Communications minister Solly Malatsi has reaffirmed that South Africa’s telecommunications licensing framework must align with the ICT Sector Code.
This, after the Independent Communications Authority of South Africa (ICASA), which falls under Malatsi’s scope, said changes to the law would be required to consider equity equivalent investment programmes (EEIPs) as an alternative in issuing telecoms licences.
The telecoms regulator was responding to the policy impasse that is viewed as a mechanism that would pave the way for Elon Musk’s Starlink to launch in South Africa.
The Electronic Communications Act (ECA) requires a minimum 30% ownership by historically-disadvantaged groups for individual licence-holders.
Malatsi last year gazetted his final policy direction recognising EEIPs, directing ICASA to use these as an alternative to the ECA requirement.
In its statement, ICASA said: “While the amended ICT Sector Code must be applied in licensing qualification criteria, full alignment with all provisions of the code, including EEIPs, would require a legislative amendment to the current ECA.”
Responding to ICASA’s position on his policy direction, the minister says his ministry “will pursue legislative amendments that will enable EEIPs to complement ownership requirements in telecommunications, through amendments to the ECA”.
“My mission in this job is to ensure every person in South Africa has access to affordable and meaningful connectivity that they can use to build sustainable livelihoods and get out of poverty,” he states.
“We will work with all stakeholders in society that share our mission to ensure South Africa fully unlocks the life-changing power that comes with access to the internet.”
Implementing EEIPs in telecoms would enable multinational companies that can’t sell equity to become empowered and be awarded telecoms licences. Malatsi’s directive was broadly seen to be pro-Starlink, as it would pave the way for the company to enter the country.
Musk has been eyeing bringing Starlink to South Africa for some time now, criticising the regulatory and ownership requirements to make the service available locally. Starlink is operational in several neighbouring African countries.
SpaceX’s Starlinklow-Earth orbit (LEO) satellite network has nearly 10 000 satellites currently in orbit. The company first launched its satellites in 2019.
In a statement, Khusela Sangoni-Diko, chairperson of the Parliamentary Portfolio Committee on Communications and Digital Technologies, welcomes ICASA’s position to uphold existing legislative and regulatory requirements in the telecoms sector, including broad-based black economic empowerment (B-BBEE) ownership provisions.
According to Sangoni-Diko, ICASA has made it clear that any attempt to introduce EEIPs as a substitute for direct ownership obligations would require amendments to the ECA, a position long held by the committee.
The chairperson says the committee “fully supports ICASA’s position that regulatory authorities cannot amend or circumvent legislation to accommodate multinational operators”.
“Transformation in the communications sector is not a procedural inconvenience that can be negotiated away through administrative mechanisms. It is a constitutional and developmental imperative intended to ensure meaningful economic participation by historically-disadvantaged South Africans,” she says.
The committee also reaffirms that regulatory processes must be respected and that any departure from existing ownership requirements would require formal legislative amendments through Parliament and not regulatory discretion.
It adds that South Africa’s communications policy framework remains firmly anchored in addressing historical inequalities, promoting inclusive economic growth and ensuring equitable access to the benefits of technological advancement.
Diko notes that LEO satellite broadband services are already being deployed in South Africa through partnerships and business models that comply with national legislation, while supporting local industry participation.
“This demonstrates that South Africa possesses both the capacity and expertise to expand broadband connectivity in a manner that supports local economic development, skills transfer, innovation and regulatory compliance,” she states.
Transformation barometer
Meanwhile, minister of trade, industry and competition Parks Tau has revealed insights into B-BBEE levels within the local ICT sector.
In a written reply to uMkhonto we Sizwe MP Sihle Ngubane, Tau references data from the B-BBEE Commission report, which shows the ICT sector’s share of level eight, or non-compliance, at around 30% between 2018 and 2023.
However, the sector had a decent share in terms of levels one to four at around 60% over the period.
Level one (highest B-BBEE status) compliance was around 25% among ICT entities in the 2019-2023 sample, he says.
According to Tau, the report states that the performance of ICT sector entities is against the maximum points available for scorecard elements.
“The report indicates a steep increase in the average number of points attained for enterprise and supplier development (ESD), likely due to a scorecard that strongly promotes ESD, which is allocated almost half the points.
“For ownership and skills development, there have been limited increases in points attained, and for management control, there has been a decline since 2018.”
The B-BBEE Commission report, says the minister, also observed that the ownership points achieved out of total points rose marginally from 78% in 2018 to 84% in 2023.
“The share of management control points achieved declined from 69% of total points available in 2018 to 53% in 2023.
“Skills development is the second lowest as a share of total points available and has been static since 2018. Consistent with the growth in ESD points across all sectors, the share of points achieved rose from 97% in 2018 to 104% in 2023, primarily due to the higher weight assigned for this element, especially for large entities compared to smaller entities in the industry.”
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