Regulation

South African policy change may benefit foreign comms companies

South African policy change may benefit foreign comms companies

South Africa's Electronic Communications Act, which requires foreign-owned communications licensees to sell 30% of equity in their local subsidiaries to historically disadvantaged groups, is to be amended.

Reuters reports that, following a directive from the country’s Telecommunications Minister, Solly Malatsi, there has been a change of emphasis.

Malatsi has explained that what are called ‘equity equivalent’ investment programmes in the sector – for example in digital infrastructure – should count toward empowerment goals.

He has, however, insisted that this apparent change of policy “does not favour any entity, bypass the Electronic Communications Act, or weaken transformation”, instead arguing that it will help attract more investment that could benefit South Africans, especially those in rural and underserved communities who still lack access to high-speed internet.

The policy changes will allow foreign communications companies, including Starlink, whose parent company SpaceX has suggested that Black ownership requirements were a barrier to investment, to sidestep the 30% equity rule and operate in the country.

There has been criticism from opposition political parties and some lawmakers at the rule change, but Reuters suggests that the public response seems, so far. to be broadly supportive.

However, there is a context to this, notably a claim by Starlink founder Elon Musk that his satellite company could not operate in the country because he is not Black – and ongoing criticism by US President Donald Trump of South African affirmative action policies and other regulations he suggests are anti-white.

However, the South African government does not seem to have commented on whether the policy change was in any way due to outside pressure.



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