In a move seen to squarely court investment from Elon Musk’s Starlink in SA, communications minister Solly Malatsi has issued a directive that would enable foreign telecoms operators to enter the market in a way it says recognises alternatives that don't only include ownership.
Malatsi’s department of communications and digital technologies gazetted on Friday a policy directive on the role of equity equivalent investment programmes (EEIPs) in the ICT sector “as a mechanism to accelerate broadband access”.
This would open the door for Musk to start operating in SA, with the government addressing the SA-born businessperson’s biggest gripe with BEE laws he has made clear he would not follow.
The timing is also key given a tense exchange between President Cyril Ramaphosa and US President Donald Trump in Washington, underscoring a precarious trade relationship.
The rules around who can acquire a licence to provide electronic communications services or to operate a 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 SA’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,” said Malatsi’s department in a statement.
EEIPs 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”.
For now, the proposal is a draft that interested and industry players can comment on for the next 30 days, before the framework is finalised.
In recent months, regulator the Independent Communications Authority of SA (Icasa) has received oral and written submissions from telecom operators and other stakeholders about the proposal, releasing the findings in April.
The authority received submission from Vodacom, MTN, Telkom, MultiChoice, Amazon, Avanti and Starlink parent SpaceX.
Broadly, industry players are in support, emphasising the importance of harmonising satellite licensing frameworks with international best practices.
However, some raised concerns about the proposed licensing framework, arguing that it should benefit all sectors in telecommunications, not just the satellite sector. According to Icasa, others questioned the need for a new framework altogether, highlighting that satellite services have been operational in SA for decades without issues and the existing regulatory structure under the Electronic Communications Act is adequate.
Operators are working to make sure that the likes of Starlink do not get special treatment and adhere to the same laws and regulations they have to comply with.
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