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

      Dis-Chem gets serious about e-commerce – again

      8 September 2026
      Shoprite's CTO is thinking of a future where new recruits arrive with their own AI agents - Chris Shortt

      Shoprite’s CTO is thinking of a future where new recruits arrive with their own AI agents

      8 September 2026
      Rubicon's EV charging network is profitable - and growing fast - Watts & Wheels

      Rubicon’s EV charging network is profitable – and growing fast

      8 September 2026
      Vodacom recruits former JSE chief as chair succession begins - Leila Fourie

      Vodacom recruits former JSE chief as chair succession begins

      8 September 2026
      The world map is messing with your head

      The world map is messing with your head

      8 September 2026
    • World
      'This is not circular': Jensen Huang defends $3.5-billion MediaTek deal

      ‘This is not circular’: Jensen Huang defends $3.5-billion MediaTek deal

      2 September 2026
      AI-generated music banned from Australian charts

      AI-generated music banned from Australian charts

      26 August 2026
      Traders brace for a R4.5-trillion swing in Nvidia's value

      Traders brace for a R4.5-trillion swing in Nvidia’s value

      25 August 2026
      Russia building its own Starlink - and faster than expected - Vadym Skibitskyi

      Russia building its own Starlink – and faster than expected

      11 August 2026
      Meta AI will now tell parents if their teen is in crisis

      Meta AI will now tell parents if their teen is in crisis

      17 July 2026
    • In-depth
      Google DeepMind CEO Demis Hassabis. Image: John Sears

      The plan to stop AI from breaking the world

      16 July 2026
      The internet has a Strait of Hormuz problem

      The internet has a Strait of Hormuz problem

      15 July 2026
      AI boom sparks rally, frenzy and fear

      AI boom sparks rally, frenzy and fear

      11 June 2026
      Every plug-in hybrid on sale in South Africa, ranked by price - Lamborghini Temerario

      Every plug-in hybrid on sale in South Africa, ranked by price

      7 June 2026
      What Wi-Fi 8 will mean for wireless networks

      What Wi-Fi 8 will mean for wireless networks

      1 June 2026
    • TCS
      Winstone Jordaan on building a national EV charging network

      Winstone Jordaan on building a national EV charging network

      2 September 2026
      Watts & Wheels S1E8: 'Tesla lands in Africa, just not here'

      Watts & Wheels S1E8: ‘Tesla lands in Africa, just not here’

      24 August 2026
      TCS | Herotel CEO Van Zyl Botha on beating Starlink to South Africa

      TCS | Herotel CEO Van Zyl Botha on beating Starlink to South Africa

      14 August 2026
      Meet the CIO | Discovery's Derek Wilcocks on AI, guardrails and growth

      Meet the CIO | Derek Wilcocks on how AI personalised Vitality

      13 August 2026
      TCS | Money just became native to the internet - Steven Boykey Sidley

      TCS | Money just became native to the internet – Steven Boykey Sidley

      12 August 2026
    • Opinion
      The fragile joint in the Capitec machine - Pambos Soteriades

      The R197-billion market the banks can’t reach

      25 August 2026
      South African tech's compounding debt problem - Jannie van Zyl

      Management consulting as we know it is over

      21 August 2026
      South African tech's compounding debt problem - Jannie van Zyl

      The most dangerous customer is the quiet one

      10 August 2026
      South African tech's compounding debt problem - Jannie van Zyl

      South African tech’s compounding debt problem

      29 July 2026
      The fragile joint in the Capitec machine - Pambos Soteriades

      Best network, worst vibes: the puzzle of SA telecoms

      20 July 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.com
      • 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
      • Vox
      • 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
      • Policy and regulation
      • Public sector
      • Retail and e-commerce
      • Satellite communications
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
      • Watts & Wheels
    • 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
    Get breaking news on 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.

    Add TechCentral as a preferred source on GoogleFollow TechCentral on Google NewsGet breaking news on WhatsApp


    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

    Rural South Africa does not need six towers to have a choice - Nomvuyiso Batyi, CEO of the Association of Comms & Technology

    Rural South Africa does not need six towers to have a choice

    4 September 2026
    Rural South Africans should not have to trade competition for coverage - Paul Colmer

    Rural South Africans should not have to trade competition for coverage

    3 September 2026
    300 million Sims a year for 60 million South Africans - Ferdi Moolman

    300 million Sims a year for 65 million South Africans

    25 August 2026
    Company News
    How dual-source technology is changing laser engraving

    How dual-source technology is changing laser engraving

    8 September 2026
    Why SA homes need better Wi-Fi, not faster internet - Vox Telecom

    Why SA homes need better Wi-Fi, not faster internet

    8 September 2026
    Most enterprises don't have an identity strategy - they have a patchwork - Contactable

    Most enterprises don’t have an identity strategy – they have a patchwork

    7 September 2026
    Opinion
    The fragile joint in the Capitec machine - Pambos Soteriades

    The R197-billion market the banks can’t reach

    25 August 2026
    South African tech's compounding debt problem - Jannie van Zyl

    Management consulting as we know it is over

    21 August 2026
    South African tech's compounding debt problem - Jannie van Zyl

    The most dangerous customer is the quiet one

    10 August 2026

    Subscribe to Updates

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

    Latest Posts

    Dis-Chem gets serious about e-commerce – again

    8 September 2026
    Shoprite's CTO is thinking of a future where new recruits arrive with their own AI agents - Chris Shortt

    Shoprite’s CTO is thinking of a future where new recruits arrive with their own AI agents

    8 September 2026
    Rubicon's EV charging network is profitable - and growing fast - Watts & Wheels

    Rubicon’s EV charging network is profitable – and growing fast

    8 September 2026
    Vodacom recruits former JSE chief as chair succession begins - Leila Fourie

    Vodacom recruits former JSE chief as chair succession begins

    8 September 2026
    © 2009 - 2026 NewsCentral Media
    Built and maintained by Chronon
    • 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}