FORM OF APPLICATION




FORM OF APPLICATION AND MANNER IN WHICH IT IS CONTEMPLATED THAT THE SERVICE WILL BE PROVIDED FOR ONE MOBILE CELLULAR TELECOMMUNICATION SERVICE LICENCE IN TERMS OF SECTION 34(2)(b)(ii) OF THE TELECOMMUNICATIONS ACT, 1996 (ACT NO. 103 of 1996)

1. INTRODUCTION

1.1. This document is provided in terms of section 34(2)(b)(ii) of the Telecommunications Act, 1996 (Act No. 103 of 1996) ("the Act") and clause 3 of the "Invitation to Apply for One Mobile Cellular Telecommunication Service Licence in terms of section 34(2)(a)(ii) of the Telecommunications Act, 1996" ("Invitation to Apply") published under Notice 314 of 1999 in Government Gazette 19806 dated 26 February 1999.

1.2. This document includes the following information:

1.2.1. the manner in which it is contemplated that the mobile cellular telecommunication service will be provided;

1.2.2. notice of evaluation criteria required by the Act;

1.2.3. notice of the licence conditions currently envisaged by the Minister for Posts, Telecommunications and Broadcasting ("Minister");

1.2.4. the form in which applications must be submitted; and

1.2.5. notice of certain process information.

2. THE SERVICE

The following information is provided, as required by section 34(2)(b)(ii) of the Act, regarding the manner in which it is contemplated that the mobile cellular telecommunication service will be provided.

2.1. Technology

While certain technologies are to be preferred, a particular mobile cellular telecommunication service technology is not mandated. Preferred technologies are those which allow a wide choice of customer equipment, are widely accepted in other national markets, are electro-magnetically compatible with existing frequency spectrum users and are capable of transition to the provision of third generation services.

2.2. Frequency Assignment

While there is no specific limitation on the frequencies to be assigned, it is unlikely that more than 2 x 10 MHZ of frequency spectrum will be assigned to the successful applicant.

2.3. Coverage

It is expected that service coverage must provide for a significant proportion of South Africans, including those in currently under-serviced areas, particularly areas in which previously disadvantaged communities and rural communities are located.

2.4. Services

It is expected that the mobile cellular telecommunication service to be offered must be comprehensive and will include at a minimum, mobile voice telephone services, data services, emergency services, directory services and operator-assisted services, on a non-discriminatory basis.

1. EVALUATION CRITERIA

The evaluation criteria to be applied by the South African Telecommunications Regulatory Authority ("the Authority") when considering applications will flow from the provisions of the Act. In general, the objects of the Act set out in section 2 thereof will be important. Specifically, section 35(3) of the Act provides that in the consideration of applications to provide a telecommunication service referred to in section 34(2) of the Act, which includes mobile cellular telecommunication service, due regard shall be given to applications by persons from historically disadvantaged groups.

1. LICENCE CONDITIONS CURRENTLY ENVISAGED BY THE MINISTER

1.1. The following licence conditions are those currently envisaged by the Minister. The Minister, however, will consider any conditions suggested by the Authority if and when the Authority makes a recommendation to the Minister to grant an application in terms of section 35(2)(b)(i) read with section 35(4) of the Act.

1.1.1. A licence period of validity of 15 years.

1.1.2. Telecommunication service licence fees (not including frequency licence fees), being:

1.1.2.1. a once-off fixed telecommunication service licence fee of R100 000 000,00 (one hundred million rand), payable over the period of the licence with interest; and

1.1.2.2. an annual variable telecommunication service licence fee of one percent of net operating income, reviewable by the Authority.

1.1.3. A limitation on the transfer of the licence and on changes of ownership or control of more than ten percent of the telecommunication service licensee during the period in which the once-off fixed telecommunication service licence fee has not been paid in full (including any interest thereon).

1.1.4. A limitation on the transfer of the licence and on changes of ownership or control which result in a change of the ownership or control of the telecommunication service licensee held by persons from historically disadvantaged groups.

1.1.5. A performance guarantee in the amount of amount of R50 000 000,00 (fifty million rand) in respect of certain commitments, namely:

1.1.5.1. commitments related to geographic and population coverage;

1.1.5.2. commitments related to universal access and universal service obligations;

1.1.5.3. commitments related to empowerment; and

1.1.5.4. commitments related to economic development.

