If ICASA succeeds…

Big companies such as Vodacom and MTN could see their license fees shot up from R740m to plus minus R1.2bn and R500m to plus minus R800m respectively per year. Smaller companies will however be dealt the most severe blow, especially voice and data carriers. The voice and data carrier ECN will for example see its license fee shot up from R100 000 to R3m per year. This is a bit steep if one considers that ECN’s turnover will be about R100m this year.

ICASA has stated in their defense that ‘the fees are structured in a way that promoted competition and does not create a barrier to entry, since start-up operators with a revenue of less than R1m will pay a lower fee to help them survive’ (Concern as Icasa seeks to hike license fees, Lesley Stones, Business Day). Now this may look like ICASA is trying to make it easier for start-up operators, but if one considers that any amendment to a license will cost R250 000, then it’s clear that the bunch at ICASA went barmy because expenditure at ICASA for the whole of last year was about R250 000. ICASA has tried to justify the increase by indicating that its expenditures are expecting to increase with 24% a year over the next 5 years. It is however clear that ICASA is taking the piss considering that a 100% increase in expenditures a year over the next 5 years will not even justify the license amendment fee increase to R250 000.

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