Daniel Pucharto | April 10, 2025
Xcella Dico, chairman of the Parliament's Portfolio Committee on Communications and Digital Technology, expressed his dissatisfaction with Minister Soly Malatzi's efforts to introduce the Equity Equivalent Investment Program (EEIPS) in the telecommunications sector.
In a statement posted on Twitter/X, Diko said Malatsi was launching an attack on South Africa's transformation law by attempting to bypass the electronic communications law in favour of the business's interests.
“Minister Maratz should know that when it comes to transformation of the ICT sector, the law is clear about compliance and cutting corners and rotations is not an option.
“His proposed directives and regulations appear to be an attempt to undermine stealth empowerment laws, and if this turns out to be true, they will vehemently oppose it.”
Dico refers to Maratz's recent plan to introduce policy instructions to promote competition through international investment in the telecommunications sector in South Africa.
These policy directives, taking the form of EEIP, overcome regulatory hurdles for telecommunications businesses entering South Africa. This requires 30% of Black ownership.
The equity equivalent programme includes foreign companies investing in local infrastructure, skill development and enterprise support, thus actively contributing to South Africa's economic empowerment goals.
MyBroadband learned in November 2024 that Malatsi was in discussion with ICASA to encourage the creation of EEIPs for Multinational News.
Malatsi responded to Diko in a statement claiming that EEIP is permitted by South African law and is “a source of large investment in our economy, including sectors such as the automotive industry.”
“Recognizing their potential, the government's medium-term budget plan, officially approved by the Cabinet, adopted the introduction of EEIP in the Information and Communications Technology sector,” he added.
Diko also argues that Malatsi's fixation against EEIP is to specifically encourage Starlink to enter South Africa.
Owned by Elon Musk, Starlink uses low Earth Orbit (LEO) satellite technology to provide internet connectivity even in the remotest locations. So far, the service has been available in 19 countries in Africa.
“If he is unhappy with the 30% equity ownership rules, he must ask for an amendment to the law. He must explain why he wants to do that for a single company,” Dico told SABC.
“The problem lies in the fact that they appear to be particularly obsessed with Starlink. This is an issue raised in the Portfolio Committee.”
A spokesman for Malatsi recently said Starlink's entrance to South Africa will help raise competition and lower data prices.
The SpaceX-owned company was originally scheduled to launch in February 2021, but these plans were immediately on ice when ICASA ownership regulations were announced a month later.
SpaceX never confirmed that the regulatory change had put a halt on South Africa's plans, but a well-placed industry source said it was the reason Starlink took the country away.
President Cyril Ramaphosa met with Elon Musk last September to discuss investment in South Africa a month after Starlink was announced to be in talks with the South African government.
SpaceX then proposed to ICASA that during public consultations on new regulations on satellite broadband systems, it should consider implementing equity equivalent programs similar to other industries.
This confirms that SpaceX considers local ownership requirements to be a failure to launch Starlink in South Africa.
Dico claimed that several companies in China, Russia and Europe have expressed interest in South Africa and are inquiring about bringing satellite connectivity to the country.
She also said Starlink recently concluded an agreement in India that requires the company to form a local partnership with two dominant service providers.
“The point is that we can't have one company that ransomed us to demand that we reverse our transformation goals that we know are very important in this country,” she said.
Despite their continued differences of opinion, Dico says he has “a very productive, friendly, and a cooperative relationship with the Minister.”
“Disclaimer – the views and opinions expressed in this article are the views of the author and are not necessarily those of the Bee Room.”
