Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News

      Blue Label Telecoms to change its name as restructuring gathers pace

      11 July 2025

      Get your ID delivered like pizza – home affairs’ latest digital shake-up

      11 July 2025

      EFF vows to stop Starlink from launching in South Africa

      11 July 2025

      Apple plans product blitz to reignite growth

      11 July 2025

      Nissan doubles down on South Africa despite plant uncertainty

      11 July 2025
    • World

      Grok 4 arrives with bold claims and fresh controversy

      10 July 2025

      Bitcoin pushes higher into record territory

      10 July 2025

      Cupertino vs Brussels: Apple challenges Big Tech crackdown

      7 July 2025

      Grammarly acquires e-mail start-up Superhuman

      1 July 2025

      Apple considers ditching its own AI in Siri overhaul

      1 July 2025
    • In-depth

      Siemens is battling Big Tech for AI supremacy in factories

      24 June 2025

      The algorithm will sing now: why musicians should be worried about AI

      20 June 2025

      Meta bets $72-billion on AI – and investors love it

      17 June 2025

      MultiChoice may unbundle SuperSport from DStv

      12 June 2025

      Grok promised bias-free chat. Then came the edits

      2 June 2025
    • TCS

      TCS+ | MVNX on the opportunities in South Africa’s booming MVNO market

      11 July 2025

      TCS | Connecting Saffas – Renier Lombard on The Lekker Network

      7 July 2025

      TechCentral Nexus S0E4: Takealot’s big Post Office jobs plan

      4 July 2025

      TCS | Tech, townships and tenacity: Spar’s plan to win with Spar2U

      3 July 2025

      TCS+ | First Distribution on the latest and greatest cloud technologies

      27 June 2025
    • Opinion

      In defence of equity alternatives for BEE

      30 June 2025

      E-commerce in ICT distribution: enabler or disruptor?

      30 June 2025

      South Africa pioneered drone laws a decade ago – now it must catch up

      17 June 2025

      AI and the future of ICT distribution

      16 June 2025

      Singapore soared – why can’t we? Lessons South Africa refuses to learn

      13 June 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CambriLearn
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Wipro
      • Workday
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » In-depth » Fears as Usaasa ‘tax’ set to rise

    Fears as Usaasa ‘tax’ set to rise

    By Sunil Gopal25 May 2015
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    money-640

    Telecommunications & postal services minister Siyabonga Cwele presented his budget vote speech last week and concealed among the details is a ticking time bomb that’s about to go off on mobile operators, broadcasters and Internet service providers.

    Cwele announced he would “review the levy for the Universal Service & Access Fund (Usaf) … to align ourselves to the 1% charged by developing countries”.

    The Electronic Communications Act of 2002 requires all licence holders to contribute 0,2% of their turnover to the Usaf.

    The change is bound to have big implications for mobile operators in particular, whose revenues run into tens of billions of rand.

    Telecoms operators are cautious about the minister’s proposal.

    Vodacom spokesman Richard Boorman said the company was still studying it. Using Vodacom’s latest figures, TechCentral calculates that its payments into the Usaf will increase from about R125m to about R620m/year.

    MTN chief corporate services officer Graham de Vries said only: “MTN takes note of the minister of telecommunications’ budget vote speech and is currently studying it. We hope to engage further with the ministry on this matter.”

    Telkom spokesman Jacqui O’Sullivan said it would support a review of the regulatory framework governing the fund.

    “We will work with the department … in their review process and will continue to contribute to the fund in support of its objectives,” she said.

    “We will also be able to provide a more informed view of the impact of the proposed levy increase once we have clarity on the changes and have conducted an impact assessment.”

    Cell C spokesman Karin Fourie said the operator would not support an increase in the contributions.

    The intended beneficiary of the increase is the Universal Service & Access Agency (Usaasa), an agency with a chequered history.

    The last few years has seen Usaasa enveloped in allegations of corruption involving both the boards and recent CEOs and other officials. Such has been the malaise that the national treasury decreased its funding from a high of R83,1m in the 2011/2012 financial year to R60,1m in the 2013/14 period.

    The Special Investigating Unit is probing a host of allegations against Usaasa, including “serious maladministration in connection with the affairs of the agency and its board”.

    In addition to providing telecoms infrastructure in underserviced parts of South Africa, Usaasa is tasked with managing the roll-out of government-subsidised set-top boxes for digital terrestrial television migration, a process that has also been mired in controversy.

    The minister’s announcement is in keeping with the proposals of the ICT policy review report released in March this year. Legislation allows for the collection of monies via national treasury and for its distribution through the department.

    However, the report recommends that the Usaf be transformed into the ICT Development Fund, which would “allow for the aggregation of new incremental state funding with private sector funding and donor funding”.

    In addition, it proposes that Usaasa be dissolved with policy and regulatory functions distributed between the department of telecoms and communications regulator Icasa respectively. Importantly, it wants a new entity to collect and manage the funds.

    Internet Service Providers’ Association regulatory advisor Dominic Cull said the concern for most licensees is the “opaque nature of the Usaf and the widely held perception that funds contributed to date have not been constructively applied or properly accounted for”.

    He agreed with the need to reform both Usaasa and the Usaf in line with the policy review process and reiterated the need for “transparent funding” processes.

    Lisa Thornton
    Lisa Thornton

    “An increase as proposed will ultimately increase the cost to communicate: in a sense it is an indirect tax on communications consumption and therefore must be rationally applied.”

    Cull said the Minister’s statement “comes at a time where there remain questions as to how the broadband network deployment initiative announced by the president in his state-of-the-nation address will be funded”.

    “It is to be welcomed that there is recognition that the use of Usaf monies to deploy networks should automatically result in such networks — whoever they may be deployed by — must operate on an open-access basis,” he said.

    Electronic communications legal specialist Lisa Thornton said the proposed increase in contributions is not out of line with other countries.

    She cited the example of Uganda and Nigeria, where licensees pay 1% of their turnover to a universal service fund.

    Tanzania and Kenya only pay 0,3% and 0,5% respectively. However, licence holders in the US pay 4% of their turnover, with India paying 5% and Malaysia 6%, she said.

    She said both Icasa and the minister have to follow fair administrative procedures in making sure that consultation with both beneficiaries and operators takes place.

    “The question really is whether the need has been sufficiently evaluated,” Thornton said.  — © 2015 NewsCentral Media



    Cell C Dominic Cull Graham de Vries Ispa MTN Siyabonga Cwele Telkom USAF Vodacom
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleMitsubishi Electric to set up shop in SA
    Next Article Vitriol flies as MTN strikers dig in

    Related Posts

    Blue Label Telecoms to change its name as restructuring gathers pace

    11 July 2025

    Spam call epidemic: operators say their hands are tied

    10 July 2025

    Vodacom, Maziv deal now looks likely after CompCom U-turn

    8 July 2025
    Company News

    $125-trillion traded: Binance redefines global finance in just eight years

    11 July 2025

    NEC XON welcomes HPE acquisition of Juniper Networks

    11 July 2025

    LTE Cat 1 vs Cat 1 bis – what’s the difference?

    11 July 2025
    Opinion

    In defence of equity alternatives for BEE

    30 June 2025

    E-commerce in ICT distribution: enabler or disruptor?

    30 June 2025

    South Africa pioneered drone laws a decade ago – now it must catch up

    17 June 2025

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2025 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.