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ISPA slams 650% license fee increase for SA telecommunication providers

The publication of consultation responses from major telecommunication companies in South Africa has revealed a barrage of criticism of the industry regulator.

The Independent Communications Authority of South Africa (ICASA) proposed last year to change the way annual license fees payable by providers was calculated, but companies and associations have responded angrily citing a lack of clarity and severe ineptitude on ICASA’s behalf.

Changes are due to come into effect on April 1, 2013, but the Internet Service Provider’s Association (ISPA) led the criticism by claiming they were set for a 650 percent increase – from 0.1 percent to 0.75 percent.

In their submission published today (Monday), ISPA states: “The failure to substantiate the proposed value of 0.75 percent goes to the integrity of the public participation process.”

It added ominously: “In the absence of any stated rationale for the setting of applicable percentage at 0.75 percent, that such applicable percentage is too high and that the net effect will be to increase the cost of communication in South Africa at a time when the country can ill-afford it.”

ISPA also said the uncertainty surrounding the hike in fees, less than three months away, is making it difficult for licensees to “manage shareholder expectations” in regards to the future costs.

It added members providing voice services were “especially hampered” because they were trying to put together their new rates for March 1, 2013, when the next reduction in termination rates come into effect.

In Vodacom’s submission, they plead with ICASA to implement the levying of fees by using a Profit Before Tax (PBT) measure and said the 2009 Annual Licence Fee Regulation was “not clearly drafted” and resulted in “wide ranging interpretation and inconsistent calculations of fees”.

Vodacom joined ISPA in claiming the proposal of a 0.75 percent rate was “excessive” and explained the authority should only be raising enough funds to carry out their day-to-day tasks.

ICASA has published the responses of 15 telecommunication companies which also includes MTN, Telekom and e.tv.

Posted in: FeaturedTelecoms

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