President Cyril Ramaphosa has voiced his support for the process undertaken by communications minister Solly Malatsi to introduce equity equivalent investment programmes (EEIPs) in the ICT sector.
Malatsi in May published a draft policy directive, which he intends issuing to Icasa, urging the communications regulator to investigate how EEIPs, which are already used extensively in other sectors of the economy, could be applied in licensing for telecommunications. The move had been sharply criticised by parliamentary communications portfolio chair Khusela Diko.
Speaking in parliament on Thursday, Ramaphosa said EEIPs are an innovative alternative to equity ownership requirements and have allowed a number of multinational companies to participate in the economy while contributing to the country’s transformation agenda.
“What [Malatsi] has announced is very much in line with our laws,” Ramaphosa said in response to a question by Economic Freedom Fighters MP Meisie Kennedy.
“There is no violation – as far as he concerned and as far as I am concerned – with regard to our laws. And it is not specifically aimed at one or any company; it is aimed at ensuring those who would want to participate in this process, be they local or from any other country, may find greater ease in doing so.”
Ramaphosa said Malatsi’s initiative will also align the regulatory regime in telecoms with other legal frameworks around broad-based black economic empowerment. Despite EEIPs being a common feature in other sectors, and the fact that the Electronic Communications Act makes room for them to be used in telecoms, there is a misalignment between the act and the regulations applied by Icasa.
White House meeting
Malatsi’s draft policy direction was published just two days after a delegation led by Ramaphosa visited US President Donald Trump in the White House where Starlink was one of the topics of discussion. Malatsi was subsequently questioned about the timing while being accused of introducing EEIPs to favour Starlink – an allegation the minister has repeatedly denied.
Ramaphosa on Thursday said his US visit “did not focus on issues of black economic empowerment”, but rather on resetting the relationship between South Africa and the US. He said government remains steadfast in its commitment to transformation.
Read: Starlink to South Africa: ‘We are ready to invest’
Elon Musk, owner of Starlink parent SpaceX, has repeatedly voiced criticism of what he described as South Africa’s “racist” BEE laws. At one point, Musk went as far as claiming the reason Starlink has not been licensed in South Africa is because “I am not black”.
In a letter last week to trade, industry & competition minister Parks Tau, Starlink dismissed “misleading claims” in sections of the media about its views on BEE and reiterated that it is keen to obtain an operating licence as soon as possible.
“Contrary to misleading claims in the media, Starlink has never sought an exemption from B-BBEE laws, nor have we asked for any special treatment. It is unfortunate that this narrative is being perpetuated, in our view, because Starlink supports a level playing field for the entire sector, not just specific operators,” wrote Ryan Goodnight, senior director for market access at Starlink.
“To be clear, the only reason Starlink is not in South Africa today is because Icasa’s licence regulations stipulate that all licenceholders must be 30% locally owned. As you are aware, Starlink is a global system, and we must retain sole ownership of all our subsidiaries for operational purposes. This is true in each of the nearly 150 countries, territories and other markets where we are licensed and providing service today.”
According to Ramaphosa, the application of EEIPs does not represent a deviation from government’s commitment to transformation. To the contrary, finding “innovative” ways to facilitate the participation of multinationals in the local economy while also driving the transformation agenda is of greater benefit to all, he said.
“As a country and a government that is committed to fostering economic growth and innovation, we are not averse to coming up with good solutions so long as there is a commitment to transformation – that, to us, is non-negotiable,” said Ramaphosa. – © 2025 NewsCentral Media
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