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IOL News
28-05-2025
- Business
- IOL News
Starlink and South Africa: No exceptions in telecom regulation reform
On Tuesday, Minister Solly Malatsi appeared before the Portfolio Committee on Communications and Digital Technologies to justify his directive, which seeks to 'align' the Electronic Communications Act and the ICT Sector Code. Image: Jonathan Raa/NurPhoto/AFP The Association of Comms and Technology (ACT) has welcomed the recent directives from the Minister of Communication, Solly Malatsi regarding the alignment of ICASA's empowerment regulations with the B-BBEE ICT Sector Code. On Tuesday, Malatsi appeared before the Portfolio Committee on Communications and Digital Technologies to justify his directive, which seeks to 'align' the Electronic Communications Act and the ICT Sector Code. "This policy development, coupled with a proposed inquiry into the necessity of I-ECNS licence applications, marks a pivotal moment for South Africa's telecommunications sector, potentially reshaping the landscape of competition and transformation," ACT said in a statement. As the industry stands on the brink of significant regulatory reforms, ACT said it urges that these changes be implemented with transparency, consistency, and equitable enforcement of the law. "If executed properly, this approach could herald a new era for the sector, fostering an environment conducive to both innovation and investment. At the heart of ACT's response is a strong endorsement for the Minister's initiative to have ICASA formally acknowledge Equity Equivalent Investment Programmes (EEIPs)," the Association further said. The organisation is poised to make comprehensive submissions reflecting its commitment to bridging regulatory ambiguities between ICASA's ownership rules and the B-BBEE ICT Sector Code. 'We support efforts that contribute to the resolution of regulatory complexities while promoting South Africa's transformation agenda,' Nomvuyiso Batyi, CEO of ACT said. ACT added that it advocates for innovative, scalable solutions that not only deliver impactful results but also restore policy transparency and bolster investor confidence. "The Association firmly believes that increased competition, particularly in terms of connectivity solutions to underserved communities, is a vital component of this growth. We are particularly supportive of frameworks that ensure all operators, whether terrestrial or satellite, navigate the same regulatory landscape,' Batyi said. "This is essential for fostering a sustainable and competitive digital economy that can adapt to the rapidly evolving technological landscape. We have consistently been on the pulse of this issue. We've supported the rollout of satellite technology in South Africa, within the same rules that everyone else follows,' Batyi added. Meanwhile, the Economic Freedom Fighters (EFF) condemned Malatsi's recent actions aimed at enabling Elon Musk's satellite company to operate in South Africa without adhering to local ownership laws. The party expressed deep concern over what it described as an unlawful attempt to bypass legislation designed to protect local economic interests and transformation. This 'alignment' would allow foreign entities to operate without complying with the 30% local ownership requirement mandated by law for previously disadvantaged groups. Instead, the EFF said Malatsi wants Starlink to use 'Equity Equivalents' under the Broad-Based Black Economic Empowerment (B-BBEE) Act, an approach the EFF describes as an 'anti-transformation participation' strategy. EFF spokesperson Sinawo Tambo said: "In what can only be described as an unlawful attempt at subverting the powers of the Parliament of South Africa by using a Ministerial Policy Directive, Minister Malatsi characterises the amendments he wants to make to two Acts of Parliament as regulatory alignment." Trade union, Congress of South African Trade Unions (Cosatu) said it will be engaging with the relevant Departments for Communications and Digital Technologies as well as Trade, Industry and Competition to seek assurance that any such proposals remain in line with existing legislation, in particular the Broad Based Black Economic Empowerment (BBBEE) Act, as well as the constitutional imperative to advance transformation across all sectors of the economy. The union said it noted the excitement on social media about Starlink. "As a Federation we remain guided by the law and will at all times jealousy guard its supremacy, and our transformation journey as mandated by the electorate and guided by the Constitution. The Federation's primary concerns remain defending and creating badly needed jobs, spurring economic growth, tackling anti-competitive monopolistic practices, advancing socio-economic transformation and affirming the rule of law."
