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- Section 9(2)(b) of the Electronic Communications Act, 2005 (Act No. 36 of 2005) (ECA) provides that individual licences must include the percentage of equity ownership to be held by persons from historically disadvantaged groups, which must not be less than 30%, or such other conditions or higher percentage as may be prescribed under section 4(3)(k) of the Independent Communications Authority of South Africa Act, 2000 (Act No. 13 of 2000)(ICASA Act).
- Section 4(3)(k) of the ICASA Act provides that the Authority may make regulations on empowerment requirements to promote broad-based black economic empowerment. Broad-based black economic empowerment has the meaning assigned to it in the Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003) (B-BBEE Act).
- The Authority has opted to prescribe regulations on empowerment requirements to promote broadbased black economic empowerment under section 4(3)(k) of the ICASA Act and published the Regulations in respect of the Limitations of Control and Equity Ownership by Historically Disadvantaged Groups (HDG) and the Application of the ICT Sector Code in General Notice No. 170, Government Gazette No. 44382 of 31 March 2021, as amended.
- The use of the word ‘or’ in section 9(2)(b) of the ECA is peremptory, and therefore the requirement for equity ownership by historically disadvantaged groups is replaced by the option of adopting regulations prescribed under section 4(3)(k) of the ICASA Act.
- In addition, the B-BBEE Act provides in section 10 that every organ of state and public entity must apply any relevant code of good practice issued in terms of the B-BBEE Act in determining qualification criteria for the issuing of licences, concessions or other authorisations in respect of economic activity in terms of any law. It further provides that an enterprise in a sector in respect of which a sector Code of Good Practice has been issued, may only be measured for compliance with the requirements of broadbased black economic empowerment in accordance with that code.
- It follows that enterprises in the ICT sector may only be measured for compliance with the requirements of broad-based black economic empowerment in accordance with the Amended Broad-Based Black
Economic Empowerment (B-BBEE) ICT Sector Code. - The Regulations in respect of the Limitations of Control and Equity Ownership by Historically Disadvantaged Groups (HDG) and the Application of the ICT Sector Code contradict the legal framework for broad-based black economic empowerment by prescribing equity ownership requirements by historically disadvantaged groups and black people and do not recognise compliance with the ICT Sector Code in respects other than ownership.
- The broad-based black economic empowerment status level of an entity is the accepted method to measure overall performance against the ICT Sector Code and promotes broad-based black economic empowerment, including through equity equivalent investment programmes.
The Authority is hereby directed, in terms of section 3(2) of the Electronic Communications Act, 2005 (Act No. 36 of 2005) to urgently consider alignment of the Regulations in respect of the Limitations of Control and Equity Ownership by Historically Disadvantaged Groups (HDG) and the Application of the ICT Sector Code, with the Amended Broad-Based Black Economic Empowerment (B-BBEE) ICT Sector Code.
Crucially, Malatsi says the direction makes it clear that:
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- New market entrants – including those offering new or disruptive technologies – will not be exempt from transformation obligations. Even if companies are not rolling out large-scale infrastructure, they will be required to make commitments that are substantive and clearly aligned with South Africa’s socio-economic development goals.
- Different technologies may have different rollout models, but transformation is non-negotiable – all players must contribute meaningfully to equity, skills development and economic inclusion.
- ICASA’s regulations may continue to require 30% equity ownership by historically disadvantaged individuals but must also permit commitments envisaged by the ICT Sector Code as valid conditions for applications for individual licences.
Draft policy direction
Letter from SpaceX
In the News
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- Forbes — Starlink May Launch In South Africa Soon After Government Policy Changes
- Gadget — Starlink heads for African schools – but not South Africa
- BusinessTech — South Africa paving the way for Starlink
- MyBroadband — R500-million Starlink deal for South Africa
- TechAfrica News — Starlink Proposes US$27.6 Million Investment to Connect Rural South African Schools
- iTWeb — Malatsi proposes alternative path to bring Starlink to SA
- Tech Central — Starlink to South Africa: ‘We are ready to invest’
- iTWeb — Starlink reaffirms commitment to SA amid licence impasse
- iTWeb — BEE conundrum for SA’s satellite connectivity
- iTWeb — Elon Musk takes aim at SA ahead of president’s US visit
- CDH — Minister of Communications and Digital Technologies issues proposed policy direction to ICASA on B-BBEE in the ICT Sector
Elon Musk’s Starlink Nears South Africa Entry With $113 Million Deal. Elon Musk’s Starlink is finally making moves to enter South Africa, with a reported $113 million investment deal aimed at meeting the country’s strict Black Economic Empowerment (BEE) rules. The deal comes after years of tension, including Musk’s criticism of BEE laws as “racist” and accusations that they blocked Starlink’s entry. Now, South Africa’s government is proposing regulatory changes that could allow foreign tech firms to qualify through local investments instead of equity transfers. While approval still lies with the country’s telecom regulator, the deal signals a major breakthrough and Starlink may soon be live in Musk’s homeland.
Elon Musk’s Starlink South African License Decision Up to Regulator. The Independent Communications Authority of South Africa will decide whether to award Elon Musk’s Starlink an operating license, a government minister said. Pretoria-born Musk indicated that he wants Starlink internet services to be made available in Africa’s largest economy, but he has refused to relinquish any equity in the business to comply with Black-empowerment rules. Bloomberg’s Loni Prinsloo reports.
South Africa Moves To Change Empowerment Law For Musk’s Starlink Launch. The South African government is taking steps to approve Elon Musk’s Starlink internet service in the country. To make this happen, they’re considering a policy change that would let Starlink operate without having to give up 30% ownership to Black South Africans. Watch this report for more details!
SABC News Regulatory framework for Elon Musk’s Starlink in SA: Adv Zanyiwe Nthatisi Asare. South Africa is not planning to water down its Black economic empowerment laws just to suit Elon Musk’s Starlink. That’s according to Communications Minister Solly Malatsi. The minister was responding to criticism of policy changes he announced days after President Cyril Ramaphosa met his US counterpart, Donald Trump. The changes were published on Friday, the day after Ramaphosa returned from the United States. The policy changes would allow communications companies, including Starlink, to bypass a requirement to sell 30% of the equity in their local subsidiaries owned by historically disadvantaged groups. Let’s explore this further with are joined by Advocate Zanyiwe Nthatisi Asare-Cyber Law, Public Policy and Internet Governance Expert.
Why is Elon so desperate to get Starlink into South Africa? Elon Musk’s Starlink claims it has lined R2 Billion to invest in SA to build regional infrastructure to support the entire Southern African Development Community (Sadc) region if they can get a license to operate in South Africa without BBBEE.
Newzroom Afrika Starlink in SA: Game-changer or BEE loophole? A proposed policy shift could allow Elon Musk’s Starlink to operate in South Africa without meeting strict B-BBEE ownership rules. Editor-in-Chief of Stuff magazine, Toby Shapshak, unpacks the implications for tech regulation, digital access, and economic empowerment.
Newzroom Afrika Bantima Information Technology Group’s Shepherd Mphambela says only 20% of South Africans will be able to afford Starlink subscription based on how the product services are priced in neighbouring countries.
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