The presidency says minister of Communications and Digital Technologies, Solly Malatsi, acted within the confines of the law by publishing a policy direction in the Government Gazette on the role of equity equivalent investment programmes (EEIPs) in the ICT sector.
Last week, Malatsi instructed the Independent Communications Authority of South Africa (ICASA) to recognise EEIPs as an alternative to a law that requires telecommunications network service providers to be 30% owned by historically disadvantaged groups.
This follows the draft policy direction released in May, which some viewed as clearing the way for Elon Musk’s low-Earth orbit satellite internet constellation Starlink to operate locally.
The move resulted in an outcry from the Portfolio Committee on Communications and Digital Technologies, the Economic Freedom Fighters, and the African National Congress, who criticised the minister for what they called “an unlawful move that bypassed Parliament”.
They complained that Malatsi, in his capacity as minister, has neither the legislative nor moral authority to reverse the gains of democracy through this unilateral action, unsupported by ICASA or the department he leads.
Responding to the backlash during a media briefing this week, presidential spokesperson Vincent Magwenya clarified government’s position, saying the policy direction does not override existing legislation and that any regulatory decisions remain subject to the law.
According to Magwenya, the policy intervention should not be viewed through the lens of a single company, amid widespread speculation that the move was intended to pave the way for Starlink’s entry into SA.
“The application for a licence within the communications and ICT sector is not only from Starlink, so we should just avoid the trap of getting fixated over Starlink,” he explained.
“There are four or five other companies that have expressed interest in providing their services here in SA; it’s not only Starlink.
“What the minister is doing is within the law. He is looking at what can be done to accelerate those processes. As you know, the law is quite clear with respect to the local ownership element for those seeking to be licensed as telecommunications network service providers. That’s what the minister is doing.”
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 draft policy direction proposed allowing EEIPs as an alternative – meeting transformation obligations through skills development, SMME support and shared infrastructure investment rather than direct shareholding.
Magwenya stressed that ICASA remains an independent regulator and that any licensing decisions will ultimately be guided by the current legal framework. Should the law prove too restrictive, Magwenya pointed out the appropriate course of action would be a legislative amendment, rather than executive overreach.
“The president has been aware of that process. However, what the president won’t endorse is the subversion of the law by players in this sector. The president has been quite clear that whatever has to be done must be done within the framework of our laws.
“And so if it turns out that ICASA cannot do anything beyond what has been written in law, then the process will be to look at an amendment of the legislation. How the process needs to proceed is well guided in our statute,” he pointed out.
It’s still early days for anybody to speculate on what ICASA’s decision is going to be, he added.
“The regulator will have to exercise its judgement independently and do so in accordance with the law,” Magwenya concluded.
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