In May 2025, I published a draft policy direction that required South Africa’s broadcasting authority, Icasa, to align the licensing framework for, among others, communications operators, with the national economic empowerment legislation.
This move aims to address the regulatory inconsistencies resulting from the limitation on control and ownership regulations that Icasa adopted in 2021 and then amended in 2022. These regulations refer to the Broad-Based Black Economic Empowerment Act (the BBBEE Act) and the ICT Sector Code, but only certain provisions from these two legal texts have been adopted by Icasa.
Icasa has preferred strict equity ownership as a measure of broad-based black economic empowerment. Different sectors of the economy (like agriculture, finance, mining, telecommunications and broadcasting) have their respective sector codes that set out how each sector will comply with the BBBEE Act.
For context, the ICT Sector Code was approved by the Department of Trade, Industry and Competition (DTIC) in 2016. The ICT Sector Code provides for the empowerment of black people in different ways, including procuring services and goods from SMMEs or black-owned businesses, ensuring black people are properly represented in the management of companies, and offering shares to black people so that they can own a part of businesses in different sectors of the economy.
Under Statement 103 of the ICT Sector Code, the DTIC has made provision for equity equivalent investment programmes, or EEIPs. These alternative ownership mechanisms are specifically designed for wholly foreign-owned multinationals, enabling them to contribute to broad economic inclusion in ways other than ownership.
The logic is simple: instead of selling equity stakes, companies can earn full ownership scorecard points by investing in initiatives that benefit black South Africans, such as skills development programmes, enterprise and supplier development, and critical infrastructure investments.
I did not invent this mechanism. It is a long-standing regulatory tool that has been used by previous administrations through the DTIC.
Legal and regulatory framework
When I published the policy direction for public comment, my opponents wrongfully claimed that this was a case of “executive over-reach”. Nothing could be further from the truth. Both the Electronic Communications Act (ECA) and the Icasa Act clearly set out the powers of the minister of communications and digital technologies and of Icasa, as the sector regulatory authority.
Policy directions are legal instruments provided for in the ECA that the minister can use to ensure that national and sectoral goals are achieved. The ECA specifically empowers me as the minister to issue policy directions to Icasa. Such a policy direction requests Icasa to implement a national policy or part of a policy, or to take a specific action.
It is worth recalling that Icasa consulted with the ICT sector over more than 10 years about how the industry wanted to give effect to the BBBEE Act. Repeatedly, numerous stakeholders recommended aligning the position with the ICT Sector Code in terms of national legislation. However, after considering the responses, Icasa decided to adopt only one aspect of the ICT Sector Code: ownership.
This is despite the fact that the ECA obliges Icasa to “promote broad-based black economic empowerment, with particular attention to the needs of women, opportunities for youth and challenges for persons with disabilities”.
As a result, the limitation of control and ownership regulations published by Icasa in 2021 and amended in 2022 are out of step with the ICT Sector Code and have the more significant consequence of failing to conform to the laws that govern Icasa.
This creates disparities in how licensees’ transformation efforts are measured by different government entities.
However, Icasa may not pick and choose which provisions of national law it will and will not adhere to. The legal arguments put forward by Icasa in support of its decision have resulted in enormous costs to the industry, the exclusion of potential investors in the sector, and limitations on what licensees can do in relation to creating employment and supporting SMMEs, while creating management positions, in turn, that are probably impeding the provision of national broadband services and efforts to connect the unconnected.
This is because acknowledging transformation only as ownership has meant there is no recognition at all of the many other ways that the ICT Sector Code envisages achieving broad-based black economic empowerment.
It is important to reassure South Africans that, contrary to the views of those who have positioned themselves as opponents of the policy direction, this does not favour a particular company, bypass the ECA or weaken transformation. It only calls for the equitable application of national law by Icasa.
Public consultation
The Department of Communications and Digital Technologies received in excess of 19,000 submissions, which, when they were reviewed, included approximately 4,000 duplicates and blank submissions, bringing the total number of substantive submissions to 15,000.
An overwhelming 90% of the submissions are in favour of the policy direction. The sentiment of those in support of the policy direction highlighted the impact it will have in unlocking and accelerating universal access to high-speed internet, particularly in rural and underserved communities and called for regulatory parity.
The minority who opposed it raised concerns about possible dominance by large or foreign telecommunications operators.
The mobile network operators, through their individual submissions and a collective submission by their representative body, the Association of Communications and Technology, expressed the need to hold licensees which qualify for EEIPs to the same regulatory standards and licence obligations as all other licensees. This would include payment of fees, contributions to the Universal Service and Access Fund, fulfilment of universal service and social obligations, adherence to Icasa regulations, and compliance reporting.
These matters are all within Icasa’s control in considering individual licence applications and monitoring licensees. The policy direction merely changes who qualifies for a licence; it does not impact the compliance requirements.
At its core, the final gazetted policy direction is anchored in regulatory harmonisation and in recognising the role multinational operators can play in achieving our goal of universal connectivity.
I will not be distracted by the noise of those with vested interests. I will continue to follow all legal pathways to deliver fair broadband connectivity for millions of South Africans who need it. DM
Solly Malatsi is the minister of communications and digital technologies.