South Africa’s government is preparing to relax local ownership rules that apply to foreign satellite service providers, with an emphasis on facilitating the entry of innovative companies like Elon Musk’s Starlink. This proposal aims to address the regulatory barriers that have impeded Starlink’s operations in the country, with the Minister of Communications and Digital Technologies, Solly Malatsi, emphasising the need to “encourage investment, including strategic infrastructure investment, and innovation in the communications sector” while promoting competition within the Information and Communications Technology (ICT) space.
The core of the current debate hinges on the Electronic Communications Act, which mandates that 30% of equity ownership in licensed firms must be held by historically disadvantaged groups. However, a recent government gazette has revealed that this requirement may not fully accord with the broader definitions of empowerment found in the Amended B-BBEE ICT Sector Code. To remedy this discrepancy, the policy proposes that the Independent Communications Authority of South Africa (ICASA) must align its regulations with this code, advocating for broad-based black economic empowerment through “equity equivalent investment programmes.”
Malatsi has underlined the necessity of “regulatory certainty and consistency” to bolster the rollout of broadband services and bridge the persistent digital divide that continues to exist across South Africa. The easing of local ownership rules for Starlink may reflect a crucial balancing act between fostering economic empowerment and attracting essential foreign investment, which is vital for modernising the country’s communication infrastructure.
This proposal comes in the wake of behind-the-scenes diplomatic discussions between U.S. and South African officials, particularly in light of rising American apprehensions about the regulatory hurdles faced by U.S. technology firms such as Starlink. Musk has openly challenged South Africa’s Broad-Based Black Economic Empowerment (B-BBEE) laws, suggesting that they unjustly hinder his company’s entry due to perceived racial biases. In a tweet, he controversially claimed that Starlink was denied operational permissions in South Africa because he is white, labelling the laws as exclusionary.
Responding to Musk’s assertions, Clayson Monyela, a senior figure in South Africa’s Department of International Relations and Cooperation, took to social media to clarify the situation. “Sir, that’s NOT true & you know it! It’s got nothing to do with your skin colour. Starlink is welcome to operate in South Africa provided there’s compliance with local laws,” he stated, emphasising that global trade principles were at play in this situation.
The timing of the proposed changes aligns with renewed talks aimed at strengthening bilateral relations between Pretoria and Washington, following South African President Cyril Ramaphosa’s recent visit to the White House. Discussions during this visit covered various contentious issues, including the debate surrounding alleged attacks on white farmers in South Africa.
As detailed in the government gazette that proposes easing local ownership requirements, these adjustments are poised not only to accommodate technological innovators like Musk but also represent a diplomatic overture towards the United States. The outcome of this policy shift could have lasting effects on the way South Africa attracts foreign investment while simultaneously navigating the critical terrain of economic empowerment.