1.2. In terms of section 37(2)(d) of the Act, the licence shall contain a condition prohibiting the mobile cellular telecommunication service, until a date to be fixed by the Minister by notice in the Government Gazette, from utilising any fixed lines which may be required for the provision of the service, other than fixed lines made available by Telkom or any other person providing a public switched telecommunication service, subject to the Act, in particular section 44 of the Act.

2. THE APPLICATION

2.1. The structure of the application submitted to the Authority in terms of the Invitation to Apply shall be as follows:

2.1.1. The information required by clause 4.1.5 of the Invitation to Apply;

2.1.2. The Application Form and Annexures thereto; and

2.1.3. An affidavit stating that the application is the true and complete application of the applicant, signed by at least the same two persons who sign the covering letter in terms of clause 4.1.5 of the Invitation to Apply.

2.2. The Application Form to be followed is published herewith.

2.3. Applicants are encouraged to be brief in submitting relevant information unless otherwise requested and applicants are discouraged from submitting superfluous information.

2.4. In preparing applications, regard should be had to, among other matters, the enquiry initiated by the Authority with regard to the economic feasibility of the provision of more than two mobile cellular telecommunication service licenses in Notice 563 of 1998 in Government Gazette 18799 dated 30 March 1998 and notice of findings in Notice 1526 of 1998 in Government Gazette 19115 dated 31 July 1998.

2.5. In submitting information regarding ownership and control, regard should be had to, among other matters,

2.5.1. the Act, in particular sections 35(2) and 35(3) thereof;

2.5.2. the enquiry initiated by the Authority with regard to ownership and control of telecommunication service licences in Notice 1322 of 1998 in Government Gazette 18927 dated 10 July 1998 and notice of findings in Notice 313 of 1999 in Government Gazette 19805 dated 26 February 1999; and

2.5.3. any regulations or draft regulations published by the Authority before the deadline for submission of applications.

2.6. In submitting information regarding charges for services, regard should be had to, among other matters,

2.6.1. the Act, in particular section 45 thereof; and

2.6.2. any regulations or draft regulations published by the Authority before the deadline for submission of applications.

2.7. In submitting information regarding financial projections, regard should be had to, among other matters,

2.7.1. the documents referred to in 6 above;

2.7.2. the enquiry initiated by the Authority with regard to application fees and licence fees in Notice 2691 of 1998 in Government Gazette 19436 dated 30 October 1998;

2.7.3. the Ministerial Policy Direction on Contributions to the Universal Service Fund published in Notice 775 of 1997 in Government Gazette 17984 dated 7 May 1997;

2.7.4. the draft regulations published with regard to contributions to the Universal Service Fund in Notice 2003 of 1997 in Government Gazette 18579 dated 19 December 1997;

2.7.5. the Ministerial Policy Direction on Contributions to the Human Resources Fund published in Notice 774 of 1997 in Government Gazette 17984 dated 7 May 1997; and

2.7.6. the enquiry initiated by the Authority with regard to establishment of the Human Resources Fund in Notice 1927 of 1998 in Government Gazette 19217 dated 3 September 1998.

2.8. In submitting information regarding frequency requirements, regard should be had to, among other matters,

2.8.1. the Act, in particular Chapter IV thereof;

2.8.2. the following documents published in the Government Gazette regarding the frequency band plan -

2.8.2.1. Notice 18 of 1996 in Government Gazette 17701 dated 27 December 1996 regarding Project SABRE, version 1.61;

2.8.2.2. Notice 759 of 1997 in Government Gazette 17983 dated 6 May 1997 regarding Project SABRE, version 2;

2.8.2.3. Notice 740 of 1998 in Government Gazette 18883 dated 30 April 1998 regarding Project SABRE - 2, Notice of Intention to Develop a New Band Plan (3 GHz to 70 GHz);

2.8.2.4. Notice 1334 of 1998 in Government Gazette 19062 dated 10 July 1998, an erratum of Notice 759 of 1997;

2.8.2.5. Notice 1535 of 1998 in Government Gazette 19120 dated 31 July 1998, concerning SABRE - 2, Notice In Respect of Future Spectrum Developments - Project SABRE - 2;

2.8.2.6. Notice 2358 of 1998 in Government Gazette 19343 dated 9 October 1998, Notice of Intention to Revise the Band Plan for 10.7 GHz to 11.7 GHz; and

2.8.2.7. Notice 157 of 1999 in Government Gazette 19750 dated 9 February 1999, Addendum Draft Broadcasting Frequency Plan, by the Independent Broadcasting Authority.

