Source: South Africa News Agency
Government has sought to allay fears that the recently published policy direction on the role of equity equivalent investment programmes (EEIPs) in the Information and Communication Technologies (ICT) sector was intended to open a special dispensation for a particular company or an individual.
On 23 May 2025, the Minister of Communications and Digital Technologies Solly Malatsi gave notice of the proposed policy direction to be issued to the Independent Communications Authority of South Africa (ICASA) in terms of section 3 of the Electronic Communications Act 36 of 2005 (the ECA) regarding Broad-Based Black Economic Empowerment (B-BBEE) in the ICT Sector.
The policy direction seeks to provide much-needed policy certainty to attract investment into the ICT sector, and specifically with regards to licensing for broadcasters, internet service providers, mobile networks, or fixed and mobile networks.
The publishing of the policy direction in the Government Gazette by the Minister on Friday comes after President Cyril Ramaphosa’s Working Visit to the United States (U.S.), where the President met with President Donald Trump at the Oval Office in Washington D.C. to reset and revitalise bilateral relations between South Africa and the U.S.
Among the U.S.’s delegation was Elon Musk, Special Government Employee, U.S. Department of Government Efficiency (DOGE), who is also Starlink’s founder and believed to have interests in bringing his company to South Africa to provide internet services.
Appearing before the Portfolio Committee on Communications and Digital Technologies on Tuesday, the Minister explained that the Department of Communications and Digital Technologies (DCDT) has been working on the proposed policy since September last year.
“Last year, we indicated the efforts from the department around the full recognition of equity equivalent investment programmes (EEIPs) in the ICT sector. This is also reflected in the Medium Term Development Plan for the seventh administration.
“We are not attempting to open a special dispensation for Starlink or any other company or an individual. There is no conspiracy on our part in relation to the policy direction. There is no underhanded effort in darkness to railroad the South African public,” Malatsi said.
In a statement issued on Friday, the Minister indicated that 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,” the Minister said.
EEIPs, provided for under the Broad-Based Black Economic Empowerment Act (Act 53 of 2003) and the ICT Sector Code, allow qualifying multinationals to meet empowerment obligations through alternatives to 30% ownership. Examples of the latter can be in the form of investing in local suppliers, enterprise and skills development, job creation, infrastructure support, research and innovation, digital inclusion initiatives, and funding for Small, Medium, and Micro Enterprises (SMMEs).
Despite the legal standing of the ICT Sector Code under the BBBEE Act, the Independent Communications Authority of South Africa’s (ICASA) Ownership Regulations do not fully reflect its provisions – particularly regarding deemed ownership and EEIPs.
In the process of developing the policy direction, ICASA was informed on 4 October 2024 by the DCDT of the intention to issue a policy directive to provide policy clarity on the full introduction of the EEIPs in the ICT sector.
“That was followed by a public comment communication released on that specific day. As required by the process, we submitted the draft policy direction to ICASA to give them an opportunity to be able to engage with it,” the Minister said.
Malatsi emphasised that EEIPs are not a new invention as it was approved by the Department of Trade, Industry and Competition (the dtic) in 2016.
EEIPs are alternative contributions that multinational companies can make to achieve their BBBEE ownership obligations when they are unable to sell shares directly to black South Africans due to global policies.
These contributions, approved by the dtic, are essentially investment initiatives that promote enterprise development, job creation and socio-economic advancement.
“While ECA, which guides the policy making in our sector and the ICASA Act do allow for ICASA to make the regulations, it also allows for ICASA in making those regulations that it must give effect to the whole parts of the ICT sector code.
“My duty is to ensure that there is alignment between the codes and regulations, in fulfilment of all our national laws, in this case the BBBEE Act. In terms of the process that we have followed from the formulation of the policy directive, leading ultimately to the gazetting, we have followed the prescripts a Ministerial policy directive should follow,” the Minister said.
The Minister asserted that his department has fulfilled the key steps in the formulation of the policy direction, which includes engagement with ICASA.
“The consultation with the authority means that its submission must be given due consideration. It does not mean that the regulator can stop a Minister from exploring a policy direction because there are two steps.
“The first step is the opportunity for the regulator to engage with the draft policy and the second step is post the public comment stage, which is where we are.
“We must take into consideration that each and every interested stakeholder or anyone with views on this policy direction must have their views being considered in the formulation of the policy,” he said.
Stakeholders have a 30-day period from the day on which the Gazette was published to make their submissions on the policy directive.
“What is incumbent of the department and the Ministry is that in the consideration of inputs from the public, they must inform the final formulation of the policy direction, which will be shared with the regulator as it is required.
“I am pretty clear that transformation is sacrosanct in our country; that it is a non-negotiable in order for the country to achieve its aspirations, but most importantly to live up to the provisions of the BBBEE Act as it was articulated and envisaged,” the Minister said. – SAnews.gov.za