Bending BEE rule in ICT

This is likely a result of SA president meeting with Elon Musk recently.

- Paul Janisch

A hard-and-fast rule that must be adhered to when applying for an Electronic Communications Network Services (ECNS) licence through the Independent Communications Authority of South Africa (Icasa) is that 30% of the shareholding must be held by historically disadvantaged groups.

The simplest definition of historically disadvantaged is a black person. Black is broadly defined as an African, coloured or Indian person born in SA with at least one South African-born parent.

This requirement has been part of SA telecommunications policy for at least two decades - but many multinationals are reluctant to extend their shareholding to any minority shareholder, specifically in the information communications technology (ICT) sector.

To address these concerns, the department of trade, industry and competition provided an alternative to actual local ownership. This is known as an equity equivalent project and is only open to multinationals.