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
      Huge win for South Africa's Wi-Fi lobby in spectrum fight

      Mobile operators locked out as Icasa opens 900MHz of spectrum

      27 May 2026
      South Africa's right-to-repair vacuum

      South Africa’s right-to-repair vacuum

      27 May 2026
      Eskom breaks ground on R1.2-billion Lethabo solar plant

      Eskom breaks ground on R1.2-billion Lethabo solar plant

      27 May 2026
      4Sight earnings leap, led by back-office IT sales - Tertius Zitzke

      4Sight earnings leap, led by back-office IT sales

      27 May 2026
      South Africa to target children's screen time - Siviwe Gwarube

      South Africa to target children’s screen time

      27 May 2026
    • World
      AI boom hands Samsung chip workers life-changing bonuses

      AI boom hands Samsung chip workers life-changing bonuses

      27 May 2026
      Luce lit: Ferrari unveils its first electric car

      Luce lit: Ferrari unveils its first electric car

      26 May 2026
      Huawei claims chip design breakthrough

      Huawei claims chip design breakthrough

      25 May 2026
      Pope urges world to hit brakes on AI - Pope Leo

      Pope urges world to hit brakes on AI

      25 May 2026
      Nvidia does it again - Jensen Juang

      Nvidia does it again

      21 May 2026
    • In-depth
      Alfa's electric rebel - Alfa Romeo Junior Elettrica Veloce

      Alfa’s electric rebel

      29 April 2026
      Africa switches on as Europe dims the lights

      Africa switches on as Europe dims the lights

      9 April 2026
      The biggest untapped EV market on Earth is hiding in plain sight

      The biggest untapped EV market on Earth is hiding in plain sight

      1 April 2026
      AI, cybersecurity power standout year for Datatec - Jens Montanana

      The R16-billion tech giant hiding in plain sight

      26 March 2026
      The last generation of coders

      The last generation of coders

      18 February 2026
    • TCS
      TCS+ | The Up&Up Group on the hidden cost of AI - Jason Harrison

      TCS+ | The Up&Up Group on the hidden cost of AI

      13 May 2026
      Michael Rossouw

      TCS+ | The retirement decision most South Africans get wrong

      6 May 2026
      TCS | The Cape Town start-up listening for TB with AI - Braden van Breda

      TCS | The Cape Town start-up listening for TB with AI

      4 May 2026

      TCS+ | ‘The ISP for ISPs’: Vox’s shift to wholesale aggregator

      20 April 2026
      TCS | Werner Lindemann on how AI is rewriting the infosec rulebook

      TCS | Werner Lindemann on how AI is rewriting the infosec rulebook

      15 April 2026
    • Opinion
      Treasury's crypto crackdown is a betrayal of Mandela's promise - Duncan McLeod

      Treasury’s crypto crackdown is a betrayal of Mandela’s promise

      22 May 2026
      South Africa is sleepwalking into another AI policy failure - Celeste Labuschagne

      South Africa is sleepwalking into another AI policy failure

      20 May 2026
      AI won't fix your culture - it will expose it - Jackie Kennedy

      AI won’t fix your culture – it will expose it

      19 May 2026
      Treasury's crypto crackdown is a betrayal of Mandela's promise - Duncan McLeod

      Free calls, dead voice and Shameel Joosub’s Spanish ghost

      22 April 2026
      The conflict of interest at the heart of PayShap's slow adoption - Cheslyn Jacobs

      The conflict of interest at the heart of PayShap’s slow adoption

      26 March 2026
    • Company Hubs
      • 1Stream
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • Ascent Technology
      • AvertITD
      • BBD
      • Braintree
      • CallMiner
      • CambriLearn
      • CM Telecom
      • Contactable
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • HOSTAFRICA
      • Incredible Business
      • iONLINE
      • IQbusiness
      • Iris Network Systems
      • Kaspersky
      • LSD Open
      • Mitel
      • NEC XON
      • Netstar
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Telviva
      • Tenable
      • Vertiv
      • Videri Digital
      • Vodacom Business
      • Wipro
      • Workday
      • XLink
    • 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
      • Financial services
      • HealthTech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Policy and regulation
      • Public sector
      • Retail and e-commerce
      • Satellite communications
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » Sections » Telecoms » How a connectivity levy became a tax on telecoms

    How a connectivity levy became a tax on telecoms

    Industry experts warn that Usaasa's dysfunction has failed the rural South African communities it was meant to benefit.
    By Nkosinathi Ndlovu17 April 2026
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    How a connectivity levy became a tax on telecoms

    The legal and institutional framework underpinning South Africa’s universal service obligations in telecommunications is no longer fit for purpose, industry leaders have warned.

