both the United Kingdom and South Africa, telecommunications services were historically provided by a single fixed-line provider as a public utility service administered by the government This setup became unsustainable as exponential growth in the sector, fuelled predominantly by the development of value-added services, the proliferation of the Internet and unprecedented customer demand for mobile telephone services, introduced new market players into the industry. This in turn necessitated that the licensing regime be reformed to allow for providers of these new services to enter the market. The incumbent was partially privatised (as was the case with Telkom SA in South Africa), or fully privatised (as BT was in the United Kingdom), which further reinforced its independence from the state

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