NAB comments on proposed contributions to the Universal Service Fund

18 April 2002
In its submission, the NAB has asked ICASA for clarity on exactly how the contributions will be calculated. The NAB stated that “determining the contribution by imposing a percentage of total turnover without providing indications as to how to calculate this, is untenable”. The NAB pointed out that many licensees’ turnover is not solely dependent on the telecommunication services that they provide. For some licensees satellite contribution and distribution and multimedia services make up only a small proportion of their total turnover.

Further, NAB members involved in satellite contribution and distribution advise that a vast proportion of their costs are space segment charges levied by PanAmSat, Intelsat or other satellite service providers. In general, these costs often form 80 or 90% of the cost of the telecommunications service being provided and in the case of mobile satellite contribution services, a further portion of the cost associated for these services are created by travelling, hotel accommodation, cross border expenses, duties and levies, all of which are included in the calculation of turnover. The profit margins made by these operators are therefore small.
The NAB has recommended that when deciding on a percentage for a turnover based contribution, ICASA will have to take this into account, as it will dramatically affect the profitability of the operators.

The date for oral hearings on the draft regulations is still to be announced by ICASA.



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