South Africa’s government has taken a major step toward reshaping its digital economy by unveiling a draft policy that aims to modernise long-standing licensing regulations in the information and communications technology (ICT) sector. Announced by Minister of Communications and Digital Technologies, Solly Malatsi, the policy introduces a new framework designed to encourage investment from multinational technology companies. This strategic move addresses barriers that have previously limited foreign participation in South Africa’s digital market, including from global satellite internet provider Starlink.
Easing Local Ownership Restrictions through EEIPs
At the heart of the new policy is the introduction of equity equivalent investment programmes (EEIPs), which serve as an alternative to the country’s current 30% local ownership requirement for ICT licensing. The existing rule, aimed at promoting Broad-Based Black Economic Empowerment (B-BBEE), has deterred several international companies unwilling or unable to cede equity to local entities. Under the proposed EEIPs, companies can instead contribute to South Africa’s digital transformation by funding projects such as local enterprise development, digital inclusion initiatives, and infrastructure improvements.
A Potential Breakthrough for Starlink’s Entry
The revised policy could clear a path for Starlink, the satellite internet arm of Elon Musk’s SpaceX, to finally enter the South African market. Starlink has previously cited regulatory challenges—specifically the local equity mandate—as a primary obstacle to operating in the country. With EEIPs offering a non-equity route to compliance, companies like Starlink may now have a viable mechanism to gain licensing approval through direct investment in national digital goals.
Minister Emphasises Importance of Connectivity
In his statement, Minister Malatsi underscored the transformative power of digital access, noting that internet connectivity plays a vital role in education, employment, entrepreneurship, and government service delivery. He described the new policy as a vehicle to “unlock a world of opportunity” for South Africans by accelerating the rollout of digital infrastructure and enhancing access for underserved communities. Malatsi also framed the policy as a balancing act between maintaining empowerment goals and fostering technological advancement through foreign partnerships.
Policy Still in Draft Phase and Open for Public Input
The ICT policy, published as a draft in the Government Gazette, is now subject to a 30-day public comment period during which stakeholders can submit feedback. Once the consultation phase concludes, the Minister will have the authority to instruct the Independent Communications Authority of South Africa (ICASA) to align licensing regulations with the revised approach. This ensures that regulatory implementation remains grounded in both stakeholder input and governmental oversight.
Implications for the Broader Tech Ecosystem
While Starlink may be the highest-profile beneficiary, the policy shift is expected to have far-reaching effects across South Africa’s tech sector. By lowering the entry barriers for global firms, the EEIP mechanism could stimulate increased investment, innovation, and competition, ultimately benefiting consumers through improved service availability and pricing. The policy also aligns with broader economic objectives, such as job creation, digital literacy, and small business development.
South Africa’s new ICT policy represents a thoughtful recalibration of empowerment and investment strategies in a rapidly evolving global tech landscape. By offering a flexible compliance model through EEIPs, the government is signaling its openness to foreign participation without compromising its commitment to economic inclusion. As public feedback is gathered and the policy advances toward implementation, its success may well depend on how effectively it bridges the gap between national development priorities and international business realities.