Understanding the New ICASA BEE Directive

The recent policy directive issued by the Minister of Communications has stirred up confusion across South Africa’s ICT and telecommunications sectors. Many businesses, especially those watching major international entrants like Starlink, have misunderstood this directive as a dilution of South Africa’s Black Economic Empowerment (BEE) ownership requirements.

Let’s be clear: this is not a softening of the B-BBEE codes. It’s a clarification. And if you’re a South African company wondering how this affects you, read on.

What’s Changed: ICASA Aligning with the ICT Sector Code

The Independent Communications Authority of South Africa (ICASA) is responsible for issuing electronic communications licenses; the kind used by major players like Vodacom, MTN, and Starlink. ICASA regulations from 2021 mandated that all licensees hold at least 30% direct Black ownership and Level 4 B-BBEE compliance.

But here’s the problem: those regulations did not recognise Equity Equivalent Investment Programmes (EEIPs) — even though EEIPs are already accepted under the ICT Sector Code and the BEE Act for qualifying multinational companies.

The new directive fixes that misalignment. It doesn’t remove the ownership requirement, it simply instructs ICASA to recognise EEIPs as a valid ownership alternative for multinationals, in line with existing BEE legislation.

What Are Equity Equivalent Investment Programmes?

If your business is headquartered overseas and your global policy prohibits the selling of equity shares, South African BEE legislation offers a pathway: the Equity Equivalent Investment Programme (EEIP).

EEIPs allow multinationals to earn BEE ownership points by investing in transformative initiatives (like rural broadband rollout, enterprise development, or digital skills training) instead of giving away equity. These investments are approved by the DTIC and can provide ownership recognition for a defined period (usually 7–10 years).

But, and this is crucial, EEIPs are only available to multinational firms. South African companies must still meet the 30% direct ownership threshold. No exceptions, no shortcuts.

Why This Matters for South African Companies

This directive doesn’t create new loopholes. It simply aligns ICASA’s licensing rules with national BEE policy. For South African companies, the ownership target hasn’t changed. But the market confusion could muddy your understanding of where you stand, and how others (like multinational competitors or partners) are navigating the same terrain.