Minister of Communications and Digital Technologies issues proposed policy direction to ICASA on B-BBEE in the ICT Sector

In terms of the proposed policy direction, the Minister intends to give effect to existing national and sectoral policy pertaining to the rollout of broadband and the bridging of the digital divide. In addition, the proposed policy direction is aimed at giving effect to the following objectives set out in the ECA:

1.    the encouragement of investment, including strategic infrastructure investment and innovation in the communications sector;

2.    the promotion of competition in the ICT sector; and

3.    the promotion, facilitation and harmonisation of the achievement of the objects of legislation related to the ECA.

The Minister recognises the need for regulatory certainty and consistency in its application to members of the ICT sector (including licence holders) to achieve the said objectives, as well as the need to harmonise the requirements and provisions of the ECA with other legislation that applies to ownership in the ICT sector. 

Both the ECA and the Regulations in respect of the Limitation of Control and Equity Ownership by Historically Disadvantaged Groups (HDG) and the Application of the ICT Sector Code (the B-BBEE Regulations) provides that applicants for individual licences must have a minimum of 30% ownership equity held by HDGs (section 9(2) of the Act, read with regulations 3(4) and 7). The B-BBEE Regulations also require that existing individual licensees with an annual turnover of R50 million or more must comply with the 30% HDG equity ownership requirement within 36 months of the promulgation of the Regulations. 

The above requirements of the ECA and the B-BBEE Regulations contradict the provisions of section 10 of the B-BBEE Act, which requires all organs of state to apply any relevant codes of good practice issued in terms of the B-BBEE Act, in determining qualification criteria for the issuing of licences and other authorisations in respect of economic activity in terms of any law. The B-BBEE Act also provides that an enterprise in a sector may only be measured for compliance with the requirements of B-BBEE in accordance with such code.  In the ICT sector, the relevant code is the Amended Broad-Based Black Economic Empowerment ICT Sector Code (the B-BBEE ICT Sector Code), which provides for the recognition of various other B-BBEE ownership measurement principles and mechanisms, in addition to direct equity ownership by HDGs. 

With the proposed policy direction, the Minister seeks to clarify the recognition of equity equivalent investment programmes as mechanisms through which multinational corporations, who may be constrained in their ability to comply with equity ownership requirements, can participate in South Africa’s socio-economic development. Accordingly, the Minister proposes to call on ICASA to urgently consider the alignment of the B-BBEE Regulations with the B-BBEE ICT Sector Code.

All interested persons are invited submit written comments on the proposed policy direction with 30 working days of the date of the notice, i.e. by 7 July 2025.