More USALs licensed

By Damaria Senne, ITWeb senior journalist

Johannesburg, 14 Aug 2006

Successful applications for the second phase of underserviced area licensees (USALs) will be announced today, the Independent Communications Authority of SA (ICASA) says.

The 14 licensees will provide telecoms and data services in the following districts: Bohlabela, Vhembe (Limpopo), Umkhanyakude, King Shaka (KwaZulu-Natal), Chris Hani, Ukwahlamba (Eastern Cape), Northern Free State, Thabo Mofutsanyana (Free State), Metsweding, Westrand (Gauteng), Nkangala, Eastvaal (Mpumalanga), Bophirima and Bojanala Platinum (North West).

Phineas Moleele, ICASA USAL project manager, previously stated the licensing terms of all new USALs would be the same as for the first seven, which were licensed in December 2004.

This is despite government and the Universal Service Agency (USA), among others, acknowledging the first seven USALs are struggling to succeed.

One of the key problems is USALs can only operate in low-income areas where the national operators are unwilling to go, Tebogo Thupatlaase, USA manager of regulatory and corporate affairs, has said on numerous occasions.

Access to finance

Additionally, the licensing terms, which aim to ensure previously disadvantaged communities own the telecoms infrastructure, also hinder access to finance from financially secure investors who are unlikely to be from these communities, he noted. Investors expect to own what they pay for, he said.

The seven operational USALs have also been waiting for a long time to be granted spectrum on channel 65, which will enable them to begin operating independently from the national operators.

This has, in turn, affected their ability to access funding for their operations, and, as a result, some of them are reported to have used portions of their R5 million capital funding for operational purposes.

A full report outlining the USALs` problems, as well as proposed solutions, will be debated at a conference from 28 to 30 August. The USA has confirmed the USAL report will be made public.

Moleele noted 27 licences were initially planned and the third round of applications would yield another seven licensees.