South African ISPs now forced to have black owners

The Independent Communications Authority of South Africa (ICASA) has published new regulations which require all telecoms licensees, including ISPs, to have black owners.

“An Individual Licensee must have a minimum of 30% of its ownership equity held by black people, determined using the flow through principle,” the regulations state.

The regulations also require individual licensees to have a minimum of 30% of its ownership equity held by historically disadvantaged groups (HDG).

These historically disadvantaged groups include black people, women, people with disabilities, and youth.

“An Individual Licensee must comply with both the black equity requirement and the HDG equity requirement,” ICASA said.

Both individual licensees and class licensees must have a minimum B-BBEE contributor status of level 4.

The regulator said these regulations are aimed at promoting equity ownership by historically disadvantaged groups and promote B-BBEE in South Africa’s ICT sector.

The regulator will aim to achieve its diversity and transformation goals by:

  • Promoting B-BBEE, with particular attention to the needs of women, opportunities for youth, and challenges for persons with disabilities.
  • Prescribing the application of the Historically Disadvantaged Group (HDG) equity requirement.
  • Providing the manner in which compliance with the HDG equity requirement, Black Equity requirement and B-BBEE contributor status level requirements will be verified, monitored and enforced.

Licensees are required to provide ICASA with proof demonstrating compliance with the regulations on an annual basis.

Large individual licensees are given 36 months to comply with the regulations while class licensees and SMMEs have 48 months.

Penalties of up to R5 million or 10% of the licensees’ annual turnover will be applied where a licensee fails to maintain the mandatory minimum requirement.

Regulations about the ownership by Historically Disadvantaged Groups in the ICT Sector

Now read: Forcing ISPs to have black owners is a disaster – Expert

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South African ISPs now forced to have black owners