South Africa's Minister of Communications and Digital Technologies, Solly Malatsi, has issued a policy direction to align telecommunications licensing with broad-based black economic empowerment laws. This move introduces equity equivalent investment programmes for foreign multinationals, allowing contributions to economic inclusion without direct ownership. The policy aims to accelerate broadband access, particularly in underserved areas.
In May 2025, Minister Solly Malatsi published a draft policy direction mandating the Independent Communications Authority of South Africa (Icasa) to harmonize its licensing framework for communications operators with the Broad-Based Black Economic Empowerment Act (BBBEE Act) and the ICT Sector Code. This addresses regulatory gaps from Icasa's 2021 control and ownership regulations, amended in 2022, which emphasized strict equity ownership over broader empowerment measures.
The ICT Sector Code, approved by the Department of Trade, Industry and Competition (DTIC) in 2016, outlines multiple paths for black economic empowerment, including procurement from black-owned small, medium, and micro enterprises (SMMEs), management representation for black individuals, and share offerings. Under Statement 103, equity equivalent investment programmes (EEIPs) enable wholly foreign-owned multinationals to achieve full scorecard points by investing in skills development, enterprise and supplier development, and critical infrastructure, rather than selling equity stakes.
Malatsi defends the policy as a legal tool under the Electronic Communications Act (ECA) and Icasa Act, countering claims of executive overreach. Icasa's narrow focus on ownership, despite over a decade of sector consultations recommending alignment with the ICT Sector Code, has led to high industry costs, investor exclusion, and delays in broadband rollout. The ECA requires Icasa to promote broad-based empowerment, addressing needs of women, youth, and persons with disabilities.
Public consultation yielded over 19,000 submissions, with about 15,000 substantive ones; 90% supported the direction for unlocking high-speed internet in rural areas and ensuring regulatory parity. Opponents, including some fearing foreign operator dominance, were outnumbered. Mobile network operators, via the Association of Communications and Technology, stressed equal obligations for EEIP qualifiers, such as fees and universal service contributions—matters Icasa can enforce.
The gazetted policy promotes regulatory harmonization, enabling multinationals to aid universal connectivity without undermining transformation goals.
