Solly Malatsi criticises ICASA’s 30 percent B-BBEE rule as a barrier to investment
Minister of Communications and Digital Technologies Solly Malatsi has argued that ICASA's current 30% Broad-Based Black Economic Empowerment (B-BBEE) ownership requirement is outdated
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Minister of Communications and Digital Technologies Solly Malatsi has argued that ICASA's current 30% Broad-Based Black Economic Empowerment (B-BBEE) ownership requirement is outdated and discourages investment and innovation in the telecommunications sector.
Responding to a parliamentary question from EFF MP Mazwikayise Brian Blose regarding the justification for amending B-BBEE regulations to facilitate the entry of companies like Starlink, Malatsi said ICASA's current regulations, which apply a fixed 30% equity rule, do not reflect this broader scope.
"This creates unnecessary barriers to investment and entry, discourages innovation, and undermines alignment with national transformation policies".
The minister added that the draft policy direction seeks to align ICASA's regulations with the broader Black Economic Empowerment framework introduced in the 2014 amendments to the Electronic Communications Act.
The framework allows for more flexible transformation mechanisms, such as Equity Equivalent Investment Programmes (EEIPs), which support black-owned businesses, skills development, and economic growth, in underserved areas.
"The legal basis rests on the 2014 amendments to the Electronic Communications Act, specifically section 9(2)(b), which included the phrase "or such other conditions," thereby empowering ICASA to consider empowerment mechanisms beyond equity ownership.
"This ensures that regulations can embrace the full scope of transformation measures under the B-BBEE Act and ICT Sector Code".
Malatsi also cited examples of successful EEIPs already in place, including Microsoft’s R1.3 billion programme, Amazon Web Services’ R384 million investment, and J.P. Morgan’s R340 million initiative, all aimed at enterprise development, training, and economic inclusion.
"No exemptions have been granted exclusively to Starlink. The position is that the draft Policy Direction applies generally and encourages ICASA to implement regulations that reflect the full framework of B-BBEE, including EElPs and deemed ownership".
"This is not designed for one operator but to ensure that all potential entrants, including multinational firms, participate meaningfully in transformation".
IOL Business
mthobisi.nozulela@iol.co.za