Icasa lets army run up a bill of R189m

Regulator under whip for not collecting from companies

BUMBLING telecoms regulator the Independent Communications Authority of SA (Icasa) has allowed the SA National Defence Force (SANDF) to rack up a mammoth R189-million bill for spectrum the army uses to communicate.

This is further evidence of Icasa’s apparent inability to collect the money it is owed from customers that use spectrum after it emerged in recent months that the regulator is already locked in heated disputes with Vodacom and Wireless Business Solutions, which owns iBurst.

Icasa, owed more than R60-million by WBS, was split on how to deal with the matter. Some insiders are pushing for settlement while others want more cash. The regulator has also been trying to settle with Vodacom.

Now it appears that Icasa is also looking to reach a “settlement” with the SANDF over the R189-million it is owed. This will infuriate companies that pay the full amounts they owe.

The alarming sum owed by the army emerged from Icasa’s financial turnaround plan. It is not clear why the regulator allowed the bill to balloon to this extent.

Last month, parliament’s standing committee on public accounts (Scopa) rebuked Icasa, telling the regulator to “firm up and take charge in enforcing compliance from licensees”.

Scopa chairman Themba Godi said that Icasa had “shown strange governance arrangements and has been weak in capacity building and regulating general licence fees”. This wasn’t its only problem. Icasa’s annual report for 2011/12 revealed that the auditor-general had given it a qualified audit opinion for the third year running, citing a lack of controls over the invoicing and collection of licence fee revenue.

Last month, Business Times reported Vodacom had taken Icasa to court after the regulator tried to change its mind over the licensing fees for the 2012 financial year.

In August 2010, Icasa revised its licence fees to level the playing field between state-owned and private companies. It said the new fees would kick in from April 2011. Vodacom paid its fees according to the new rule.

Then Icasa changed its mind, delaying the new fees by a year because it supposedly didn’t have the equipment to calculate the new fees. Under the new fees, Vodacom would have saved R77.8-million (the cellular company puts it at R66.8-million) — money it now refuses to pay to Icasa.

But other operators are watching this case closely. Should Icasa lose, it could open the way for them to claim back the extra fees they paid.

Icasa spokesman Paseka Maleka was tight-lipped about the growing number of disputes the regulator has now found itself mired in.

“It is only when these discussions have been finalised that [Icasa] will be in a position to comment further on how the Vodacom and SANDF matters will be addressed,” he said.

Icasa’s battle with WBS, which provides internet connectivity to more than 100 000 companies, is equally hotly contested.

The outcome of that dispute is expected to set a precedent on how heavyhanded Icasa can afford to be in future with operators that owe licence fees.

Thami Mtshali, CEO of WBS, said that it was keen to settle the matter to avoid a lengthy court case.

The legal dispute began when Icasa seized WBS’s radio communication equipment at six of its sites in Gauteng two months ago, accusing the company of operating illegally on six of its 11 licences.

WBS hit back with a court interdict that forced Icasa to return the equipment.

Spectrum licences are valid for only one year, and must be renewed yearly. But WBS did not renew, so it is being accused of operating illegally on certain spectrum bands. These are understood to be the 15GHz, 5.9GHz, 10.5GHz, 26GHz, 2.6GHz and 1800MHz bands.

While Icasa has said it would be open to a settlement, the regulator made it clear it wouldn’t settle for anything less than R60-million.

Maleka said there hadn’t been a

The auditorgeneral had given Icasa a qualified audit for the third year running

settlement yet because “we are in dispute with how much they want to settle”.

“We’ve never said we don’t want to settle, and we have tried settling with WBS. But the problem was that there was a dispute about the amount: they said they owed R8-million, whilst we say they owe more than R60-million.

“So they wanted to settle an amount they believed they owed, and that’s why nothing happened. But we have always been open to any settlement as long as they pay what they say we owe,” said Maleka.

WBS boss Mtshali responded that any settlement would include negotiating the amount owed because “we are in business to make money”.

Mtshali previously told Business Times that his company suffered severe damage because of Icasa.

“The damages are huge because we’re losing clients.”

But some sources close to Icasa said that it would be wrong to settle for anything less than what was owed, as it would send a message that the regulator negotiated with illegal operators.

The parties went to court on June 10 and are “currently awaiting the court order/judgment, which we expect should be out by the end of this month [July] or early next month”, said Maleka.