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South Africa’s telecom industry reacts to increased licence fees

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sa_minister_of_comm.jpgTHE Independent Communications Authority of South Africa’s plans to raise licensing fees by about 30-times has left the telecoms industry seething.

Analysts said the increase will impact negatively on the entire industry by raising costs for consumers, discouraging investment and delaying industry normalisation.

“The proposal flies in the face of the Electronic Communications Act (ECA) which aims to increase competition and reduce costs in the telecoms industry. While Icasa will at last issue the new electronic communication network service and electronic communications service licenses, it is simultaneously putting up yet another barrier by proposing exorbitant license fees. We have only until 5 December to submit comment, as Icasa is of the view that it must finalise the fees before January 19 deadline for conversion of all Telecommunications Act licences, which would include the VANS licenses, John Holdsworth, chief executive officer ECN.

“Icasa now proposes that the annual variable licence fee be increased 30 times to 3 percent of gross revenue, less certain permitted deductions. In addition, the definition of gross revenue is too wide and includes revenue from non-licensed services, such as that from handset sales and installations. This is ridiculous and inconsistent. In our view license fees should only be calculated on revenue generated from licensed services,” ” ECN head of regulatory affairs Jeremy Macdonald said.

ECN estimated that the proposed new licensing fees, based on last year’s National Revenue Fund financial report, will enable Icasa to raise approximately R2,1-billion per annum from the telecoms industry alone.

By ITNewsAfrica.com

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