Icasa preliminarily concluded that South Africa's current system for admitting new telecommunications operators to the market is inefficient, and therefore potential operators should be allowed to apply for licenses directly.
In a discussion document published in the Government Gazette on Friday, the regulator noted that the current regime, under which a newcomer must acquire an existing license from its owner and then obtain approval from Icasa for the transfer, 'has not been effective or efficient in promoting competition.'
It was found that the demand for new licenses 'appears high,' and issuing them would help reduce what was termed 'artificial entry barriers created by existing I-ECNS licensees in the secondary market.' The regulator's preliminary view is that the benefits of new licenses are likely to outweigh the associated costs.
This concerns Individual Electronic Communications Network Service Licenses (I-ECNS), which are necessary for operating a national or provincial scale network. Icasa has issued 470 such licenses but reported that most of them are 'largely inactive or dormant,' approving only about 11 transfers of ownership or control per year.
Since Icasa cannot issue new I-ECNS licenses, owners of unused licenses can set prices independently. The company Amatole Telecommunications informed the investigation that a pair of individual licenses—one for network operation, another for selling services through it—costs over one million rand on the secondary market, excluding the application fee for transfer to Icasa of 84,738 rand per license. Satellite operator Sateliot stated that many license holders are 'non-operational companies that cannot be contacted.'
Icasa stated that it does not deem it necessary to intervene directly in the secondary market. Instead, it indicated that the most effective solution is a direct licensing mechanism, 'where market access no longer depends on the incumbent licensee.' Furthermore, guidelines for approving license transfers are planned to be published, and the introduction of a 'use it or lose it' rule is being considered to prevent license hoarding.
Applicants for new licenses will still have to meet the legal, technical, financial, and ownership requirements set out in the Electronic Communications Act, and Icasa reserves the right to refuse them. However, the regulator noted that 'the possibility of failure is not generally considered a sufficient reason to prohibit market entry,' and the commercial viability of a new operator should primarily depend on 'the applicant and its investors.'
Pursuant to section 5(6) of the Act, Icasa can only accept applications for new I-ECNS licenses in accordance with the policy direction of the Minister of Communications. Minister of Communications Solly Malatsi issued such a directive in August 2025, requesting it from the investigation, after which Icasa launched the process last November.
The Internet Service Providers Association (Ispa) stated in its submission that Icasa had been seeking such a directive since 2016. The association noted that the regulator told parliament that it supported direct applications and officially described the transfer process as an 'unjustified administrative burden.' Cell C held a different view, arguing that Icasa had interpreted section 5(6) too narrowly and could have acted based on existing policy directives.
Icasa received 33 submissions, which were largely divided along predictable lines. Vodacom stated that it sees no barrier to entry in the current structure, although it criticized Icasa's execution. MTN stated that international data indicates that two or three infrastructure operators 'are usually sufficient to ensure effective competition,' and that there is 'no evidence base to justify a new licensing window.' MTN insists that Icasa wait for the results of numerous license renewals scheduled for 2028 and 2029. Telkom suggested that the marginal effect of new licenses would be 'insignificant,' while Rain stated: 'Market entry barriers are economic, not administrative.'
Satellite operators and smaller players advocated for the opposite position. SpaceX argued that the transfer system has the effect of 'designating incumbents as the first arbiter on whether a new entrant can enter the market,' and in the worst case, 'contributing to rent-seeking by opportunistic licensees who no longer need their licenses.' Amazon Leo, Eutelsat, Plan-S, and the Global Satellite Operators Association also supported direct licensing. Eutelsat explained that despite having jurisdiction in South Africa, it had to rely on a partnership model to operate ground infrastructure in the country.
Icasa emphasized that this investigation 'does not concern new I-ECNS licenses for providing satellite-based services,' as the licensing regime is technologically neutral. However, this works both ways: satellite operators will be able to apply for any new licenses. SpaceX informed the investigation of its intention to obtain both individual licenses 'for providing a national service.'
Nevertheless, direct licensing will not eliminate the main hurdle faced by Starlink. Section 9(2)(b) of the Act sets a requirement for a minimum shareholding of 30% by historically disadvantaged groups for individual license applications, 'or such other conditions or higher percentages that may be prescribed,' and Telkom noted that the Supreme Court ruled that this requirement also applies to license transfers.
SpaceX and the satellite operators' association called on Icasa to use the phrasing 'other conditions' to accept alternatives, such as investment programs equivalent to equity capital. The Icasa document only states that new applicants will remain subject to 'applicable ownership and empowerment obligations.' Since the invitation to apply was not open, Icasa's position this year was that satellite operators should acquire an existing license.
Icasa stated that a restrictive approach to new licenses could be 'difficult to reconcile' with its plans to release a larger volume of mobile spectrum within the International Mobile Telecommunications (IMT) roadmap, spectrum used for 4G and 5G networks. Written comments on the discussion document are accepted for 45 working days after publication, i.e., in early January 2027. After this, Icasa may hold public hearings, after which it will have 90 working days to publish the findings document. Cell C noted in its submission that Icasa's initial notification stated that the outcome of the investigation would allow the minister to consider issuing further policy direction. According to this schedule, an invitation to apply for new licenses is unlikely before the second half of 2027.