South Africa- Under-Serviced Area Licence’

Editor’s Note:


The following information was reported in ITU Trends in Telecommunications Reform – 2004/05:  Licensing in an Era of Convergence (Geneva:  ITU, 2004), and was adapted from the website of the South African Department of Communications [available on-line at:].





Under the South African Telecommunications Act 103 of 1996, no entity can provide telecommunication services without a licence.   The Act gave incumbent Telkom an exclusive licence to provide “public switched telecommunication services,” (PSTS services) which include national long distance service, international service, local access service and public pay telephone service.


In November 2001, amendments to the Act created a new license category, the “under-serviced area licence” (USAL).  The goal was to spur the growth of telecommunications services in under-served areas.  Under the scheme, certain small and medium-sized enterprises were allowed to apply for licences to provide telecommunications services in geographic areas with a teledensity of less than 5 per cent.  The USAL allowed them to offer services such as VoIP, fixed mobile service and public pay telephones.  USAL licensees were nevertheless required to transport their long distance traffic through the trunk networks of any of the national fixed and mobile operators and, internationally, through three designated international gateway licensees.


On 17 September 2004, the South African Department of Communications (DOC) awarded a “second national operator” (SNO) licence to an alliance of companies, allowing them to compete with Telkom in the provision of PSTS services.  Earlier, on 2 September 2004, the DOC had issued new policies aimed at accelerating the telecommunications liberalization process.  Some services, such as public pay phones, are scheduled to be liberalized by February 2005.  The DOC also noted that it was even considering removing licensing requirements for pay phone operators.[1]




[1] Policy Announcement by the South African Minister of Communications, Dr Ivy Matsepe-Casaburri, 2 September 2004 available at


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