The Minister of Communications has issued a firm policy direction to Icasa, effectively ordering the regulator to drop its strict equity requirements in favour of a model that welcomes multinationals like SpaceX. While the rest of South Africa was using this Friday evening to get the Dezemba vibes going, Minister of Communications and Digital Technologies took the opportunity to crack a window open to push a Starlink deal through. And Solly Malatsi seems to be recycling the gameplan that got the Vodacom/Maziv deal over the line: a tag team partnership with Minister of Trade and Industry Parks Tau.
In Government Gazette No. 53855, published today (but signed on 11 December), Malatsi issued a formal policy direction instructing the Independent Communications Authority of South Africa (Icasa) to “urgently consider alignment” of its regulations with the national ICT Sector Code. Whatever legal jargon you prefer, this is effectively an instruction for Icasa to stop blocking foreign investors who refuse to sell equity.
For years (well, at least most of this year) Icasa has held a hard line: if you want a telecom license in South Africa, 30% of your equity must be in the hands of historically disadvantaged groups (HDG). This has been the primary thorn for Elon Musk’s SpaceX, which has a global policy of retaining 100% ownership of its subsidiaries. Under current rules, Starlink simply cannot launch here.
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Malatsi’s directive comes after consultation earlier this year and is effectively forcing Icasa to recognise the Equity Equivalent Investment Programmes (EEIPs). As Daily Maverick has previously reported, the EEIP policy is actually a great bit of lateral thinking. It allows multinationals to bypass the equity sale requirement by instead investing in local skills development, enterprise support, or infrastructure – provided the Department of Trade, Industry and Competition (DTIC) approves the deal.
Malatsi argues that Icasa’s refusal to recognise these equivalents is “not permissible in law”. He contends that the Broad-Based Black Economic Empowerment Act (B-BBEE Act) overrides Icasa’s sector-specific regulations. This is where the political machinery becomes interesting. This directive doesn’t just pressure Icasa; it shifts the gatekeeping power from an independent regulator to the executive cabinet.
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