    The levy paid by licence holders increasingly resembles a general tax rather than a ring-fenced contribution to closing the country’s connectivity gaps, they said.

    Telecoms licensees pay 0.2% of their licensed revenue into the Universal Service and Access Fund, administered by the Universal Service and Access Agency of South Africa (Usaasa).

    Dysfunction has resulted in real harm to South Africa’s goal of connecting underserved communities

    But according to Internet Service Providers’ Association (Ispa) regulatory advisor Dominic Cull, the cash does not flow directly to the fund. It is collected by Icasa, transferred to national treasury and a only portion of it is allocated through the budget process – breaking the link between what licensees contribute and what is available for universal service projects.

    “That is something which needs to be looked at because it becomes more of a general tax and not a specific contribution for a specific purpose,” Cull said in an interview with TechCentral on Thursday.

    Usaasa has a long history:

    • It was originally founded as the Universal Service Agency under section 58 of the Telecommunications Act of 1996.
    • It was reconstituted in its current form under sections 80 to 91 of the Electronic Communications Act of 2005, which came into operation in July 2006.
    • It is mandated to promote universal service and access in underserviced areas, advise government and Icasa on access policy, and administer the Universal Service and Access Fund, into which licensees contribute to subsidise the roll-out of networks in underserved communities.

    According to the department of communications & digital technologies’ budget vote for the 2025/2026 financial year, Usaasa was allocated R268-million for its operations, while the Universal Service and Access Fund received R173-million “to advance digital inclusion initiatives in unconnected areas”.

    Cull said the structural issues have been compounded by performance failures at Usaasa, with core tasks such as the definitions of “universal service” and “needy persons” – which Usaasa is meant to develop in collaboration with the communications minister – still non-existent.

    “There has been dysfunction that has resulted in real harm to South Africa’s goal of connecting underserved communities,” he said.

    ‘Uneven delivery’

    Nomvuyiso Batyi, CEO of telecoms lobby group the Association of Comms & Technology (ACT), said the agency’s mandate under the Electronic Communications Act – to expand broadband access and support universal service objectives – remains compelling, but that delivery has been uneven and constrained by institutional uncertainty, capacity limits and ongoing restructuring.

    Audit outcomes have improved from a “disclaimer” to “qualified” and, more recently, an unqualified opinion, but Batyi cautioned that this reflects strengthening governance compliance rather than sustained, large-scale developmental impact.

    Read: Warning that South Africa’s digital competitiveness is in retreat

    Operationally, Usaasa is delivering – through targeted broadband roll-out, public Wi-Fi deployments and digital skills programmes – but the scale and pace remain modest relative to South Africa’s connectivity gaps, she said.

    Dominic Cull
    Dominic Cull

    Batyi drew an unfavourable comparison with established international universal service and broadband delivery frameworks, including the US Federal Communications Commission’s Universal Service Fund and the UK’s Building Digital UK programme.

    South Africa’s current model, she said, reflects weaker institutional continuity, fragmented execution and limited alignment between funding, outputs and measurable outcomes. Reporting tends to focus on activities and processes rather than on tangible developmental outcomes such as actual usage, service reliability, affordability and the sustainability of deployed infrastructure.

    The department of communications has acknowledged the underperformance and intends to incorporate Usaasa under a new Digital Development Challenge Fund (DDCF), with a bill expected to be tabled for public comment later this year, according to Cull.

