Sakeliga challenges ICASA’s racial quota for communications service providers

Sakeliga has applied to the Pretoria High Court to stop the Independent Communications Authority of South Africa (ICASA) from imposing a racial ownership quota on internet service providers and other communications operators.

ICASA’s position is that no business may obtain, renew or transfer a licence to provide internet access, broadcasting services like television and radio, or operate network infrastructure unless at least 30% of its shares are held by black people or those from groups otherwise designated as historically disadvantaged. Any business – both foreign and domestic – that does not meet the quota is denied a license and precluded from offering internet access and other services, employment, and contributing to productivity and growth.

The requirement notoriously prevents direct local operation by multinational companies whose global corporate structures do not permit equity sales in South African subsidiaries. It also excludes domestic businesses from operating if they do not meet the racial shareholding threshold.

Sakeliga contends that ICASA has no lawful basis for this quota and that the race of a business’s shareholders is not a valid precondition for providing internet and other communications services.

While our envisaged court order would not strike down ICASA’s race-restrictive requirements and penalisation altogether, it would compel the state to offer options for so-called equity-equivalent alternatives. In so doing, the state would replace a racial quota with a racial handicap, which – while remaining objectionable – constitutes an improvement over the current quota system. If successful, the court application would allow companies, deemed by the regulator as too white and not black enough, to obtain licences instead of facing total exclusion – albeit by paying steep additional costs compared to companies that the state considers as having enough black shareholders.

ICASA's refusal to act on the Minister’s policy direction

In December 2025, the Minister of Communications and Digital Technologies issued a Policy Direction under section 3(2) of the Electronic Communications Act (ECA), directing ICASA to urgently consider aligning its ownership regulations with the ICT Sector Code and, as far as possible, to promote the roll-out of broadband to bridge the digital divide.

On 13 May 2026, ICASA announced that the ECA "requires a minimum 30% ownership by historically disadvantaged groups for individual licence holders" and that full alignment with the ICT Sector Code "would require a legislative amendment to the current ECA". ICASA thereby concluded that it cannot depart from the 30% requirement unless Parliament amends the Act.

No lawful requirement for rigid quotas

Section 9(2)(b) of the ECA requires ICASA’s licensing conditions to include the percentage of equity ownership to be held by persons deemed to be from historically disadvantaged groups, "which must not be less than 30%, or such other conditions or higher percentage as may be prescribed".

Sakeliga contends that the words "or such other conditions" give ICASA a choice, and that ICASA's interpretation renders those words meaningless. On ICASA's reading, the 30% requirement becomes a rigid quota that applies to every applicant for an individual licence, implying that every application for an individual licence or licence transfer must meet the rigid quota or fail.

What Sakeliga asks the court

1. That ICASA’s decision of 13 May 2026 be reviewed, set aside and declared inconsistent with the Constitution and invalid.
2. A declaration that section 9(2)(b), properly interpreted, does not impose the fixed minimum of 30% equity ownership by persons deemed to be from historically disadvantaged groups as a precondition for the grant, renewal or transfer of an individual licence, and permits ICASA to prescribe other conditions.
3. In the alternative, should the court find ICASA’s interpretation correct, a declaration that section 9(2)(b) is unconstitutional and invalid to that extent, because it imposes an irrational and arbitrary quota.

The application is brought against ICASA and its Chairperson. The Minister is cited as the executive member responsible for the ECA.

Resources

• Notice of motion and founding affidavit