South Africa’s troubled Universal Service & Access Agency of South Africa (Usaasa) is heading towards the end of the line after nearly 30 years of operation, with government now formally confirming the state entity will be disestablished as part of sweeping telecommunications reform. The decision marks a significant shift in how the country will approach digital connectivity in underserved rural and township areas, moving away from an independent agency model towards direct government oversight through what officials are calling the Digital Development Challenge Fund.
Communications Minister Solly Malatsi and his department have spelled out the timeline in the annual performance plan tabled at the end of March, with the crucial Electronic Communications Amendment Bill due for parliamentary submission in 2027/2028. The move comes after years of mounting pressure on Usaasa over governance failures, missed project deadlines, and what sector experts describe as systemic dysfunction that has actively hindered South Africa’s digital divide efforts.
“There has been dysfunction that has resulted in real harm to South Africa’s goal of connecting underserved communities,” says Dominic Cull, regulatory advisor at the Internet Service Providers’ Association, speaking to the frustrations that have built up around the agency’s performance. The confirmation of Usaasa’s disestablishment follows a period of intensive restructuring overseen by Malatsi, who in his first months in the role fired two board members — Daphne Kula-Rantho and Boitumelo Mabusela — and later appointed four new interim directors in October 2025 to restore what he described as basic governance standards.
The end of Usaasa reflects years of struggle in South Africa’s digital access strategy
Established back in 1996 with a mandate to bridge the digital divide, Usaasa has been responsible for administering the Universal Service and Access Fund (Usaf), to which licensed telecommunications operators contribute 0.2% of their licensed revenue. The agency currently receives an annual allocation of R88.8-million, with a further R57.2-million flowing into the fund itself — resources that should have transformed connectivity across the country but largely failed to deliver meaningful impact on the ground.
The journey towards disestablishment isn’t entirely new thinking within government circles. Former Communications Minister Stella Ndabeni-Abrahams had already signalled similar intentions back in December 2019 when she dissolved Usaasa’s board and appointed administrators, framing the move as part of a broader restructuring aimed at stripping the agency of operational responsibilities and narrowing its focus to fund collection and disbursement. That intervention, however, never crystallised into formal disestablishment — until now.
What’s fundamentally different about the current approach is the proposed architecture for replacing Usaasa. Rather than simply winding down the agency and redistributing its functions, the department is moving to convert Usaf into the Digital Development Challenge Fund, which will be housed directly within the department’s administrative structures. This effectively transforms what was once a telecommunications levy — paid by operators into a ring-fenced fund — into a ministerial programme managed by the director-general and overseen by Malatsi himself.
This structural reconfiguration opens the door to what government describes as more modern and flexible digital inclusion approaches, including potential device subsidies and data packages for economically disadvantaged households. The proposed amendment bill is designed to align South Africa’s universal service framework with contemporary policy thinking around digital equity, moving beyond the traditional infrastructure-focused model that Usaasa was originally designed to support.
Industry observers are watching the legislative process carefully, particularly given the bill’s broader implications for how government channels resources into connectivity projects. The Internet Service Providers’ Association and other stakeholders have voiced concerns about continuity and effectiveness, but the broad direction appears to have sector acceptance — particularly among those who’ve grown frustrated with Usaasa’s inability to deliver results at scale.
Until parliament passes the amendment bill — a process likely to extend into 2027 or beyond — Usaasa will continue operating under heightened departmental scrutiny. Malatsi’s performance plan explicitly requires that all of the agency’s quarterly reports be formally analysed and assessed, ensuring there’s no drift in governance standards whilst the legislative machinery works through the detail of formal disestablishment. The department has positioned this interim period as a transition phase, with oversight mechanisms designed to prevent further erosion of public confidence or project delays.
The end of Usaasa, when it finally comes, will represent an acknowledgement that the independent agency model — at least as it was implemented in this case — couldn’t deliver the connectivity outcomes South Africa desperately needs in its most marginalised communities.