Communications Minister Solly Malatsi (Instagram)
Communications and Digital Technologies Minister Solly Malatsi on Tuesday defended his recently gazetted proposed ICT policy adjustments as intended to broadly attract investment into the sector, rather than to simply pave the way for Elon Musk’s Starlink to operate in South Africa, as critics have suggested.
“We are not attempting to open a new dispensation for Starlink or any other company or individual,” Malatsi told parliament’s portfolio committee on communication.
“We are saying that the regulations in our sector must consistently make provisions for the two choices that exist in any other sector.”
Malatsi was speaking after his department on Friday gazetted a proposed policy direction to the Independent Communications Authority of South Africa (Icasa), which it said was intended to clarify the department’s position on broad-based black economic empowerment (broad-based BEE) including the recognition of equity equivalent investment programmes.
“This is part of an initiative to significantly expand access to broadband connectivity to poor South Africans and people living in remote parts of the country,” it said.
“The focus of this policy direction is on lowering regulatory hurdles to investment in reliable broadband and ensuring access to the internet. This is in line with the broad-based black economic empowerment codes of good practice which recognise that the global nature of multinational corporations’ operations may constrain their ability to comply with equity ownership requirements.”
Starlink has failed to get an operating licence because South African-born Musk refused to meet broad-based BEE ownership requirements.
Currently, telecommunications companies must have at least 30% equity owned by historically disadvantaged people to obtain individual network and broadcasting service licences.
The directive from Malatsi, a member of the Democratic Alliance (DA) in the national coalition government, now opens the door for equity equivalent investment programmes (EEIPs), allowing multinationals to contribute through infrastructure development, supplier and enterprise development, digitisation and skills training, rather than ceding direct ownership.
The department says high data costs and limited infrastructure have made a review necessary. Icasa will now conduct a six-month market study to assess competition and explore measures to lower network charges.
The timing of the directive has raised eyebrows, coming soon after businessman Johann Rupert, part of a South African delegation to Washington led by Ramaphosa last week to try to mend ties with United States President Donald Trump, said the country needed Starlink to help fight rampant crime.
But at the sidelines of a conference on Tuesday, Ramaphosa denied that the delegation had discussed Starlink withTrump.
Members of the portfolio committee on communication said Malatsi’s DA had seized on Ramaphosa’s visit to attack BEE laws, framed as a regulatory alignment.
“We have had other telecommunications companies settle in South Africa without the need to change BEE regulations,” said portfolio committee chairperson Kusela Diko, an ANC member.
But Malatsi denied the directive was tailored to favour Musk or any individual, saying the process had begun in September last year and was scheduled to be completed by mid-2025, which coincided with the unexpected White House visit.
“This mechanism around equity equivalent programmes and how they can be utilised is not a new invention by me. It is an attempt to say if any formulation of sector regulations has to be consistent with the ICT sector codes which emerge from broad based economic empowerment,” said Malatsi.
He highlighted an exploratory memorandum from Icasa which stated that legislation had moved from empowering historically disadvantaged groups to more broad-based economic empowerment which were envisaged to replace equity ownership requirements
“In the end Icasa regulations may continue, if the regulator so chooses, to require 30% equity ownership by historically disadvantaged individuals but what it must do is to permit the commitments that are envisaged and articulated for in the ICT sector codes around valid conditions for application for individuals licenses,” said Malatsi.
ANC MP Oscar Mathafa said the party rejected the move, warning it could undermine black empowerment in one of the country’s least transformed sectors.
The Economic Freedom Fighters’ Sinawo Thambo accused Malatsi of using the language of “alignment” to avoid admitting the directive alters legislation.
“Any alignment will inevitably lead to parliamentary amendments,” he said, questioning why the department would relax BEE rules for Starlink, which complies with stricter equity requirements in India and Taiwan.
Tambo said the claim that Starlink would improve rural access to the internet was a myth, adding that local empowerment should not be compromised for tech companies.
Colleen Makhubele, of the uMkhonto weSizwe party said Malatsi had not provided a stakeholder engagement report or regulatory impact assessment to support the policy directive, adding that the minister was focusing on bringing in a foreign company instead of empowering 490 local operators.
The backlash also reflects deeper tensions about foreign technology firms operating in Africa without local oversight.
Malatsi said the directive invokes the BEE policy tool of equity equivalence, which has existed since 2003 and was expanded in 2016. Although it does not abolish the 30% equity ownership requirement, it obliges Icasa to consider alternative contributions that benefit the sector and society.
According to the communications department, South Africa’s 490 Icasa licensees face a dilemma when multinationals negotiate licence transfers to enter the market.