The change affects service providers like Megafone, which piggybacks on the MiPhone network, under a commercial deal between the two companies.

Operating illegally

The OUR has offered 12 licences for sale to companies who are currently without a telecommunications licence. Companies have until November 7 to apply for the licence, or otherwise pay a fine of $3 million if found to be in breach of the regulatory requirement.

Although the licences are a recent move by the OUR to plug a regulatory loophole, Director of Consumer and Public Affairs at the OUR, David Geddes, said the companies providing telephone services without a licence, are operating illegally.

Companies that trade in minutes, or phone credit, are offering what the regulator describes as a prescribed service. And all prescribed services, according to Geddes, require licensing.

Increase accountability

He said the new offering was a regulatory decision to increase the level of accountability among the players in the telecommunications sector with regard to the level and quality of service provided.

"For every telecommunications service that you provide, you have to apply for a licence," Geddes told Wednesday Business.

"This is a new category of licence; we've not had this licence before. This licence is for persons who act as providers to rent minutes and sell back calls," he said.

Up to press time, Wednesday Business was unable to contact Cash Plus Telecom Limited, Megafone Limited and Freepaid Limited to confirm whether they intended to make use of the offering.

Megafone, which is fast becoming another major player in the industry, uses MiPhone's CDMA network to offer local and international landline and mobile services to its clients.

Cash Plus Telecom Limited was not detected among the entities with a telecommunications licence in the list on the OUR website.

People's Telecom Limited and its the relatively new subsidiary Freedom Wireless, which also use the MiPhone network to offer telecommunications services, was on the list of entities already issued with telecoms licences.

As for Flow Communications, which offers telephone service as part of its triple play package, the company said it too was covered.

"We were issued a licence for local and international voice and one for local and international data carriage by the OUR," said Marketing Manager Jean McPherson.

Geddes said there was not cost for the licence, but applicants were required to pay a processing fee of $70,000.

If all 12 licences are sold, it would mean revenues of just under $1 million for the regulator.

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