Communications minister Solly Malatsi has defended his department’s move to issue a directive that would enable foreign telecom operators to enter the SA market saying government was not just trying to find a pathway to allow Elon Musk’s Starlink to operate in SA.
Malatsi is under fire over the move, largely seen as a way to allow Musk’s Starlink to operate in SA without having to give equity in terms of BEE.
But he says the new regulations would allow for more than just one new operator to enter the market, creating a more competitive environment.
“We are not attempting to open a special dispensation for Starlink, any other company or an individual,” the minister said in a communications and digital technologies parliamentary portfolio committee meeting on Tuesday.
This comes a few days after Malatsi gazetted a policy directive on the role of equity equivalent investment programmes (EEIPs) in the information and communication technology (ICT) sector “as a mechanism to accelerate broadband access”.
The rules governing who can acquire a licence to provide electronic communications services or to operate a network require a minimum of 30% of shares to be in the hands of historically disadvantaged individuals.
While the government’s move is seen to be trying to address SA-born Musk’s gripe with SA’s BEE laws, Malatsi insists he is not trying to open the door for Musk to start operating in SA.
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”.
Malatsi said the department was simply exploring an option that has been used by international operators in other sectors.
“We are saying that the regulations in our sector must consistently make provision for the two choices that exist in any other sector … when it comes to the role of multinationals, whether small or big, that the provisions about the option of a 30% local ownership or the pathway of equity equivalents must be consistently available or at least for the authority [Icasa] to consider the consistency of that option.
“The ultimate intention is to ensure that the regulation is aligned with national empowerment regulations for licensing and potential new entrants,” he said.
The timing is also key given last week’s tense exchange between President Cyril Ramaphosa and US President Donald Trump in Washington, underscoring a precarious trade relationship.
On this point too, Malatsi said the timing of the gazette was not a deliberate attempt to appease the US after the presidential engagement.
“Different people are always going to have different views about the timing,” he said.
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, and released the findings in April.
The minister said the process leading to this process was initiated as early as October 2024.
“We did say, even at the time, in many of the public engagements that we had, that the intention in terms of our own timelines would be to aim towards a finalisation of the policy direction towards mid-2025. And we are now as close to mid ’25 as humanly possible.”
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