    What is needed is substantial reform of the institutional and legal framework around universal access

    A new broadband connectivity report released by the Development Bank of Southern Africa last month noted that more than 98% of South Africans have access to 4G coverage, but actual usage lags significantly. Cull said this suggests a rethink of how Usaasa funds are allocated, with a device and data subsidy for indigent South Africans among the options under consideration.

    What is needed, he said, is substantial reform of the institutional and legal framework around universal service and access – including updated definitions, proper coverage mapping by Icasa and use of the powers already conferred by the Electronic Communications Act to build a workable framework.

    ‘Evolving’

    Usaasa communications specialist Keitumetse Maloka said the agency is “evolving its approach” based on a “reform-orientated” strategy, with the missing definitions Cull referred to among the key deliverables in Usaasa’s performance plan for the 2027 financial year. As an implementing agency, Usaasa does not pronounce on policy-level decisions such as the move to subsume it into the proposed DDCF, she said.

    Read: The staggering cost of connecting every South African household

    “However, the agency stands ready to support the policymaking process through evidence-based recommendations, should it be called upon to do so. Such changes would necessarily require amendments to the governing legislation,” said Maloka.  – (c) 2026 NewsCentral Media

    Get breaking news from TechCentral on WhatsApp. Sign up here.

    Follow TechCentral on Google News Add TechCentral as your preferred source on Google


    ACT Dominic Cull Ispa Keitumetse Maloka Nomvuyiso Batyi Usaasa
    WhatsApp YouTube
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleWits project pits African creators against AI music’s blind spots
    Next Article DStv drops premium paywall on Fifa World Cup in Canal+-era shift

    Related Posts

    Home affairs goes ghost-hunting on state payrolls - Leon Schreiber

    Home affairs goes ghost-hunting on state payrolls

    26 May 2026
    Rica blindspot exposed

    Rica blindspot exposed

    21 May 2026
    Reinvest spectrum cash in ICT sector, industry urges

    Reinvest spectrum cash in ICT sector, industry urges

    10 May 2026
    Company News
    Threat actors don't hack in anymore - they log in - Altron Digital Business Microsoft South Africa

    Threat actors don’t hack in anymore – they log in

    27 May 2026
    Africa's data centre industry to converge on Sandton this June

    Africa’s data centre industry to converge on Sandton this June

    27 May 2026
    Zoom Fibre launches Get Flex ISP

    Zoom Fibre launches Get Flex ISP

    26 May 2026
    Opinion
    Treasury's crypto crackdown is a betrayal of Mandela's promise - Duncan McLeod

    Treasury’s crypto crackdown is a betrayal of Mandela’s promise

    22 May 2026
    South Africa is sleepwalking into another AI policy failure - Celeste Labuschagne

    South Africa is sleepwalking into another AI policy failure

    20 May 2026
    AI won't fix your culture - it will expose it - Jackie Kennedy

    AI won’t fix your culture – it will expose it

    19 May 2026

    Subscribe to Updates

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

    Latest Posts
    Huge win for South Africa's Wi-Fi lobby in spectrum fight

    Mobile operators locked out as Icasa opens 900MHz of spectrum

    27 May 2026
    South Africa's right-to-repair vacuum

    South Africa’s right-to-repair vacuum

    27 May 2026
    Eskom breaks ground on R1.2-billion Lethabo solar plant

    Eskom breaks ground on R1.2-billion Lethabo solar plant

    27 May 2026
    4Sight earnings leap, led by back-office IT sales - Tertius Zitzke

    4Sight earnings leap, led by back-office IT sales

    27 May 2026
    © 2009 - 2026 NewsCentral Media
    • Cookie policy (ZA)
    • TechCentral – privacy and Popia

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

    Manage consent

    TechCentral uses cookies to enhance its offerings. Consenting to these technologies allows us to serve you better. Not consenting or withdrawing consent may adversely affect certain features and functions of the website.

    Functional Always active
    The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
    Preferences
    The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
    Statistics
    The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
    Marketing
    The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
    • Manage options
    • Manage services
    • Manage {vendor_count} vendors
    • Read more about these purposes
    View preferences
    • {title}
    • {title}
    • {title}