Communications and digital technologies minister Solly Malatsi. (Image source: GCIS)
The policy directive on the role of equity equivalent investment programmes (EEIPs) in issuing telecommunications licences is still under review by the authority.
So says communications and digital technologies minister Solly Malatsi, speaking on 702’s The Clement Manyathela Show this week.
The minister discussed various matters pertaining to his department, including efforts to align the Independent Communications Authority of South Africa’s (ICASA’s) regulations on ownership requirements for telecommunications service providers.
Malatsi in December gazetted his final policy directive recognising EEIPs, directing ICASA to use these as an alternative to the Electronic Communications Act’s requirement that telecoms network service providers be 30% owned by historically-disadvantaged groups before they can get a licence.
The minister told show host Manyathela that he is empowered to issue policy directives that are consistent with national laws and that ICASA must consider those.
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“The policy directive I issued was very simple in that it sought to ask ICASA to consider aligning its regulations on ownership and the issuance of telecommunications licences with the broader empowerment laws of the country, because those including the ICT sector codes enable the provision for equity equivalent investment programmes to take place,” he stated.
“The law is not prescriptive on two things: how long ICASA may take in their consideration of the policy directive, and I can’t impose a deadline on them. The process, as it is now, is currently under consideration at the ICASA level. The last I heard from ICASA was that they are awaiting their internal team, who are doing a consideration of that policy directive, to inform what their next steps are.”
South African-born billionaire Elon Musk has been eyeing bringinghis Starlink low-Earth orbit (LEO) satellite service to his home country for some time now, criticising the regulatory and ownership requirements to make the service available locally. Starlink is operational in several neighbouring African countries.
Local law requires that telecoms operators meet ownership and empowerment conditions, including a minimum 30% stake held by historically-disadvantaged South Africans, which Starlink has not yet complied with.
Instead of selling a proportion of the entity to black-owned entities, Musk has lobbied for EEIPs as an alternative.
EEIPs are a mechanism through which international companies can secure empowerment status without a sale of equity. Among ICT multinationals that have implemented programmes under EEIPs in terms of the ICT Sector Code are HP, Microsoft, IBM, Dell Technologies, Samsung and Amazon Web Services.
Implementing EEIPs in telecoms would enable multinational companies that can’t sell equity to become empowered and be awarded telecoms licences. Malatsi’s directive was broadly seen to be pro-Starlink, as it would pave the way for the company to enter the country.
The minister has on several occasions refuted this, indicating it is not about Starlink or company X. He noted there is a lack of uniformity within the ICT sector, in terms of the application of the empowerment laws that are recognised and applicable.
“At conferences, I meet different potential satellite providers who want a pathway to invest in South Africa. The reality is they are aware that for multinationals to invest in South Africa, there are two pathways. There’s the 30% local equity sale, or the equity equivalent investment programmes that can be done.
“The reality is that Starlink is not the only satellite provider. Amazon have got an LEO solution, and the Chinese have got several. In the engagement that we’ve made also, they’ve expressed an appetite to say that if this provision was available, they’d be more than happy to enter South Africa. There are also considerations of their own dispensation of policies they have to grapple with.”
The conversation on 702 also touched on the political polarisation caused by Musk’s comments and the focus on individual politics rather than the law.
Malatsi was asked if he’s not concerned about Musk, given his history to use his platform X (formerly Twitter) to spread disinformation about South Africa.
The question is what more can he do in the telecommunications infrastructure space, the host stated.
The minister responded: “The most important part is that South Africa’s capacity to enforce and uphold our laws is intact, whether it’s the cyber security laws or interventions about fighting misinformation and disinformation.
“The other thing that also comforts me is the fact that whenever a licence is issued, it is not issued without its own conditions to be always upheld. A deviation or any violation of those conditions under which a telecommunications licence was issued has penalties linked to it that can be invoked at any time. And that’s where the role of the regulator becomes very important and our law enforcement agencies become very instrumental.
“I don’t think we live in a risk-free world, whether it is with satellite solutions or any other solution. The most important thing is that we have law enforcement capacity and the intelligence capacity to respond appropriately should such violations occur.”
Malatsi added that more than stringent measures is the need to be constantly vigilant. “Living in the type of world that we’re living in, there will always be opportunistic and nefarious elements that will try to use their influence in different ways, either through their commercial vehicles, or through their proximity to power to advance certain interests.
“I don’t think I could say that our capacity from enforcement and regulations are a panacea to unforeseen risk, because technology is evolving all the time. We have a responsibility to capacitate ourselves to be able to respond quickly to risks, if they emerge. Should they emerge, it’s a matter of how quickly we mitigate those from causing damage.”
