Photo by: Duane Daws
Telecommunications provider Telkom on Tuesday said it had withdrawn an application to the Independent Communications Authority of South Africa (Icasa) for the transfer of licences from Business Connexion (BCX) to Telkom, as “it would not be required” following closer scrutiny of the Electronic Communication Act (ECA).
The group, which placed particular focus around sections 13(1) and 31(2A) of the amended Act, said it was now only awaiting approval from South Africa’s competition authorities for its proposed takeover of BCX to proceed.
Section 13(1) and 31(2A) of the ECA, No 36 of 2005 stipulated the need for written permission from Icasa for the transfer of the control or ownership of electronic communication services (ECS) and electronic communication networks services (ECNS) licences and radio frequency spectrum licences.
This emerged weeks after legal representatives of Telkom argued that Icasa lacked the power to process the transfer of control of licences, after the authority failed to amend its regulations in line with the amended ECA, which was promulgated in May last year.
Before the promulgation of the ECA amendments, the transfer of control did not require the prior approval of Icasa – only a notification to the authority was required in terms of Icasa regulations if there was a change of ownership.
Telkom stated that there were now no clear regulations influencing the process of transfer of control, leaving a regulatory vacuum, with the Internet Service Providers’ Association (Ispa) echoing the sentiments and calling into question the procedures surrounding the proposed transfer of control.
Telkom had questioned the process during a two-day public hearing in January into Vodacom’s application for transfer of control of Neotel’s ECNS and ECS licences, as well as the radio frequency spectrum licences, as part of a R7-billion acquisition.
Telkom and Ispa suggested that Icasa halt the current process of reviewing the proposed acquisition pending the promulgation of the “requisite regulations or suitable amendment” of the existing transfer of ownership and control regulations.
Telkom and BCX had applied to Icasa in August 2014 for written approval for a change in control to Telkom; however, on review, Telkom said “the view has been taken that [this] would not be required”.
“It is the opinion of both companies [Telkom and BCX] that the transfer of the control of the licences will not be required at this stage and that existing licences will be appropriate for continued compliance,” Telkom managing executive for group communication Jacqui O’Sullivan told Engineering News Online.
Telkom’s buyout of BCX remained subject to final approval by the South African competition authorities.
“The transaction remains on track and both parties remain entirely committed to the successful conclusion of the deal. As the regulator of the industry, Telkom remains in detailed discussions with Icasa on this and a number of other matters,” she concluded.