A new government gazette proposing relaxed Broad-Based Black Economic Empowerment (B-BBEE) requirements for ICT investors has ignited fierce debate, with critics warning it could unfairly benefit foreign players like Elon Musk’s Starlink while disadvantaging local operators.
Communications and Digital Technologies Minister Solly Malatsi has directed regulator ICASA to lower regulatory hurdles for prospective investors, including potentially waiving the mandatory 30% black ownership rule in favour of alternative socioeconomic investments.
Starlink’s Shadow Over the Policy Shift
The timing of the gazette—coming shortly after President Cyril Ramaphosa’s US visit, where he met Elon Musk—has fuelled speculation that the move is aimed at easing Starlink’s entry into South Africa. The satellite internet giant has faced regulatory pushback globally over compliance with local equity laws.
Paul Hjul, Managing Executive at Hjul Consulting, acknowledged the need for low-earth orbit (LEO) satellite providers like Starlink but criticised its aggressive negotiation tactics.
“Starlink seems to adopt the stance of, ‘We are needed, therefore we can do what we want,’” Hjul said. “They’re not the only LEO operator, but they leverage their brand to pressure governments into concessions.”
Ownership vs. Development: A Divisive Trade-Off
The proposed policy would allow new investors to choose between ceding 30% ownership to black partners or funding community development projects. Supporters argue this could boost foreign investment, while critics say it undermines B-BBEE’s original intent and disadvantages existing telecom players like Vodacom and MTN, who have long complied with stricter rules.
Hjul noted that while reforming the Electronic Communications Act (ECA) is overdue, ad hoc exemptions risk setting a dangerous precedent.
“The statute is the statute,” he said, urging Parliament to review the ECA holistically rather than make piecemeal changes driven by short-term interests.
Broader Implications for SA’s Digital Economy
The debate highlights tensions between attracting investment and maintaining “transformation goals”. With South Africa lagging in digital infrastructure, some argue deregulation could accelerate connectivity, while others fear eroding empowerment gains.
As the government weighs feedback, the key question remains: Will this policy unlock growth—or reward corporate pressure at the expense of equity?
