Below, please find issue 10 of ENSafrica's telecoms and media in brief, a snapshot of the latest telecommunications and broadcasting developments in South Africa.
- GG43021 – 2020 NN 91: Draft
Regulations in respect of the limitations of Control And Equity
Ownership By Historically Disadvantaged Groups And The Application
Of The Information And Communications Technologies
("ICT") Sector Code
- on 14 February 2020, the Independent Communications Authority of South Africa ("ICASA") published its Draft Regulations in respect of the Limitations of Control and Equity Ownership by Historically Disadvantaged Groups and the Application of the ICT Sector Code ("Draft Regulations").
- in developing these Draft Regulations, ICASA took into account the Findings Document and Position Paper on the Inquiry into Equity Ownership by Historically Disadvantaged Groups and the Application of the ICT Sector Code in the ICT sector published on 15 February 2019. The Draft Regulations can be accessed here.
- the purpose of the Draft Regulations
is to "promote equity ownership by Historically Disadvantaged
Persons and to promote B-BBEE." The proposed changes to
achieve this includes:
- the implementation of a revised ICT sector code;
- the application of a historically disadvantaged persons equity requirement; and
- the provision of the manner in which to verify compliance with historically disadvantaged persons and B-BBEE requirements.
- it seems from the Draft Regulations that licensees will have to comply with a 30% equity ownership held by historically disadvantaged groups ("HDGs"), 30% equity ownership held by black people and level 4 Broad-based Black Economic Empowerment ("B-BBEE"). The intention behind the requirement in section 3 for a licensee to have 30% equity ownership held by HDGs (which includes black people), is unclear in light of section 4, which requires a 30% equity ownership held by black people. It is also unclear whether the 30% equity ownership held by black people will only apply on "application" (applications for transfers, renewals or amendments), as indicated by section 4(1); or at "any given time during the license period" as contemplated by section 4(4); or within 24 months of the Regulations being published (as contemplated in section 9(2)).
- transfer of control or ownership in a
licensee has been uncertain and open to interpretation under the
existing legislation. The Draft Regulation's attempt to clarify
the position unfortunately results in more confusion.
- while the Draft Regulations define "control" (as defined in the Competition Act), "control interest" (which stipulates various criteria, including beneficial ownership of 20% or more of the issued share capital in the licensee), and "ownership interest" (direct or indirect ownership of issued share capital of 5% or more in the licensee), these terms are hardly used in the Draft Regulations.
- section 5 merely states that "...100% transfer of the issued share capital in a licensee amounts to both a direct transfer of ownership and a direct transfer of control...". Whether a 5%, 20% or 100% change in the issued share capital will result in a transfer of control or ownership, is anybody's guess.
- the remainder of the terms defined appear to be used in circular definitions, for example, the term "control interest" is used only in the definition of "affiliate" – another term which is not used in the Draft Regulations. The Draft Regulations therefore do little to clear up the existing confusion and may only serve to compound it.
- the Draft Regulations also introduced strict punishments for non-compliance. The Draft Regulations provide that a person that submits false, misleading or inaccurate information will be guilty of an offence and if convicted, may be liable for a fine up to ZAR5-million or imprisonment of no more than 24 months. Furthermore, contravening regulations 3(5) (which provide that an individual licensee must ensure that its ownership equity held by HDGs is not lower than 30% at any given time during the licence period) or regulation 4(4) (which provides that a licensee must ensure that its ownership equity held by black people is not lower than 30% at any given time during the licence period) may lead to a fine up to ZAR5-million or 10% of the licensee's turnover.
- ICASA has stated that compliance by existing licensees with these Draft Regulations will be required within 24 months of being published. Interested persons are invited to make written representations with regard to the Draft Regulations.
- the deadline for submission is 3 April 2020, 16h00. Submissions can be made by post, hand delivery or electronically and should be for the attention of: Mr Peter Mailula (Project Manager)/Ms Filkile Hlongwane (Project Leader).
- electronic submissions should be in MS Word format and emailed to the following addresses: firstname.lastname@example.org or email@example.com
- should you require any assistance in submitting a response, please contact: Wilmari Strachan.
- GG42980 – 2020 GEN NN 25:
Notice Inviting Comments Regarding The Draft Radio Frequency
Spectrum Assignment Plan for The Frequency Band 2500 to 2690 MHz
- on 31 January 2020, ICASA published a notice inviting comments regarding the Draft Radio Frequency Spectrum Assignment Plan for the Frequency Band 2500 to 2690 MHz (IMT2600), which can be accessed here.
- interested persons are invited to submit written representations by no later than 16h00 on 13 March 2020. Written representations should be for the attention of: Mr Manyaapelo Richard Makgotlho, email: firstname.lastname@example.org.
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