I want to be an Internet Service Provider. Do I need a license?

The registration and granting of electronic communications licenses in South Africa is performed by ICASA under the Electronic Communications Act 36 of 2005 (the ECA).

Why are there licensing requirements?

Governments impose licensing requirements so as to ensure that:

  • Scarce resources such as frequency and numbers can be efficiently allocated and coordinated
  • Services are provided in under-serviced and rural areas
  • They have authority over licensees for the purposes of regulating markets and competition, and
  • Consumers are protected in their dealings with service providers

When is a licence required?

 As a general rule a licence or licence exemption is required whenever communications are carried from one point to another.

Service licensing framework in South Africa

There are two main categories of service licence available under the ECA:

Electronic Communications Network Service (ECNS) licences: These licences 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) licences: These licences 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 – 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 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.

Individual ECNS and ECS licences are issued for an initial term of 20 years. 

Class ECNS and ECS licences are issued for an initial term of 10 years. All of these licence types can be renewed prior to the expiration date, upon application to ICASA and payment of a renewal fee to ICASA.

All licence holders must make annual payments to ICASA of the Annual Licence Fee and the USAF Contribution; further information on this can be found at the following link. All licence-holders must also attend to all standard and ad hoc compliance reporting obligations imposed by ICASA.

Class ECS and Class ECNS licences may be registered directly with ICASA, following submission of registration documentation and payment of Class licence registration fees to ICASA; Ellipsis can assist with this process, as set out here.

IECNS, IECS and the old national CECS licences may be transferred by obtaining ICASA’s approval for the transfer following submission of an application for same to ICASA accompanied by a transfer application fee; Ellipsis can assist with the sourcing and transfer of these licences, and you can get more information on this by contacting sam@ellipsis.co.za.

Service licensing is distinct from two other forms of licensing: type approval and frequency licensing. Where these latter forms of licensing are required they must be obtained separately. An ECNS license is required before a licensee will be entitled to apply for radio frequency spectrum licensing. You can read more about these forms of licensing at type approval and frequency licensing.

License exemptions

Certain services are regarded as being of limited socio-economic importance and can be provided on a license-exempt basis, subsequent to application for a license exemption to ICASA having been granted.

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