THE REGULATION OF INDEPENDENT TOWER COMPANIES YET TO BE ADDRESSED

The independent tower company business model has developed alongside the extensive growth of mobile and wireless communications across the world.
Independent tower companies own and operate the passive infrastructure that forms part of mobile and wireless telecommunications networks.
Passive infrastructure in a telecommunications network includes electrical or fibre optic cables, masts, pylons, poles and ducts, physical co-location space on the ground, towers, roof tops and other premises, monitoring equipment, electrical power supply, air conditioning equipment, alarm systems, manholes and conduits. In short, passive network infrastructure is all the infrastructure and network equipment which is not used for the actual transmission and reception of radio signals.
The services offered by independent tower companies include the building and provision of access to passive network infrastructure, the leasing of appropriate land and properties for sites and related services such as management, monitoring, security services and the provision of electricity.
The ability to access such services means that mobile and wireless telecommunications operators can either outsource the management of their existing portfolios of towers or can simply buy space on the towers and masts operated and managed by independent tower companies. This can reduce the operators' capital outlay and operation costs.
An ancillary benefit of the independent tower company model is that, because mobile and other wireless operators are able to buy co-location space on towers and masts owned and managed by such companies and because the business model is premised on selling as much co-location space as possible, there is increased scope for the sharing of passive infrastructure by operators.
This can have benefits for the environment and may, in turn, reduce the need to put up controversial cellular towers.
Various independent tower companies are presently operating in South Africa, among them American Tower Corporation, which acquired Cell C's existing towers and towers-under construction in 2010.
Unlike countries such as India, Pakistan and Nigeria, the South African telecommunications regulatory framework does not require a specific licence for the establishment and operation of telecommunications towers. In other words, there is no separate licensing category for the types of tower services that an independent tower company provides.
Instead, the South African communications regulatory framework established by the Electronic Communications Act, 2005 (ECA) provides for three primary licensing categories:

electronic communications network services (ECNS);

electronic communications services (ECS); and

broadcasting services.

An ECNS licence is required by any person who, or business which, "makes available" an electronic communications network for the provision of ECS or broadcasting services. An ECS licence is required to provide services such as voice and data services provided over electronic communications networks to end-users.
The question arising in the context of the independent tower company business model is whether the activities conducted by such companies' conduct are licensable activities for the purposes of the ECA.
Clearly, an independent tower company does not provide any ECS or broadcasting services directly to end-users. Indeed, the only activity in which a tower company is engaged is operating and managing the passive infrastructure components of the telecommunications network over which such ECS or broadcasting services are provided.

The issue is whether this activity in itself amounts to the "mak[ing] available" of an electronic communications network. If it does, a tower company would require an ECNS licence to provide its services in South Africa; if it does not, a tower company would not require any licence to operate.
For the purposes of the ECA, the definition of "electronic communications network" makes it clear that an electronic communications network includes elements of passive infrastructure but does not make it clear whether such passive infrastructure on its own amounts to an electronic communications network.
The regulatory framework appears to be based on the traditional model whereby a network operator such as MTN, Vodacom or Cell C owned and operated its own passive infrastructure together with the active infrastructure elements and does not take account of newer models of doing business such as the independent operation and management of telecommunications infrastructure.
It is certainly arguable that the operation of passive electronic communications infrastructure such as towers and masts is not, in itself, the operation of an electronic communications network and that a person should only be regarded as operating an an electronic communications network when they operate infrastructure that is capable of transmitting electronic communication signals.
There is some sense in keeping independent tower companies outside the regulatory framework. Where an entity is regulated and required to be licensed under the ECA, it first needs to obtain a licence and is then subject to all the regulatory obligations applicable to licensees. The operation of a national or provincial electronic communications network requires an individual ECNS licence, which can only be acquired if the regulator, the Independent Communications Authority of South Africa (ICASA), issues an invitation to apply or if it is purchased from an existing licensee.
Accordingly, where an ECNS licence is required, there is a clear barrier to entry.
Amongst their many regulatory obligations, ECNS licensees are required to give access to their electronic communications facilities to other operators. The imposition of such obligations on a tower company is not, however, necessary in the same way that it may be necessary to mandate that telecommunications operators give access to their competitors.
This is simply because the tower companies' business model is premised on giving access to as many operators as possible: tower companies are incentivised to give access because giving access is their source of revenue.
The issue as to whether or not tower companies are regulated in terms of the ECA and require ECNS licences has not, as yet, been addressed directly by ICASA but is likely to arise for consideration by the regulator at some stage.