IOL News
28-05-2025
- Business
- IOL News
'We will fight corporate terror': EFF rejects Minister Malatsi's attempt to facilitate Starlink entry
EFF rejects Minister Malatsi's unlawful attempt to bypass South Africa's 30% local ownership law for Elon Musk's Starlink, saying legal compliance and transformation must be upheld to protect jobs, sovereignty, and national security. Image: AP Photo/Francois Mori, The Economic Freedom Fighters (EFF) has condemned Minister Solly Malatsi's recent actions aimed at enabling Elon Musk's Starlink satellite company to operate in South Africa without adhering to local ownership laws. The party expressed deep concern over what it described as an unlawful attempt to bypass legislation designed to protect local economic interests and transformation. On Tuesday, Malatsi appeared before the Portfolio Committee on Communications and Digital Technologies to justify his directive, which seeks to 'align' the Electronic Communications Act and the ICT Sector Code. This 'alignment' would allow foreign entities to operate without complying with the 30% local ownership requirement mandated by law for previously disadvantaged groups. Instead, the EFF said Malatsi wants Starlink to use 'Equity Equivalents' under the Broad-Based Black Economic Empowerment (B-BBEE) Act, an approach the EFF describes as an 'anti-transformation participation' strategy. EFF spokesperson Sinawo Tambo said: "In what can only be described as an unlawful attempt at subverting the powers of the Parliament of South Africa by using a Ministerial Policy Directive, Minister Malatsi characterises the amendments he wants to make to two Acts of Parliament as regulatory alignment." Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. 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Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ When pressed by the EFF, Tambo said the Minister failed to adequately address whether his directive amounts to amending the law. More importantly, Malatsi admitted that the Independent Communications Authority of South Africa (ICASA) advised him that the correct path would be to amend the Electronic Communications Act itself, not circumvent it via policy alignment, he said. "The fact that the regulatory authority is alive to the legislative irregularity of the Minister's attempts means there is certainty that the only lawful mechanism for Starlink to exist in South Africa is through full compliance with our laws, or through a legally sound amendment of legislation. ''No other mechanism, including a Ministerial Directive, can ease conditions for Starlink to operate in our country." Beyond the legal issues, the EFF raised political concerns about allowing Starlink's entry. Elon Musk, who owns Starlink, has previously peddled disinformation about South Africa, expressed disdain for transformation, and proposed to operate without guarantees for local jobs in the telecommunications industry, said the EFF. Tambo noted that the Portfolio Committee echoed this sentiment with a 'resounding call' rejecting Starlink and any attempts to subvert legislation by abusing Executive powers and undermining the will of the people, which resides in Parliament. Tambo said: "The EFF vows, that over and above legislative requirements, we will fight tooth and nail against corporate terror that uses access to diplomatic channels and Presidents to pursue business interests." The EFF further links Starlink's push for entry in South Africa to demands made by Johann Rupert at the Oval Office and warns that Starlink represents a national security threat, a threat to local jobs, and a threat to the country's sovereignty and independence. The party reiterated its firm stance to oppose any introduction of Starlink that does not comply fully with South African law, both inside Parliament and, if necessary, through the courts. ''We Say No To Starlink in South Africa!'' Get your news on the go, click here to join the IOL News WhatsApp channel. IOL Politics
Daily Maverick
26-05-2025
- Business
- Daily Maverick
Malatsi's policy ‘workaround' for Starlink generates more heat than light — a legal fight looms
A legal bunfight between Communications Minister Solly Malatsi and Parliament over Starlink is looming – it's important to unpack the legal issues around the minister's controversial proposed policy direction. In the wake of the disinformation storm-fest that was the Trump/Ramaphosa White House meeting last week, a photo doing the rounds from that event is the pensive, hooded-eye stare of Starlink's head honcho and Trump's seeming point person on all things South African, Elon Musk. Musk's irritation at South Africa's electronic communications legal and regulatory environment is legendary. In March, on his social media platform X, he said that his satellite communications system Starlink was not allowed to operate in South Africa ' because I am not black '. A firestorm has since raged about whether or not South Africa should become another of the currently 18 countries in Africa in which Starlink operates, and what prevents Starlink from doing so already. And on Friday, Solly Malatsi, the minister of communications and digital technologies, published in the Government Gazette a proposed policy direction to the Independent Communications Authority of South Africa (Icasa) '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 (BBBEE) ICT Sector Code'. This was immediately interpreted as a pro-Starlink move, although neither the company nor foreign investors generally are mentioned in the proposed policy direction. The proposed policy direction was met with a binary response on X and in press reports. Many commentators