South Africa Opens Door to Starlink with Draft Policy Shift on Black Ownership Rule
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By Quidah Admin
South Africa is considering a pivotal change in its communications policy that could pave the way for Elon Musk’s satellite internet venture, Starlink, to operate in the country. The move could unlock major investment and accelerate digital infrastructure growth, particularly in remote and underserved regions.
The current legislation, set under the Electronic Communications Act, requires foreign-owned telecom licensees to sell a 30% stake in their South African subsidiaries to historically disadvantaged groups—a cornerstone of the country’s Black Economic Empowerment (BEE) efforts. This ownership condition has deterred several international communications firms, including Starlink, from applying for operating licences. Starlink, owned by Musk’s SpaceX, has cited this as a significant barrier to entry.
To address the impasse, Communications Minister Solly Malatsi has introduced a draft policy proposing alternative compliance mechanisms. Instead of equity transfer, foreign companies could meet transformation targets through what are known as "equity equivalent" investment programmes. These would involve commitments to local job creation, supplier development, and support for small businesses, particularly those owned by Black South Africans.
The proposal, now open to public consultation for 30 days, marks a significant step toward regulatory flexibility. Malatsi insists that the government is not offering Starlink or any specific company a special exemption. Rather, the policy aims to maintain the spirit of economic transformation while adapting to the realities of global investment and technological expansion.
If implemented, the changes could unlock high-speed internet for millions of South Africans, especially in rural and peri-urban areas where connectivity remains poor. Starlink’s satellite network could offer a near-immediate solution to long-standing digital divides, potentially transforming access to online education, remote healthcare, and e-commerce.
Analysts say the proposed shift signals a broader willingness by the South African government to modernise investment policies in strategic sectors. By allowing alternative models to equity ownership, the country could become more attractive to global tech and communications players while still holding them accountable to developmental goals.
The debate around the policy, however, is far from settled. Some civil society groups and BEE advocates have raised concerns that the change may weaken South Africa’s commitment to redressing historic imbalances. Malatsi has responded by emphasising that economic transformation remains central to government policy, and that the new approach is designed to bring more inclusive benefits in the long term.
If this policy is adopted, several business and investment opportunities may follow. Telecommunications and tech companies could expand their presence in South Africa without the obstacle of equity restructuring, encouraging more rapid market entry. Local suppliers, small businesses and training providers could benefit from foreign-funded transformation programmes. Infrastructure development particularly in broadband and rural connectivity would likely receive new momentum. It may also stimulate growth in digital services, including fintech, e-learning, telemedicine and e-commerce platforms, helping position South Africa as a regional hub for digital innovation.
