ICASA has finalised regulations aimed at facilitating the participation of black South Africans and Highly Disadvantaged Groups, who include women and people with disabilities, in South Africa’s ICT sector. The regulations stipulate that both black South Africans and Highly Disadvantaged Groups (HDGs) must hold a minimum of 30% of the individual licensee’s ownership equity.
With respect to the HDG requirement, the licensee will be required to provide ICASA with proof of its compliance with the HDG equity requirement on an annual basis and when making any kind of application pertaining to the licence. The regulations state that this requirement will be determined using the “flow through principle” (as defined in the B-BBEE codes).
In addition to the HDG requirement, 30% of an individual licensee’s ownership equity (as determined using the “flow through principle”) must be held by Black South Africans (the Black equity requirement).
Noteworthy, the final regulations have clarified a grey area one analyst had termed “onerous” to potential investors in the ICT sector – compliance with both black equity ownership and the ownership of HDGs. While the final regulations require an individual licensee to comply with both the Black equity requirement and the HDG requirement, the regulations recognise that compliance with the Black equity requirement will also constitute compliance with the HDG equity requirement.
Furthermore, an individual licensee must also achieve and maintain at least a level four B-BBEE contributor status level. As with the HDG equity requirement, the licensee will, be required to provide ICASA with proof of its compliance with the Black equity requirement on an annual basis and when making any kind of application pertaining to the licence.
An individual licensee must prove compliance with the HDG equity requirement and the Black equity requirement by way of a B-BBEE verification certificate and/or a credible assurance report issued by a SANAS-recognised and accredited verification agency.
Individual licensees and class licensees that are exempted micro-enterprises (EMEs) (ie, an entity with an annual total revenue of ZAR10 million or less) or qualifying small enterprises (QSEs) (ie, an entity with an annual total revenue of between ZAR10 million and ZAR50 million). The exempted organisations can provide a sworn affidavit or certificate from the Companies and Intellectual Property Commission to confirm their annual total revenue their B-BBEE contributor status level. Tndividual licensees can tender proof of compliance with the Black equity requirement.