were hostile, with more than one warning that Starlink poses a national security threat to the country. Others were upbeat about the prospects of Starlink being used to provide electronic communications services to the country, particularly in rural areas where fibre and mobile services are few and far between. But as the saying goes, the proposed policy direction 'workaround' for Starlink has generated more heat than light and it is clear that the government is not speaking with one voice on this issue, perhaps unsurprisingly given that Malatsi is a DA Cabinet minister and the GNU's political tensions are legion. On X on Saturday, 24 May 2025, the chairperson of Parliament's Portfolio Committee on Communications and Digital Technologies, Khusela Diko, posted an ' invitation ' to Malatsi to brief the committee on the policy direction on Tuesday, 27 May 2025, which, the invitation states, 'appear to be in contravention of the Electronic Communications Act and in favour of low-Earth orbit satellite provider SpaceX'. The last part of the quote is telling in two respects: First, the committee is, embarrassingly, not on top of its facts, because SpaceX (another Musk company) is not the provider of low-Earth orbit satellite services, Starlink is; and The committee's beef with the proposed policy direction is that it 'appears to be in favour of' the satellite services provider. So it seems that the animus of at least a faction of government towards Starlink is out in the open and this is clearly at odds with Ramaphosa's own wishes, since press reports say it was he who asked Malatsi to find a workaround that would allow Starlink to operate in the country, which resulted in the proposed policy direction published on Friday. Malatsi has said on X that he will honour the invitation. In previous spats between Malatsi and Diko, the minister has come out on top, most notably in his withdrawal of the fatally flawed SABC Bill. Despite her (incorrect) bluster that Malatsi lacked the power to withdraw a Cabinet-approved bill, withdraw it he did, and it remains withdrawn. Icasa can, of course, amend its Ownership Regulations but not in a manner that is contrary to the provisions of its governing statutes, and therein lies the rub. Parliament has seen fit to make specific references to the equity ownership of individual electronic communications licences (the kinds of licences that Starlink will need in order to operate in South Africa) in the Electronic Communications Act, 2005 (the ECA). Originally, section 9(2)(b) of the ECA provided that an invitation to apply for an individual licence 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 higher percentage as may be prescribed'. But that provision was amended in 2014 to now read: '… 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 Icasa Act'. (Italics denote the additions introduced by the 2014 ECA Amendment Act). Section 4(3)(k) of the Icasa Act 2000 provides that Icasa may make regulations on empowerment requirements 'to promote broad-based black economic empowerment'. So the legal bunfight that is likely to play out turns on the words ' or such other conditions ' in section 9(2)(b) of the ECA. So let's unpack the arguments and see where we land. Diko's position seems to be that section 9(2)(b) of the ECA contains a provision that a minimum percentage equity ownership by historically disadvantaged groups of 30% is peremptory. But the minister's argument is that amended section 9(2)(b), by dint of the words ' or other such other conditions ', empowers Icasa to prescribe regulations under section 4(3)(k) of the Icasa Act as an alternative to the minimum 30% equity ownership by persons from historically disadvantaged groups. Certainly, it has long been settled in the eyes of the sector players that one has to have 30% B-BBEE equity to operate an individual licence, and to upend that would be a massive rearrangement of the sector as we know it. But the minister's view is that these words mean Icasa can prescribe conditions to promote B-BBEE other than the 30% equity ownership by persons from historically disadvantaged groups mentioned in the first part of section 9(2)(b) to be included in an invitation to apply for an individual licence, as is evidenced by the use of the word 'or' in relation to 'such other conditions'. The drafting of section 9(2)(b) of the ECA is execrable – as is much of the legislative drafting pertaining to the communications sector, sadly. It seems clear to me (and I daresay most industry participants) that the intention of the legislators was to lock in a 30% minimum equity shareholding for persons from historically disadvantaged groups, as evidenced by the peremptory provision in the last part of section 9(2)(b) of the ECA that Icasa may prescribe only a higher percentage of such equity ownership. It seems clear that Diko is of the view that section 9(2)(b) requires a minimum 30% equity ownership by persons from historically disadvantaged groups to be included in invitations to apply for individual licences. The minister's argument is that the words ' or such other conditions… as may be prescribed under section 4(3)(k) of the Icasa Act ' empower Icasa to prescribe conditions other than the minimum 30% equity ownership by historically disadvantaged persons provided for as an optional requirement in an invitation to apply for individual licences in the first part of the section. Unfortunately, the drafting of clause 2.4 of the minister's proposed policy direction is equally execrable because he says that the use of the word 'or' is 'peremptory'. That is nonsense. The Cambridge Dictionary online defines 'or' as 'a conjunction that connects