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South Africa’s communications regulator, Icasa, has dealt a significant blow to Communications Minister Solly Malatsi’s flagship transformation policy, stating that key elements of his December 2025 directive cannot be implemented without amending the Electronic Communications Act (ECA).
In a terse statement released on Wednesday, Icasa confirmed it has formally communicated to the ministry that while it remains committed to sector transformation, its hands are tied under current legislation. The regulator acknowledged that the amended ICT sector code must apply to licensing criteria, but drew a hard line on equity equivalent investment programmes (EEIPs).
“ICASA is enjoined to advance the historically-disadvantaged groups as guided by the Electronic Communications Act (ECA), which requires a minimum 30% ownership by historically disadvantaged groups for individual licence-holders,” it states.
“In considering the policy direction, ICASA notes that while the amended ICT Sector Code must be applied in licensing qualification criteria, full alignment with all provisions of the code, including EEIPs, would require a legislative amendment to the current ECA.”
The statement represents direct regulatory pushback against the central mechanism of Malatsi’s reform: recognising EEIPs as an alternative to the existing 30% historically disadvantaged ownership requirement for individual licence holders.
The policy direction, gazetted in December 2025, was widely seen as a pathway to licensing for Elon Musk’s Starlink, which has refused to cede 30% equity. Instead, SpaceX prefers EEIPs, an alternative empowerment mechanisms involving investment in skills or supplier development, already lawful under the B-BBEE Act.
Malatsi has been publicly frustrated by Icasa’s four-month silence on the issue, demanding an explanation as recently as April. The recent statement is the regulator’s first formal public response.
The timing is notable. Just a day earlier, Malatsi told parliament in his budget vote speech that government would “pursue legislative amendments” to enable EEIPs in telecoms. Icasa’s statement now confirms that such amendments are a prerequisite, not an option.
The political fallout is immediate. Malatsi’s reform has drawn sharp criticism from the ANC, EFF, and MK Party, with accusations that he tailored policy for a single foreign company. The presidency defended the move late last year, and industry bodies like the Internet Service Providers’ Association broadly supported it.
With the Electronic Communications Amendment Bill now the critical instrument for any real change, Starlink’s entry into South Africa, already stalled for years, faces yet another delay.
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