ELECTRONIC COMMUNICATIONS

In terms of the Electronic Communications Act 36 of 2005 (the EC Act) , electronic communications services and the networks used to provide such services are licensed separately.  The Telecommunications Act 103 of 1996, which was repealed by the EC Act, licensed vertically integrated operators as a whole.  Existing licences issued in terms of the Telecommunications Act are being converted by ICASA to one or more appropriate licences in terms of the EC Act in respect of the networks operated and services provided by licensees. 

OPERATORS OF ELECTRONIC COMMUNICATIONS NETWORKS AND SERVICES

At present, there are two operators licensed to provide a fixed line service, the incumbent Telkom Limited and the second national operator, Neotel (Proprietary) Limited.  In terms of their licences under the Telecommunications Act, these operators are licensed to provide the local access, long distance and international services.  At present, Telkom has exclusive access to the local loop and to the SAT-3 submarine cable although it is contemplated that open access requirements will be imposed in relation to these facilities in the near future.
 
The South African government holds 38% of the shares in Telkom, with the Public Investment Corporation (an investment vehicle wholly owned by the government) holding 15.7% of the shares.  Elephant Consortium, a black economic empowerment group has a 5.6% shareholding, 4.3% of shares are held by Telkom subsidiaries and 36.4% are listed on the Johannesburg and New York stock exchanges.  Neotel has three shareholders. These are SOE Company, comprising the state owned entities Eskom Holdings Limited and Transtel, the telecoms division of Transnet Limited, which holds 30% of the shares, Nexus Connexion (Pty) Ltd, which holds 19 per cent of the shares and SEPCO (Pty) Ltd, made up of the Tata Group incorporated in India, CommuniTel (Pty) Ltd and Two Consortium (Pty) Ltd, which holds 51% of the shares. Sentech, which is responsible for broadcasting signal distribution in South Africa, provides multimedia services and an international telecoms gateway service enabling it to operate as a carrier of carriers. The state owns 100 per cent of the shares in Sentech.

Three mobile operators, Vodacom, MTN and Cell C are licensed to provide mobile services, with Virgin Mobile operating a virtual network to provide such services.  Telkom holds50% of the shares in Vodacom. The remaining 50% is held by private shareholders. MTN, Cell C and Virgin Mobile are privately owned in full.

BOWMAN GILFILLAN’S EXPERIENCE

Bowman Gilfillan has, since 1999, advised ICASA (and its predecessor-in-law, SATRA) regarding a range of telecommunications matters. We have also acted for a wide variety of private clients in telecommunications matters.

In particular, we have assisted ICASA with the drafting of licence conditions in the following matters:

• the drafting of the licence conditions for Cell C after the third mobile cellular telecommunication service licence was awarded to it in 2000;
• the amendment and drafting of the conditions of licence of MTN and in 2002.

Bowman Gilfillan advised SATRA and ICASA on certain aspects of the licensing process in respect of the third mobile cellular telecommunication service licence, including the High Court judicial review application by one of the unsuccessful applicants for that licence, NextCom.

In addition, Bowman Gilfillan has advised ICASA on the following other telecommunications matters:

• the proposed (but abortive) acquisition by Portugal Telecom of shares in M-Cell Limited, the holding company of MTN;
• the allocation of 1800MHz frequency spectrum to MTN and Vodacom;
• certain aspects of the development of a regulatory framework for value-added network services.

Bowman Gilfillan has also advised private-sector clients on a number of telecommunications matters, including the following:

• We advised Nexus Connexion on its successful bid for the acquisition of the 19% black economic empowerment stake in the Second National Operator.
• We advised MTN in relation to the draft Convergence Bill and assisted it in making submissions to government on the draft Bill.
• We advised SBC and Telecom Malaysia on their acquisition of a 30% equity stake in Telkom, and also on certain aspects of the recent Telkom IPO.
• We advised an international consortium on the regulatory aspects of the proposed installation of a submarine fibre-optic cable around the continent of Africa.
• We advised SES-Global, an international satellite operator, on telecommunications regulation in various southern African jurisdictions.
• We advised MTN on the payment of fees, in terms of section 30A of the Telecommunications Act for access to radio frequency spectrum in the 1800 MHz frequency band.
• We advised VNU World Directories in respect of the legal aspects of the publication of telephone directories in South Africa.
• We advised Telecom Lesotho on various regulatory and licensing issues, including a tariff dispute with the Lesotho Telecommunications Authority and a judicial review application in the Lesotho High Court concerning encroachment by other licensees on its exclusivity rights under its fixed-line operator licence.
• We advised two foreign clients on the legality, in terms of the Telecommunications Act, of so-called “cellular firewall” mechanisms (devices that transmit modulated radio waves which prevent communication between mobile phones and cellular systems).
• We have advised a number of international clients, including internet service providers, in relation to various aspects of VANS licences.
• We have advised shareholders in telecommunication service licensees in Botswana, Namibia, Zimbabwe and Malawi on a range of regulatory and commercial matters.