Communications minister Solly Malatsi has put his stamp on one of the most contentious issues in South Africa’s ICT sector: how black economic empowerment is applied to companies, like Elon Musk’s Starlink, that cannot, or will not, dilute ownership in their local operations.
In a final policy directive published on Friday and issued more than six months after a draft version was published for public comment, Malatsi has asked Icasa urgently to align its ownership regulations with the ICT BEE sector code, including recognition of equity equivalent investment programmes (EEIPs), which are already lawful under the Broad-Based Black Economic Empowerment Act and administered by the department of trade, industry & competition (DTIC).
In simple terms, Malatsi is telling Icasa it should not pretend it sits above the national empowerment framework – and to end a regulatory interpretation that has, for several years, placed South Africa at odds with its own B-BBEE legislation.
The move is likely to be welcomed by Starlink, which has been lobbying hard this year for a change to the regulations to allow its satellite broadband service to be licensed in South Africa without it having to sell equity to local (and black) investors, something it has said it does not do in any of the markets in which it is licensed.
Icasa does not allow for the use of EEIPs – a mechanism explicitly designed for multinational companies whose global shareholding structures prohibit local equity dilution – in its licensing regulations.
According to Malatsi, this has created a legal inconsistency: the B-BBEE Act requires that sector-specific empowerment be measured only in terms of the approved sector code. Second, it has chilled investment by signalling Icasa could impose empowerment conditions that differed materially from those recognised by the DTIC.
‘Not permissible in law’
The issue exploded into the public consciousness in 2024 and 2025 as Starlink explored options to enter the South African market. Malatsi’s directive makes it clear that government supports the option of EEIPs to attract foreign investment.
The policy directive reaffirms the supremacy of the ICT sector code and reminds Icasa that it participated in the development of the code, that section 10 of the act binds all organs of state to apply it and that deviation “is not permissible in law”.
Read: Starlink risks ceding ground to rivals in SA amid licensing battle
It also directly challenges Icasa’s decision to excise large portions of the code from its ownership regulations – including the statements dealing with ownership principles, management control, skills development, enterprise and supplier development, and, crucially, equity equivalents for multinationals.
EEIPs, the policy directive notes, are not symbolic gestures. They are measured either at 30% of the value of South African operations or at 4% of local revenue annually, and must be approved and monitored by the DTIC. In other words, they are substantive, audited empowerment contributions, not voluntary donations.
According to the policy directive, more than 19 000 submissions were received, of which about 15 000 were substantive in nature. According to the department, about 90% of the submissions supported the policy directive proposals on EEIPs.
That figure matters politically, because it undermines claims that the directive is a backroom concession to a single foreign company – Starlink – and instead frames it as a response to overwhelming industry and public support for regulatory certainty.
The objections raised – concerns about foreign dominance, weakened transformation, regulatory arbitrage and data sovereignty – are methodically dealt with in the final policy directive. Perhaps most importantly, the directive emphasises parity: if Icasa amends its regulations, they must apply equally to all licensees. This parity has been demanded by South Africa’s telecoms operators, including Vodacom and MTN.
The directive does not automatically allow Starlink to be licensed. Icasa must still amend its ownership regulations, and companies will still need either qualifying black ownership or a DTIC-approved EEIP.
Under the policy directive, Malatsi wants to ensure that Icasa can no longer insist on a narrow interpretation of empowerment that ignores nationally approved sector codes. Nor should it default to the blunt 30% equity requirement without considering “other conditions”. – © 2025 NewsCentral Media
Get breaking news from TechCentral on WhatsApp. Sign up here.