two or more possibilities or alternatives'. This means that none of the options is peremptory. Given the dictionary definition of 'or' as a conjunction connecting two or more alternatives, I think there is merit in Malatsi's argument that Icasa has the power to prescribe alternative conditions to the 30% equity ownership by persons from historically disadvantaged groups. But it is awkward and seems counterintuitive as Icasa clearly lacks the power to prescribe a lower percentage of equity ownership by persons from historically disadvantaged groups. But the fault, if there is any, is Parliament's because it passed the 2014 ECA Amendment Act and is entirely responsible for the wording which is now in the statute and which seems to, bizarrely, result in: Icasa having no power to prescribe a lower percentage of equity ownership by persons from historically disadvantaged groups; and yet Icasa having the power to prescribe conditions as an alternative to equity ownership by persons from historically disadvantaged groups, altogether. Certainly until 2014, section 9(2)(b) granted Icasa no powers to prescribe an alternative to the then-peremptory requirement of 30% equity ownership by persons from historically disadvantaged groups. It will be very interesting to see what Icasa does here. While it has the discretion to determine whether or not it will act in accordance with a ministerial policy direction, all it is legally required to do is to 'consider' a ministerial policy direction. So, theoretically, even if Icasa agrees with the minister's interpretation of section 9(2)(b) of the ECA, it could still say that it is of the view that supporting broad-based black economic empowerment requires the 30% equity ownership threshold to remain in place for invitations to apply for individual licences. This is an important point of distinction. The minister's proposed policy direction focuses on the public interest issue of, broadly, bridging the digital divide, but Icasa's ability to make regulations on 'such other conditions', as is provided for in section 9(2)(b), is specifically circumscribed by reference to section 4(3)(k) of the Icasa Act which empowers Icasa to make regulations on empowerment requirements 'to promote broad-based black economic empowerment'. Diko has echoed those who say a legal battle is inevitable. I agree this seems likely. The courts will then decide if the 30% equity ownership by persons from historically disadvantaged groups is a peremptory requirement of an invitation to apply for an individual licence, in which case Icasa's Ownership Regulations cannot be amended to provide for equity equivalents; or if Icasa is empowered to prescribe alternatives to equity ownership obligations, in which case Icasa is free to amend its regulations in line with the equity ownership equivalents provided for in the ICT Sector Charter, as it is encouraged to do in the minister's draft policy direction – or to choose not to do so. Whatever the outcome, poor legislative drafting is at the root of this fight, and one can only hope that Parliament takes a long, hard look at the problems this has caused, and resolves to improve. DM
The South African
24-05-2025
- Business
- The South African
Gayton backs Starlink
Another Government of National Unity (GNU) minister – Gayton McKenzie – has backed Elon Musk's Starlink to operate in South Africa, despite the latter's rejection of transformative legislation. The Pretoria-born billionaire has been presented with the possibility of his internet satellite service being granted an operating licence, allegedly 'side-stepping' Black Economic Empowerment (BEE). This comes after Minister of Communications and Digital Technologies Solly Malatsi gazetted a policy direction on 'alternatives' to local shareholding in his department. Musk initially slammed the legislature as a 'racist law'. In a social media post, Gayton McKenzie shared his views on Starlink possibly operating in South Africa. He posted: 'Starlink will give greater and cheaper access in a country with the most expensive data prices. I'm glad that Starlink is coming; we should make it happen faster. I support it wholeheartedly. Internet connectivity is also much cheaper in the rest of the world, but expensive in South Africa'. In the comments section, thousands condemned the outspoken minister for flip-flopping on transformation in South Africa for Elon Musk's Starlink. @mabasotf: 'A whole minister saying we must compromise our laws for a multinational cooperation'. @Thamzin_b: 'I think the point is not about wanting them or not. But they should conform to the laws of the land. If Musk wants to make money here, South Africans must benefit from it too.', @nyebe_official: 'To do business in a country he lies about it – claiming genocide. This is wrong and should be condemned'. @BedworthTimes: 'And in exchange, Elon Musk gets backdoor control over our national comms infrastructure — including military communication. But hey, cheap data, right?' Gayton McKenzie is not the only high-profile politician who supports Starlink. Others include: Meanwhile, former DA member Phumzile van Damme has called for the halting of any plans to grant Starlink an operating licence in South Africa. She posted in an X thread: 'The process currently unfolding is procedurally flawed & unconstitutional' 'Why? Because the ICT Sector Code sets out a specific process for amendment, and it's not by Ministerial directive. The law must be followed. Rule of Law'. Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1 . Subscribe to The South African website's newsletters and follow us on WhatsApp , Facebook , X, and Bluesky for the latest news.
