Communications minister Solly Malatsi gazettes the final policy direction on the role of equity equivalent investment programmes in the ICT sector.
[Story] Communications minister Solly Malatsi has gazetted the final policy direction on the role of equity equivalent investment programmes (EEIPs) in the ICT sector.
This follows the draft policy direction released in May, which some viewed asclearing the way for Elon Musk’s low-Earth orbit satellite internet constellation Starlink to operate locally.
South Africa’s current Electronic Communications Act (ECA) mandates that foreign telecoms companies must allocate 30% local equity to historically disadvantaged groups to gain a licence.
This has seen companies like Musk’s Starlink failing to obtain an operating licence in the country, as they have not complied with this requirement.
EEIPs are a mechanism through which international companies can secure empowerment status without having to sell a proportion of the entity to black-owned entities.
The daft policy direction proposed allowing EEIPs as an alternative – meeting transformation obligations through skills development, SMME support and shared infrastructure investment rather than direct shareholding.
Delivering his department’s budget speech in July, Malatsi said the draft policy direction stemmed from efforts to recognise EEIPs in the ICT sector and align policy to attract investment.
In a statement issued on Friday, the minister says the policy direction seeks to ensure that the full scope of economic empowerment is “properly recognised and applied” in the ICT sector.
“This alignment will help attract more investment, support meaningful transformation and improve the lives of South Africans, especially those in rural and underserved communities who still lack access to high-speed internet.”
Further, the policy direction “corrects inconsistencies” created when the Independent Communications Authority of South Africa (ICASA) adopted and amended its limitation on control and ownership regulations in 2021 and 2022, states the minister.
“These regulations referenced the BBBEE Act and the ICT Sector Code but only applied selected provisions, resulting in regulatory misalignment.”
According to Malatsi, the public consultation process garnered more than 19 000 submissions on the draft policy direction. Over 15 000 were substantive, while the others were duplicate submissions, he states.
“Ninety percent supported the policy direction, emphasising its potential to accelerate universal access to high-speed internet and ensure regulatory clarity. A minority raised concerns about possible dominance by large or foreign operators.”
He notes that mobile network operators, through their individual submissions and their representative body, the Association of Comms and Technology, expressed the need to hold licensees that qualify for EEIPs to the same regulatory standards and licence obligations as all other licensees.
These obligations include payment of fees, contributions to the Universal Service and Access Fund, fulfilment of universal service and social obligations, adherence to ICASA regulations, and compliance reporting.
These matters are all within ICASA’s control when considering individual licence applications, says Malatsi.
“The final policy direction reinforces the need for regulatory parity. It does not favour any
entity, bypass the ECA, or weaken transformation. Any changes ICASA makes to its regulations will apply equally to all licensees, as required by the ECA and the ICT Sector Code.
“This policy direction ensures fair and consistent application of empowerment laws in the ICT sector, supporting investment and expanding digital access to more South Africans.”
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