Starlink South Africa has hit another legal wall, after Icasa publicly confirmed that it cannot fully implement Communications Minister Solly Malatsi’s December 2025 policy direction on empowerment without a change to the Electronic Communications Act (ECA). The regulator’s position is a major development in a debate that has dragged on for months and now places the spotlight squarely on Parliament, where any meaningful shift in telecoms ownership rules will have to be made.
In a short statement released on Wednesday, the communications regulator said it had already put its view to the ministry and remained committed to transformation in the sector. But it drew a hard line under what can be done under the current law, making it clear that the policy direction alone is not enough to unlock the change Malatsi wants.
According to Icasa, the amended ICT sector code can be used when setting licensing qualification criteria. However, it said full compliance with the code’s broader provisions — including equity equivalent investment programmes, or EEIPs — would require a legislative amendment to the current ECA.
That is an important distinction, and one that goes to the heart of the dispute. Malatsi’s reform was designed to give telecoms companies an alternative route to empowerment compliance, instead of forcing them to meet the existing 30% historically disadvantaged ownership requirement for individual licence holders. Icasa’s response suggests that the minister’s policy direction can go only so far without new law.
The statement effectively amounts to regulatory resistance to the central mechanism of the minister’s plan. It does not reject transformation, but it does say the regulator cannot stretch the current law to fit the policy direction in the way Malatsi appears to want. In practical terms, that means the path to licence approvals remains uncertain.
Malatsi had already flagged the broader plan in parliament a day earlier, saying government would “pursue legislative amendments that will enable equity equivalent investment programmes to complement ownership requirements in telecommunications.” That comment now looks like a recognition that the policy direction itself may not be enough to force through the changes he wants.
The issue has been closely tied to Starlink South Africa, the satellite broadband service owned by Elon Musk’s SpaceX. The company has been unable to secure a South African licence because it has not agreed to sell the required 30% equity stake to historically disadvantaged groups, as the ECA currently demands. If the framework changes, Starlink would be among the biggest immediate beneficiaries, although other foreign operators would also gain from the same rule shift.
Starlink South Africa and the EEIP fight
Malatsi first moved on the issue in October 2024, arguing that the existing ownership threshold was discouraging foreign direct investment in the telecommunications sector. His argument was that a more flexible empowerment model could still advance transformation while making South Africa more attractive to global investors.
That is where EEIPs come in. These arrangements are already lawful under the B-BBEE Act and are administered by the department of trade, industry & competition. Rather than requiring a foreign company to give up equity, the model allows investment into other forms of empowerment, including skills development, supplier support, enterprise development and related programmes.
The minister published a draft policy direction in May 2025, just two days after President Cyril Ramaphosa led a delegation to the White House, where Starlink’s unresolved licensing status in South Africa was discussed with US President Donald Trump. That timing added fuel to accusations that the reform was being shaped to suit one company.
Critics, including ANC MP Khusela Diko, who chairs Parliament’s communications portfolio committee, said the draft looked like it had been tailored to assist a foreign-owned business rather than serve the broader public interest. But the proposal also drew notable industry support, with the Internet Service Providers’ Association among those backing the direction.
There was, however, caution from parts of the sector. The Association of Comms & Technology supported the overall principle but warned that the implementation would need to be handled carefully. That concern now looks well-founded, given Icasa’s formal position on the limits of its authority.
After seven months of consultation, Malatsi issued the final policy direction on 12 December 2025, instructing Icasa to “urgently consider alignment” of its ownership regulations with the ICT sector code, including full recognition of EEIPs. At the time, it was seen as a decisive attempt to break the deadlock. Icasa’s response shows just how contested that interpretation remains.
The policy direction immediately triggered political backlash from the ANC, EFF and MK Party, all of which opposed the move. Yet the presidency defended it in the days that followed, while the telecoms industry broadly welcomed it as a more investment-friendly approach. Even so, the regulator’s long silence after the direction was issued created growing frustration within the ministry.
Malatsi eventually pushed back in April, demanding that Icasa explain what he described as the “lack of sufficient detail” in its current position. Wednesday’s statement is therefore the first formal public response from the regulator, and it is a careful but unmistakable warning that the minister’s strategy cannot simply be imposed from above.
The timing matters too. On Tuesday, Malatsi confirmed that the Electronic Communications Amendment Bill would be advanced as part of an effort to modernise the licensing framework. That bill now appears to be the key legislative vehicle for any real shift in ownership rules. Without it, Icasa is signalling that the existing law still stands.
For South Africa’s telecoms sector, that means the wait continues. For Starlink South Africa, the latest development is another reminder that the issue is no longer just about technology or market access, but about the legal architecture of empowerment itself. As we reported earlier, the debate has become one of the most politically charged in the sector, and Icasa’s intervention makes clear that the final word will not come from a policy direction alone.
For now, the message from the regulator is simple: transformation remains the goal, but the route to getting there may have to run through Parliament before it can run through the licensing process.