Communications minister Solly Malatsi has gazetted a draft policy direction that potentially clears the way for tech billionaire Elon Musk’s Starlink to operate locally.
This comes as president Cyril Ramaphosa and his delegation this week concluded a working visit to Washington DC aimed at resetting trade relations with the US, its second biggest trading partner.
As part of the new trade and investment framework presented to the US, Ramaphosa revealed in a post-meeting media briefing, when asked about Starlink, that SA was looking to create a conducive environment for foreign direct investment.
Malatsi last year announced plans to issue new policy direction to the Independent Communications Authority of South Africa (ICASA), to lower regulatory hurdles that inhibit investment in the country.
In a statement issued today, the minister says he has gazetted a draft policy direction on the role of equity equivalent investment programmes (EEIPs) in the ICT sector as a mechanism to accelerate broadband access.
The minister notes the draft policy direction seeks to provide the “much-needed” policy certainty to attract investment in the ICT sector, and specifically with regards to licensing for broadcasters, internet service providers, mobile networks, or fixed and mobile networks.
“Currently, the rules around who can acquire a licence to provide electronic communications services, or to operate an electronic communications network, require a minimum of 30% shares to be in the hands of historically disadvantaged individuals.
“These regulations do not currently allow companies that can contribute to South Africa’s transformation goals in ways other than traditional ownership, to qualify for individual licences under the Electronic Communications Act (ECA), whether or not they are big international companies that do not usually sell shares to local partners.
“EEIPs, provided for under the Broad-Based Black Economic Empowerment [BBBEE] Act (Act 53 of 2003) and the ICT Sector Code, allow qualifying multinationals to meet empowerment obligations through alternatives to 30% ownership – such as investing in local suppliers, enterprise and skills development, job creation, infrastructure support, research and innovation, digital inclusion initiatives, and funding for SMMEs. Despite the legal standing of the ICT Sector Code under the BBBEE Act, ICASA’s ownership regulations do not fully reflect its provisions – particularly regarding deemed ownership and EEIPs.”
The minister further points out the policy direction aims to ensure consistency, unlock investment and give practical effect to the ICT Sector Code in line with national development goals, including transformation.
Once finalised, the draft policy direction will allow the minister to direct regulator ICASA to:
- Align its ownership regulations applicable to licensing under section five of the ECA with the full scope of the ICT Sector Code, including recognition of EEIPs and deemed ownership mechanisms.
- Apply the same BBBEE criteria to the ICT sector, ensuring alignment with national priorities, transformation objectives and investment attraction.
- Engage with the Department of Communications and Digital Technologies, Department of Trade Industry and Competition and the ICT Sector Council to define acceptable EEIP contributions in the ICT context.
Crucially, Malatsi says the direction makes it clear that:
- New market entrants – including those offering new or disruptive technologies – will not be exempt from transformation obligations. Even if companies are not rolling out large-scale infrastructure, they will be required to make commitments that are substantive and clearly aligned with South Africa’s socio-economic development goals.
- Different technologies may have different rollout models, but transformation is non-negotiable – all players must contribute meaningfully to equity, skills development and economic inclusion.
- ICASA’s regulations may continue to require 30% equity ownership by historically disadvantaged individuals but must also permit commitments envisaged by the ICT Sector Code as valid conditions for applications for individual licences.
South Africa’s transformation obligations and policies have seemed to stand in the way of Starlink’s local availability, as frequently vocalised and criticised by Musk.
Under South African legislation, companies providing telecoms services must hold ECNS and ECS licences, which require at least 30% ownership by historically disadvantaged South Africans.
Starlink is a low-Earth orbit satellite internet constellation operated by Musk’s SpaceX, providing satellite internet access coverage to over 60 countries. SpaceX began launching Starlink satellites in 2019.
It is available in several neighbouring African nations, including Botswana, Democratic Republic of the Congo, Lesotho, Mozambique, Nigeria and Zambia.
Starlink has remained unavailable in South Africa, and ICASA has confirmed it has yet to receive a formal application from Starlink for its services to operate in the country.
In light of the latest developments, Malatsi’s department has invited all interested parties to submit comments on the draft policy direction, within 30 days of the publication in the Government Gazette, which will be taken into account in finalising the policy direction.
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