On May 23, South Africa’s Communications Minister, Solly Malatsi, released a policy amendment to allow multinational corporations to use Equity Equivalent Investment Programmes (EEIPs) as an alternative to the strict Broad-Based Black Economic Empowerment (B-BBEE) ownership. While the update to South Africa’s policy appeared routine, the timing, following President Cyril Ramaphosa’s meeting with President Donald Trump in the U.S, has sparked intense debate and concern among industry experts, local businesses, and the public.
Depending on who you ask, they say the regulatory update looks suspiciously like a diplomatic gift to Elon Musk’s Starlink, but Malatsi insists the changes have been in the works for months.
Traditionally, South Africa’s policy in ICT has been developed through careful consultation, with a strong focus on promoting local ownership, economic transformation, and fair competition. The B-BBEE framework was designed to address historical injustices by ensuring that black South Africans have a meaningful stake in the country’s economy. Any changes to these rules, especially if they appear to benefit foreign interests at the expense of local businesses, raise important questions about the future of economic empowerment and digital sovereignty in South Africa.
TechCabal spoke to Luvo Grey, the president of the National Youth ICT Council, an organisation that represents young people in South Africa’s ICT sector, to unpack the deeper issues behind the amendments. For Grey, “Starlink, or any satellite operator, should be in South Africa only if it plays by the rules.”
Grey noted that if the regulatory changes are meant to make it easier for Starlink to enter the market under more favorable conditions, then it raises an important question of whether South Africa’s digital independence is being protected, or whether the country should cater to the financial interests of a foreign billionaire’s business interests.
This interview has been edited for length and clarity.
ICT regulation amendments came soon after President Ramaphosa met President Trump. What’s your take on this timing?
The timing is highly suspicious. It raises legitimate concerns about whether our national regulatory processes are being influenced by diplomatic pressure or foreign corporate interests. Historically, ICT regulations have been shaped through local consultation, stakeholder engagement, and public participation.
Now, we’re seeing expedited regulatory shifts, including the lifting of the moratorium on individual ECNS licenses and the sudden introduction of an EEIP model tailored for the ICT sector, all conveniently timed after the president’s U.S. engagement. If this was indeed a prelude to facilitating Starlink’s entry on softened terms, then we must question whose interests are truly being prioritised: is it South Africa’s digital sovereignty or the profits of a foreign billionaire?
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Reports say some multinationals like Samsung and AWS operate in South Africa using EEIPs. Can you unpack what that means as opposed to B-BBEE?
B-BBEE is anchored in ownership, control, and genuine transformation. It’s about economic redress through structural inclusion of historically disadvantaged individuals by becoming owners and decision makers in companies operating in South Africa.
An EEIP, or Equity Equivalent Investment Programme, on the other hand, is an exemption model, basically a backdoor clause, primarily intended for multinationals that cannot sell equity due to global ownership structures. They are allowed to contribute a percentage of their turnover into development initiatives instead of equity. Unlike in manufacturing or finance, where EEIPs have long existed, Telecommunications requires 30% ownership by historically disadvantaged groups as per the ECA and ICASA licensing requirements. The sudden attempt to extend EEIPs to ICT now, at the convenience of one foreign company, undermines the very purpose of B-BBEE.
If EEIPs become the norm for multinational entrants, what mechanisms will be in place to audit, evaluate, and enforce corrective action if promised benefits don’t materialise?
That’s exactly the problem. There is no binding regulatory framework specific to ICT that governs, audits, or enforces EEIPs effectively. The BEE Commission has raised concerns before about how loosely EEIPs are monitored. There’s limited public transparency, weak evaluation metrics, and often no recourse when companies fail to deliver on promised impact.
If EEIPs become the norm in ICT, we risk creating a parallel transformation track, one that is symbolic rather than substantive. To avoid this, the government must ensure that any EEIP proposed in this sector is subject to public scrutiny, enforceable by law, aligned to national broadband goals, and explicitly tied to SMME and youth empowerment outcomes. Otherwise, we are simply rebranding non-compliance.
How will these proposed amendments affect the competitive landscape for local ISPs and youth-owned ICT businesses that have worked hard to meet the 30% ownership threshold?
It will devastate them. Local ISPs, especially youth and black-owned, have spent years navigating a complex, underfunded ecosystem, complying with stringent B-BBEE and license requirements. If a foreign company like Starlink can bypass this through a relaxed EEIP with no real ownership inclusion, we will have created a two-tier market: one where locals play by the rules, and another where foreign players dominate without meaningful transformation.
This not only distorts competition but also destroys the very foundation of policy certainty and investor confidence in local enterprises. Why should anyone invest in compliance if the rules can be bent for billionaires?
What precedent would be set legally and politically if Starlink or similar companies are granted licenses under relaxed B-BBEE rules?
The legal precedent would be catastrophic. It would signal that South Africa’s policy transformation is negotiable depending on who you are or how much political sway you carry. Politically, it would erode public trust in the state’s commitment to redress and economic justice. Once one company is allowed in under relaxed rules, others will follow, and we will have effectively gutted the Electronic Communications Act and our transformation charter.
This would not only impact ICT, but it would ripple across sectors, weakening the entire legislative framework of B-BBEE in South Africa. We would be setting a precedent where capital has more power than the Constitution.
What are some of your insights into why Musk refuses to follow the B-BBEE regulation?
Musk is a hard-nosed capitalist. His model is about control, scalability, and vertical integration. He wants to operate globally without being encumbered by local ownership rules, taxes, or community obligations. In markets like China, where regulation is strict, he complies, not because he wants to, but because he must. The fact that he resists doing so here shows that he perceives South Africa’s laws as weak or flexible. That’s the danger, allowing foreign capital to test and exploit regulatory loopholes because they assume will yield under pressure.
Why should Starlink be in South Africa?
Starlink, or any satellite operator, should be in South Africa only if it plays by our rules. We welcome innovation. We support improved connectivity. But innovation without justice is exploitation. Starlink must comply with the ECA, partner with 100% black-owned small, medium and micro enterprises and invest in the development of our local ICT ecosystem, including infrastructure sharing, skills transfer, and community access.
It cannot be that the same people denied access to spectrum and finance for decades are now told to step aside for a foreign monopoly. Starlink must come, but on our terms, not theirs.
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