2.9. In submitting information regarding interconnection and facilities leasing, regard should be had to, among other matters,

2.9.1. the Act, in particular section 43 thereof;

2.9.2. the Ministerial Determination on Interconnection Guidelines published in Notice 771 of 1997 in Government Gazette 17984 dated 7 May 1997;

2.9.3. the enquiry initiated by the Authority with regard to interconnection and facilities leasing guidelines on the form and content of interconnection and facilities leasing agreements in Notice 1683 of 1998 in Government Gazette 19159 dated 19 August 1998; and

2.9.4. the draft regulations published with regard to interconnection and facilities leasing guidelines on the form and content of interconnection and facilities leasing agreements in Notice 168 of 1999 in Government Gazette 19764 dated 12 February 1999.

2.10. In submitting information regarding number portability, regard shall be had to, among other matters, a request for comment by the Authority on a draft discussion paper on the future of telecommunications numbering in South Africa in Notice 198 of 1999 in Government Gazette 19786 dated 20 February 1999.

2.11. In submitting information regarding universal access and universal service obligations, regard should be had to, among other matters,

2.11.1. the Act, in particular Chapters VII and VIII and section 2 thereof;

2.11.2. a request for comment by the Authority on a draft report of a study to determine the categories of needy people to benefit from the Universal Service Fund in Notice 1941 of 1997 in Government Gazette 18527 dated 5 December 1997;

2.11.3. a request for comment by the Universal Service Agency on a discussion document concerning the definition of universal service and universal access in Notice 2601 of 1998 in Government Gazette 19397 dated 22 October 1998;

2.11.4. the licence of Telkom SA Limited to provide telecommunication services in terms of section 36 of the Act published in Notice 768 of 1997 in Government Gazette 17984 dated 7 May 1997; and

2.11.5. the licence of Vodacom Group (Proprietary) Limited and Mobile Telephone Networks (Proprietary) Limited to provide cellular telecommunication services published in Notice 1078 of 1993 in Government Gazette 15232 dated 29 October 1993.

3. PROCESS INFORMATION

3.1. Interested persons may submit questions of clarification concerning this document, the Application Form and the Invitation to Apply to the Minister which shall be hand delivered to the Minister by no later than three weeks from the release of this document, care of The Project Manager, Invitation to Apply for One Mobile Cellular Telecommunication Service Licence, Ministry for Posts, Telecommunications and Broadcasting, Room 212, Nkululeko House, iParioli Office Park, 399 Duncan Street, Hatfield, Pretoria. Persons are encouraged to submit questions of clarification as soon as possible. Questions of clarification about this document, the Application Form or the Invitation to Apply may not be directed to the Authority.

3.2. At any time before two weeks after the deadline mentioned in 6.1 above, the Minister will make available documents setting out questions which the Minister considers necessary to answer in order to ensure the fairness of the process, together with the answers to such questions. Notice of such documents will be published in the Government Gazette.

3.3. Neither the Minister, the Department of Communications nor the Authority will entertain ex parte contacts with regard to this document, the Application Form, the Invitation to Apply or any other matter related to the proceedings for applications for one mobile cellular telecommunication service licence initiated by the Invitation to Apply. Questions about any other matter related to the proceedings for applications for one mobile cellular telecommunication service licence initiated by the Invitation to Apply should not be directed to the Minister, but to the Authority in accordance with regulations prescribed by the Authority.

3.4. After the submission of applications in terms of the Invitation to Apply, the Authority will consider all applications in terms of the Act and regulations, in particular in terms of section 34 and section 35 of the Act. Thereafter, in terms of section 35(2)(b)(i), the Authority may either refuse an application or make a recommendation to the Minister that the Minister grant the application conditionally and suggest conditions for the Minister to impose.

3.5. Thereafter, in terms of section 35(2)(b)(i) read with section 35(4) of the Act, the Minister may either refuse the application recommended by the Authority to be granted, grant the application and impose the conditions suggested by the Authority, grant the application and impose other conditions or grant the application unconditionally.

3.6. If the Minister grants the application, the Authority must issue a licence in terms of section 35(5) of the Act. In such event, the licensee will then be required to apply to the Authority in terms of section 30(3)(b) of the Act for a frequency licence.

J Naidoo
Minister for Posts, Telecommunications and Broadcasting
5 March 1999


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