Overview of electronic communications licensing

[ellipsis]

Hi

Posts below are an attempt to explain how service licensing for electronic communications works in SA. Feel free to post any queries in the thread.

 

[ellipsis]

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

Service licensing framework in South Africa
There are two main categories of service licence available under the ECA:

• Electronic Communications Network Service (ECNS) licenses: these licenses 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) licenses: these licenses 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 and 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 physical 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 on a wholesale basis.

It is helpful to consider the following fundamental distinctions between these licence types:

• Wholesale vs Retail: An ECNS licensee wholesales network capacity to ECS licensees or other ECNS licensees for resale – it does not deal with the public. An ECS licensee on the other hand offers retail services to the public (and may also provide wholesale services for resale to third parties).
• Physical vs Virtual Networks: An ECNS licensee operates physical networks made of facilities such as fibre or base stations. An ECS licensee operates virtual networks such as VPNs and MPLS networks.

 

[ellipsis]

The licensing framework is technology-neutral. Thus, for example, while Telkom was restricted to the provision of fixed lines services in terms of the Public Switched Telecommunications Network (PSTN) licence issued to it under the Telecommunications Act, it is under no such restriction in terms of the IECNS and IECS licences which it now holds. Indeed Telkom is already providing mobile services while the mobile network operators are self-providing fixed lines to service their backhaul requirements.

The ECA breaks down the licence categories into the two subcategories set out below:

ECNS Licences:

• Individual ECNS (IECNS) : This allows you to roll out your own network nationwide or across a province.
• Class ECNS (CECNS) : A class ECNS allows you to roll out your own network in a district or local municipality. In other words you will choose to operate in a municipal area and provide access services to consumers in that area.This is the form of licence you would require if you wanted to set up your own network focusing on a smaller area. South Africa has 48 district municipalities and 231 local municipalities as well as 7 metropolitan municipalities.

ECS Licences:

• Individual ECS (IECS) :This licence allows you to provide services to your customers over the network of an ECNS licensee, including voice or VoIP services which use numbers taken from the National Numbering Plan. Examples of other services that can be provided include Internet access, Email, Protocol conversion, Virtual Private Networks (VPNs) & Multi Protocol Labelling Systems (MPLS).
• Class ECS (CECS) : This licence allows you to provide the same services as the Individual ECS licence except for voice services requiring numbers from the national numbering plan.

 

[ellipsis]

Individual ECNS and ECS licences are issued for twenty years. Class ECNS and ECS licences are issued for ten years. All of these licence types can be renewed upon payment of a renewal fee.

Annual licence fees are set at 1.5% of Gross Profit (total revenue derived from licensed services less total costs directly incurred in the provision of such services). The calculation of the amount due must be based on audited financial statements (or sworn statements where audited statements are not required by law), which must be submitted along with the payment.

Fees can be paid quarterly or annually: late payments will be subject to stiff interest penalties and fines for non-compliance. Licensees with a total turnover less than R13 million are exempted from the obligation to make payment.

ICASA General Licence Fee Regulations 2009 - http://www.ellipsis.co.za/general-licence-fee-regulations/

Licensees are further required to pay a contribution to the Universal Service and Access Fund (USAF) - an entity set up by Government to fund development of services in rural areas - amounting to 0.2% of annual turnover derived from licensed services.

Licences may be assigned, ceded or transferred after the approval of an application to ICASA. A transfer application fee is payable.

 

[ellipsis]

There are a number of other compliance obligations which flow from the holding of a service licence. The list below is not intended to be exhaustive:

• Licensees must pre-file tariffs with ICASA;
• A bi-annual report must be submitted setting out tariffs charged over the previous six month period;
• A bi-annual report must be submitted in respect of compliance with prescribed quality of service standards;
• Licensees are required to develop a Code of Conduct as well as document the process for the receipt of complaints; and
• A bi-annual report must be filed detailing complaints received and their resolution.

 

[GrahamD]

Type Approval Certificate

Hi,

I am considering manufacturing my own tablet PC's with embedded 3G modem. I have been advised that we will need a Type Aproval Number to be able to import the tablets if they have an embedded 3G module inside. Can I use the Type Approval Number for the 3G modem chip that will be embedded in our tablet or do I need to get my own Type Approval Number for my tablet? How do I go about it?

 

[ellipsis]

Hi,

I am considering manufacturing my own tablet PC's with embedded 3G modem. I have been advised that we will need a Type Aproval Number to be able to import the tablets if they have an embedded 3G module inside. Can I use the Type Approval Number for the 3G modem chip that will be embedded in our tablet or do I need to get my own Type Approval Number for my tablet? How do I go about it?

Hi Graham,
Please send me a PM with your contact details.

 

[Bern]

I had a quick question - if you provide a hotspot for a block of flats do you need an ECS license? Secondly if you host the hotspot server at the ISP that will be providing the badwidth (and connection to the building) do you need an ECS to sell resell bandwidth (as in bulk buy and manage user accounts yourself)?

 

[dominic]

I had a quick question - if you provide a hotspot for a block of flats do you need an ECS license? Secondly if you host the hotspot server at the ISP that will be providing the badwidth (and connection to the building) do you need an ECS to sell resell bandwidth (as in bulk buy and manage user accounts yourself)?

Hi Bern

Hotspot would generally be licence exempt as a small electronic communications network (SECN). Likewise resale of the ISP's service would be licence exempt resale.

Have a look at some detail - http://www.ellipsis.co.za/licensing/service-licensing/license-exemptions/ - and let me know if you have further queries

 

[ShaunCro]

Hi Ellipsis

How does one go about purchasing an ECS license, and what would the cost be? I have been trying to find out figures from the likes of openserve and IS on wholesale data, but they won't even talk to me without an ECS license. I'm trying to ascertain whether an idea will be feasible, but can't even get started that without this license.

Thanks

Shaun

 

[MickeyD]

Hi Ellipsis

How does one go about purchasing an ECS license, and what would the cost be? I have been trying to find out figures from the likes of openserve and IS on wholesale data, but they won't even talk to me without an ECS license. I'm trying to ascertain whether an idea will be feasible, but can't even get started that without this license.

Thanks

Shaun

Contact them (will be quicker): http://www.ellipsis.co.za/contact-us/

 

[ShaunCro]

Thanks, have done so.

 

[quik]

Hi ellipses

Do you perhaps know what ICASA and the law says with regards to service providers allowing numbers to be spoofed over their voice networks?

 

[ellipsis]

Hi ellipses

Do you perhaps know what ICASA and the law says with regards to service providers allowing numbers to be spoofed over their voice networks?

Legally, not allowed.
ICASA may choose to allow depending on the circumstances.