Makhubele shoots down Starlink as ‘frivolous’ while Malatsi champions space for competition

Minister of Communications and Digital Technologies Solly Malatsi sat with measured composure as members of the portfolio committee on Communications grilled his “Starlink” proposal.

Malatsi had been accused in recent days of gazetting a new regulation on procurement efficiency as a way to pave the way for international investors to circumvent the country’s transformation objectives.

uMkhonto we Sizwe (MK) party vowed to make Malatsi’s appearance before the committee a difficult one, with many other committee members following their cue.

Communications competition

Malatsi and department officials gave a presentation on Tuesday on how the proposed regulation was formulated, stating that one of the main objectives was to create an environment where competition could thrive.  

“It is the lack of competition in the market that appears to be the greatest impediment to lower prices for consumers,” the report stated.

MK party member Colleen Makhubele disagreed with the assertion, using figures provided in the department’s presentation.

The department stated that there were 490 active individual electronic communications network services licences and roughly 2 200 class electronic communications network services licences in existence in South Africa.  

“I think your reason for competition is flimsy, it’s frivolous. It should have not even have been raised in this platform,” said Makhubele.

“What you should be doing is to ensure these 490 are empowered enough to create good competition for the dominant [companies],” she added.

Policy directive for Icasa

Regulation 17.8 was gazetted on 23 May, sparking the theory that Malatsi’s decision had been the result of discussions between officials from South Africa and the US that week.

The department’s presentation showed that the Competition Commission issued a Data Services Market Inquiry (DSMI) report on 2 December 2019.

“Amongst others, the DSMI report observed that high prices may also be caused by hindrances to effective competition, regardless of the cost level,’ the presentation stated.

The report advised that a policy directive should be formulated and issued to the Independent Communications Authority of South Africa (Icasa), with the proposed regulation being the result.

Malatsi said that since being appointed minister, the department set a timeline for the policy directive process to be finalised by mid-June.

“We are now in May, and we have gazetted the regulation in the third week of May. It is the following of a due process that has been taking place for some time,” said Malatsi.

“Whenever any new leader assumes responsibility, you start with the landscape. You identify where you think there are areas that require that clarity, intervention or review,” he explained.

No digital inclusion

Makhubele was in passionate opposition to that position, declaring that the process was not transparent and was devoid of detailed stakeholder engagement.

She called the failure to provide digital services to the rural areas a ‘disgrace’, stressing that there had been no digital inclusion, no growth and no universal access to digital services.

On deadlines, Makhubele said the department had failed to meet every deadline set for digital migration, including the 31 March 2025 deadline set by Malatsi himself.

The EFF followed Makhubele’s cue, stating that it would pursue every legal avenue available to stop the proposal and said it would not “allow policy to be rewritten in Washington.”

Committee members accused the US of “demonising” South Africa, and the EFF suggested that allowing a relaxation of the 30% equity share would be tantamount to “allowing them to operate in this country for free”.

Alignment

Malatsi accused his detractors of “audience exhibitioning” and was adamant that he was not bullied or pressured into signing the gazette.

“And I underscore that point, because the events that predate this week are important to take into consideration if we are going to deal fairly and substantively with the issue at play,” said the minister.

“My duty is to ensure the alignment between the codes, the regulations and fulfilment of all our national laws,” he added.

Law firm Webber Wentzel explained that telecommunications and media licensees must apply one set of criteria on how they measure their transformation requirements.

The firm clarified that Icasa regulations require individual licensees to have at least 30% historically disadvantaged ownership, while class licensees need to be Level 4 B-BBEE compliant, but without a minimum equity ownership percentage.

“Alignment between the Icasa rules and the B-BBEE framework would allow licensees to measure the extent to which Black people have an ownership interest based on a single set of rules.,” Webber Wentzel stated.

The gazette is currently in the 30-day window for public comment phase, and Malatsi vowed to consider all submissions.

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