South Africa Considers Licensing New Network Operators After 15-Year Hiatus

Communications Minister Solly Malatsi has instructed the Independent Communications Authority of South Africa (Icasa) to investigate the potential licensing of new network operators, marking a potential shift in the country’s telecommunications landscape.

Minister Directs Icasa to Conduct Market Inquiry

In a notice published in the Government Gazette on 21 May 2025, Minister Malatsi gave the regulator six months to complete an inquiry focusing specifically on whether to issue more individual electronic communications network services (I-ECNS) licenses.

These licenses enable holders to build and operate physical communications infrastructure nationwide. To offer services over this infrastructure, operators also need an electronic communications services (ECS) license.

Current Licensing Landscape

“About 490 individual electronic communications network services licenses already exist,” Malatsi noted. “However, new applications aren’t possible without ministerial policy direction.”

This restriction has created a secondary market where licenses trade hands, with Icasa only able to approve transfers rather than issue new authorizations.

Key Considerations for the Inquiry

The minister outlined four critical factors for Icasa’s investigation:

• Market need for new I-ECNS licenses
• Potential impact on industry competition
• Contribution to universal network access
• Cost-benefit analysis of new entrants

Industry Calls for Licensing Reform

The directive follows pressure from the Internet Service Providers’ Association (Ispa), which argues that licensing restrictions create artificial barriers in South Africa’s crucial ICT sector.

Ispa regulatory advisor Dominic Cull highlighted how the current system disadvantages smaller operators: “Small businesses must purchase existing licenses at costs exceeding R1 million, with transfer processes taking 5-8 months.”

Historical Context

The last major licensing round occurred in 2009-2010 when over 500 license pairs were issued. Since then, Icasa has reportedly awaited ministerial direction before initiating new licensing processes.

The situation has led some license holders to treat authorizations as speculative assets rather than operational tools, with some simply waiting to sell rather than build networks.

As South Africa’s communications sector stands at this potential turning point, the Icasa inquiry’s findings could reshape market accessibility and competition for years to come.

Source: MyBroadband