The South African
23-05-2025
- Business
- The South African
Elon Musk's Starlink to SA? Minister reveals 'alternatives' to BEE
Minister of Communications and Digital Technologies Solly Malatsi has fuelled reports that South Africa is one step closer to granting Elon Musk's Starlink an operating licence in the country, and effectively bypassing of Black Economic Empowerment (BEE) legislation. This comes days after President Cyril Ramaphosa led a delegation to the White House to address President Donald Trump, in a meeting also attended by Musk. According to reports, Ramaphosa and Musk also met this week to discuss the possible operation of the internet satellite service in the country. In recent months, Musk has claimed that his company was snubbed over 'racist laws', as he was 'not black'. SpaceX, the holding company, has also called on the Independent Communications Authority of South Africa (ICASA) to rethink local equity legislation as it could potentially deter foreign investments. Just days after SA and the US's bilateral meeting, Minister of Communications and Digital Technologies Solly Malatsi issued a statement on a draft 'policy direction on equity equivalent investment programmes' (EEIPs) in the Information and Communication Technology (ICT) sector. In the statement, the minister revealed that he had gazetted the draft policy direction as a 'mechanism to accelerate broadband access'. Without mentioning Starlink, the minister claimed that the policy would 'attract investment' , specifically to operating licencing. The minister revealed that a 30% local shareholding BEE requirement for foreign investments 'did not allow companies to contribute to transformation goals in ways other than traditional owneership'. As such, Malatsi revealed that the EEIP policy direction would allow qualifying multinationals to engage with the department thought 'alternatives to 30% ownership'. This included investments in : Local suppliers Enterprise and skills development Job creation Infrastructure support Research and innovation, Digital inclusion initiatives, and funding for SMMEs. Malatsi added: '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'. Minister Solly Malatsi added that the draft policy direction would be open to comments for the next 30 days. Once finalised, it would enable him to direct ICASA to 'align' its transformation objectives. Malatsi added that he hoped the policy direction would 'also permit commitments envisaged by the ICT Sector Code as valid conditions for applications for individual licenses'. On social media, many South Africans took the announcement as a sure sign of Starlink in the country. While many were excited about the prospect, others were concerned and angry about Elon Musk sidestepping local ownership laws. Popular entrepreneur Vusi Thembekwayo posted on X: 'Something seems off, or perhaps there's been a lack of thoroughness'. Here's what others had to say: @still_Thato: 'Businesses and multinationals have a history of navigating regulatory frameworks to their advantage. Often at the expense of transformative goals.' @nellaf21: 'This is a betrayal of the South African people.' @WYNNDOWN: 'Y'all will move mountains for everyone but South Africans.' @Nomsa_Siba: 'Bathong, we don't want Starlink!' @floodssky: 'So next time Elon Musk wants something that is against the law, what will he do? A government that bends the law depending on how many damaging treasonous actions they are willing to pursue'. @Tshepang_011: 'The very same Elon Musk who has been spreading misinformation about our country? Come on now. Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1 . Subscribe to The South African website's newsletters and follow us on WhatsApp , Facebook , X, and Bluesky for the latest news.
