Communications and digital technologies minister Solly Malatsi has defended the proposed policy directive on Equity Equivalent Investment Programmes, stating it is not designed to benefit an individual company.
Speaking in parliament on Tuesday before the portfolio committee on communications and digital technologies, Malatsi said Elon Musk’s Starlink will not be the only company to benefit from the new policy, if it is approved.
The directive, published on Friday under the Electronic Communications Act, seeks to relax the requirement that foreign investors hold at least 30% equity in partnership with historically disadvantaged black South Africans to satisfy BEE requirements.
This is not about introducing a dispensation for any individual, nor any company, or introducing preference.
— Solly Malatsi
The gazetting of the proposed policy change led to critical remarks that the new directives appeared to favour Starlink.
However, Malatsi said the directives align information and communication technology licensing with national transformation laws.
“This is not about introducing a dispensation for any individual, nor any company, or introducing preference. The policy direction members will recall, [is] that we started working on it [in] around September,” he said.
Starlink, the satellite internet service owned by Elon Musk’s SpaceX, has been trying to enter the SA market for years but was opposed to the 30% local ownership requirement.
However, after President Cyril Ramaphosa’s visit to meet the US president, Donald Trump, last week, the department of communications & digital technologies introduced a proposed policy change that would ease BEE requirements for foreign satellite communication providers like Musk’s Starlink.
Malatsi said the directive, grounded in Section 3 of the Electronic Communications Act, allows him to issue policy directives to the Independent Communications Authority of SA (Icasa).
“We are not undermining Icasa,” he said. “We have complied with all legal steps, including giving the authority an opportunity to respond. That process outlines the lawfulness of the intention of the policy directive, because it is prescribed under the Electronic Communications Act.
“It does not mean that the regulator can stop a minister from exploring a policy direction because there are two steps. The first step is the opportunity for the regulator to engage with the draft policy direction. The second step is ... the public comment stage ... we must take into consideration what each and every interested stakeholder or anyone who has views on this policy direction [says],” Malatsi added.
The directive is now available for a 30-day public comment period.
Malatsi said there was no favouritism or conspiracy linked to Starlink.
“We will consider all stakeholder inputs before finalising the policy direction. There is no conspiracy on our part with regard to this policy direction. There is no underhanded effort in the darkness to re-enrol this into the South African parliament. We have at all times communicated the process publicly, and we are comfortable that the stage that we are in now is a legitimate stage.”
He said the idea was not “thumb-sucked”, reiterating that there is a strong need to expand broadband access in SA while ensuring transformation.
“This is a continuation of the efforts from the sixth administration. It had been in the pipeline. In the end, we have to maximise options that can help deal with one of the most fundamental needs in our country, which is around broadband connectivity and expanding it to every corner of this country. And in doing so, we abide by the transformation policies of this country. And that’s the reconciliation that we are seeking,” he said.
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