NEW EQUITY REQUIREMENTS FOR ICT SECTOR

In February 2020, the Independent Communications Authority of South Africa (ICASA) gazetted new draft control and equity ownership regulations for the ICT sector. The regulatory body is empowered by the Electronic Communications Act, 2005 to issue licences to telecommunications and broadcasting service providers, and monitor licensee compliance with rules and regulations in the public interest.

The primary objective of the new draft regulations is to ‘promote equity ownership by Historically Disadvantaged Persons (HDG)’ (i.e. black people, women, people with disabilities, and youth), and to give expression to the B-BBEE ICT Sector Code. The inclusion of the equity requirement will have a significant impact on new licence applicants, as well as existing licensees; and non-compliance with the regulations may carry a financial penalty of up to R5 million or 10% of the company’s annual turnover.

Most notably:

  • Individual Licensee applicants must ensure minimum 30% ownership equity by HDG, irrespective of their size or income level, throughout the licence period. This requirement applies to all new applications, transfers, renewals, and amendments.
  • Existing Licensees must ensure minimum 30% ownership equity by black people throughout the licence period.
  • Existing licensees must comply within 24-months of the publication of the Regulations, with 50% compliance within the first year.

If your business needs assistance with B-BBEE Ownership structuring (Generic or DTI Sector Codes) to meet these and other industry regulations, contact our office.

 

 

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