Starlink breakthrough in South Africa

Communications Minister Solly Malatsi has issued a proposed policy direction to provide alternatives to South Africa’s BEE ownership requirements in the ICT space.

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.

Malatsi has been pushing for the government to allow equity equivalent investment programmes (EEIPs) in the ICT sector to enable multinationals an alternative path to launch in South Africa.

These would not only benefit Starlink, but also other overseas companies considering investing in South Africa.

In a Government Gazette notice, Malatsi proposed harmonising the Electronic Communications Act (ECA) with other legislation that applies to recognising ownership in the ICT 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 notice reads.

Additionally, Malatsi believes the policy direction will help encourage investment and promote competition in the sector.

According to a statement from the department, the directive aligns with the Government of National Unity’s mission to attract investment through regulatory reforms and accelerate broadband access.

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

“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,” the DCDT said.

It added that the regulations prevent companies that can contribute to the nation’s transformation goals from acquiring individual licences.

EEIPs, provided for under the Broad-Based Black Economic Empowerment (BBBEE) Act and the ICT Sector Code, enable multinationals to meet empowerment obligations through alternatives to the 30% ownership rule.

These programmes 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 to amend specific regulations.

“Despite the legal standing of the ICT Sector Code under the BBBEE Act, Icasa’s ownership regulations don’t fully reflect its provisions, particularly regarding deemed ownership and EEIPs,” the DCDT said.

“Therefore, this policy direction aims to ensure consistency, unlock investment, and give practical effect to the ICT Sector Code in line with national development goals, including transformation.”

Once finalised, the draft policy direction will enable Malatsi 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; and,
• Engage with various departments and the ICT Sector Council to define acceptable EEIP contributions in the ICT space.

It also clarifies that new entrants 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,” the DCDT said.

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 in the ICT Sector Code as valid conditions for applications for individual licences,” the department said.

Stakeholders are invited to submit comments on the draft policy direction within 30 days of the notice’s publication in the Government Gazette, which was on Friday, 23 May 2025.