A court challenge by business organisation Sakeliga could open a path for operators such as Elon Musk’s Starlink to qualify for telecoms licences without selling 30% of their local operations – and without parliament first changing the law.
In papers filed in the high court in Pretoria on 9 November, Sakeliga asks the court to set aside Icasa’s decision, communicated on 13 May, that it cannot give full effect to communications minister Solly Malatsi’s December 2025 empowerment policy direction without a legislative amendment.
It also wants the court to declare that the Electronic Communications Act (ECA) does not impose a fixed 30% minimum ownership by historically disadvantaged groups as a pre-condition for granting, renewing or transferring an individual licence. Instead, Sakeliga argues, the act allows Icasa to accept alternatives, including equity-equivalent investment programmes (EEIPs).
EEIPs, which are recognised in the broad-based black economic empowerment code for the ICT sector and administered by the department of trade, industry & competition, let multinationals invest in areas such as skills development and enterprise support instead of selling equity in their local subsidiaries.
“The ECA requires a minimum 30% ownership by historically disadvantaged groups for individual licence holders.
Icasa
Sakeliga, a Pretoria-based non-profit company founded in 2011, campaigns for free-market policies, property rights and the rule of law. It says in its affidavit that it is funded largely by recurring donations from about 8 000 individuals and businesses. It has brought a string of challenges to empowerment requirements that it argues regulators have imposed without legal authority. In June, the high court ruled in its favour that international airlines could not be made to meet B-BBEE criteria to obtain licences, Moneyweb reported, because the law governing those licences doesn’t require it.
This case is different. The 30% ownership requirement is written into the ECA itself, so Sakeliga is arguing over how the act should be read – and invoking the B-BBEE Act and its sector codes in support of more flexible rules.
Malatsi’s direction told Icasa to “urgently consider” aligning its ownership regulations with the ICT sector code. It was widely seen as designed to clear a path to a licence for Starlink, whose entry into South Africa has stalled because SpaceX has refused to cede 30% of its local operation to historically disadvantaged groups. The direction itself dismisses “the perception that the policy direction is intended to benefit Starlink”, saying it would apply to all licensees equally.
Icasa’s response, in a brief statement on 13 May, was that the ECA “requires a minimum 30% ownership by historically disadvantaged groups for individual licence holders”. While the amended ICT sector code “must be applied in licensing qualification criteria”, it said, “full alignment with all provisions of the code, including equity equivalent investment programmes, would require a legislative amendment”.
The minister’s case, argued by someone else
Malatsi is cited as a respondent, along with Icasa, its chairman and the director-general of the department of communications & digital technologies – he as the minister responsible for the ECA, which Sakeliga’s fallback argument attacks. But its main case, set out in a founding affidavit by legal officer Johann Venter, leans heavily on the minister’s own statements, his speech to parliament in July 2025 and the policy direction itself.
In effect, Sakeliga’s main case backs the minister against his own regulator. Policy directions are not binding on Icasa, which must only consider them, as the affidavit acknowledges, so a win would not on its own oblige the regulator to adopt EEIPs.
The case turns on section 9(2)(b) of the ECA. It requires Icasa, when inviting applications for individual licences, to set out “the percentage of equity ownership to be held by persons from historically disadvantaged groups, which must not be less than 30%, or such other conditions or higher percentage as may be prescribed”.
Sakeliga argues that the words “or such other conditions” give Icasa a choice, and that its reading leaves them with no meaning at all. “A 30% equity ownership requirement is one condition Icasa may prescribe. But it is not the only one,” the affidavit says.
The policy direction makes the same argument, and points to the section’s history. As originally enacted in 2005, it allowed only for “such higher percentage as may be prescribed”; the words “other conditions” were added by amendments in 2014. The explanatory memorandum to the 2013 bill that made the change said the 30% requirement “has been retained for the time being provided that broad-based black economic empowerment requirements prescribed by Icasa… may replace it in due course”.
Sakeliga also argues that Icasa’s decision breaches the ECA’s requirement that it act “in accordance with the requirements of the ICT charter” when granting licences. It says the decision breaches the B-BBEE Act too, which requires organs of state to apply the relevant sector code when setting criteria for licences, and says the act prevails over earlier laws in a conflict on empowerment matters. It calls the decision irrational, and says Icasa failed to consider relevant factors, including the policy direction’s goal of promoting broadband roll-out.
The 30% floor, the affidavit says, excludes “multinational investors whose global corporate structures do not permit the sale of equity in local subsidiaries”, resulting in “less investment, less competition and slower broadband roll-out”.
A fallback that targets the act itself
If the court finds that Icasa has read the law correctly, Sakeliga wants section 9(2)(b) declared unconstitutional, to the extent that it makes 30% ownership a precondition for a licence without recognising EEIPs and the other elements of the ICT sector code.
On that reading, it argues, the section is an unlawful quota rather than a target. It operates as “an absolute bar against those who do not meet it”, infringing the rights to equality and to choose a trade freely. A high court order declaring an act of parliament invalid has no force until it is confirmed by the constitutional court.
Even a win on its main argument would leave empowerment requirements in place, Sakeliga acknowledged in a statement. The state “would replace a racial quota with a racial handicap, which – while remaining objectionable – constitutes an improvement over the current quota system”, it said.
Parliament hasn’t moved
The court route matters because the legislative one has stalled. The day before Icasa’s statement in May, Malatsi told parliament the government would “pursue legislative amendments that will enable equity equivalent investment programmes to complement ownership requirements in telecommunications”. But the Electronic Communications Amendment Bill, tabled in parliament in April, does not deal with ownership or equity equivalence.
Pressure on the rules has also come from inside the industry. Telkom, in which the state is the biggest shareholder, told Icasa in February that its ownership regulations go beyond what the B-BBEE Act and the ICT sector code envisage. And the ownership test is set to matter more: Icasa has proposed letting new operators apply to it directly for network licences, but applicants would still have to meet the ECA’s ownership requirements.
Under the court rules, Icasa has 15 days to file the record of its decision, after which Sakeliga may amend its case. The respondents have 15 days to say whether they will oppose. – (c) 2026 NewsCentral Media
