Starlink conspiracy claims shot down

Communications minister Solly Malatsi has rejected claims that his recently gazetted policy directive regarding equity equivalent investment programmes (EEIPs) is part of a conspiracy to let Starlink operate in the country.

Speaking before the Portfolio Committee on Communications and Digital Technologies, the minister said his department and he have been open throughout the process.

“There is no conspiracy on our part with regard to this policy direction. There is no underhanded effort in darkness to railroad this,” said Malatsi.

“We have at all times communicated about the process publicly, and we are comfortable that the stage that we are in now is legitimate, which opens the process for all stakeholders to make submissions.”

He added that his department must and will consider all views submitted through the process.

Regarding recommendations for pursuing amendments to the Electronic Communications Act (ECA), Malatsi said the policy directive will be the most effective intervention.

“There are multiple avenues that are available to consider which instrument will be timely and which instrument will be effective in addressing the question that we are seeking the regulator to ask,” said Malatsi.

“We felt that, on the consideration of all those options, the policy directive is still the effective intervention to do that.”

However, he noted that, based on the consideration of stakeholder submissions regarding the policy directive, there may be a need to explore amendments to the ECA.

“There are various elements of the ECA that require amendments … those will be considered in dealing with the fundamental questions around the holistic amendment of the ECA versus the efforts currently going on,” he said.

“We have to maximise options that can help deal with one of the most pressing fundamental needs in our country, which is around broadband connectivity and expanding it.”

The minister published the policy directive to provide alternatives to South Africa’s BEE ownership requirements in the ICT space on Friday, 23 May 2025.

Starlink breakthrough

SpaceX’s Starlink satellite Internet service is currently unable to obtain the necessary licences to operate in South Africa because it lacks 30% ownership by historically disadvantaged groups.

It must either partner with a local entity and then apply for the spectrum licences it needs, or make a BEE deal with its local entity, SpaceX Internet Services South Africa.

As an alternative, Malatsi has proposed that Icasa recognise EEIPs for licensing purposes to provide multinational players with another path to launch locally.

This wouldn’t just benefit Starlink but also various overseas companies considering investing in South Africa.

Malatsi published the proposed policy directive via a Government Gazette notice. He proposed harmonising the ECA with other legislation that recognises ownership in the sector.

“The objectives of this policy direction are to give effect to existing national and sector policy pertaining to the rollout of broadband and the bridging of the digital divide,” the directive reads.

The minister also believes the policy direction will encourage investment and bolster competition in the ICT sector.

In a statement, Malatsi’s department said the directive aligns with the government’s mission to attract investment through regulatory reforms and expand broadband access.

The government gazette notice focuses on the role of EEIPs in the ICT sector.

His department said that requiring a minimum of 30% of shares to be held by historically disadvantaged people prevents companies that can contribute meaningfully in South Africa from acquiring licences.

EEIPs, provided for under the Broad-Based Black Economic Empowerment (BBBEE) Act and the ICT Sector Code, provide multinationals with alternative routes to meet their empowerment obligations.

This can include investing in local suppliers, enterprises, and skills development, job creation, infrastructure support, research and innovation, and digital inclusion initiatives.

However, enabling EIPPs will require the Independent Communications Authority of South Africa (Icasa) to amend specific regulations.

Once finalised, the draft directive will enable the minister to direct Icasa to:

• Align its ownership regulations applicable to licensing under the ECA, with the full scope of the ICT Sector Code, including recognition of EEIPs and deemed ownership mechanisms.
• Apply the same BBBEE criteria to the ICT sector, ensuring alignment with national priorities, transformation objectives, and investment attraction.
• Engage with various departments and the ICT Sector Council to define acceptable EEIP contributions in the ICT space.

Stakeholders have 30 days from the notice’s publication on Friday, 23 May 2025, to submit their comments on the draft policy direction.