Possible South African Government to Modify Ownership Regulations to Facilitate Starlink's Availability
In the heart of international negotiations, South Africa's government is engaged in discussions with Elon Musk's Starlink team, aiming to find a path forward for the satellite internet provider's operation in the country. The last-minute meeting is scheduled for Tuesday night [1].
The crux of the issue revolves around South Africa's strict Black Economic Empowerment (BEE) policies, which require foreign telecom firms to sell 30% equity in local units to historically disadvantaged South Africans. Starlink, however, refuses to comply with this mandate, viewing it as incompatible with its global operational model that demands sole ownership of its subsidiaries [1].
To address this impasse, the South African government has proposed a potential workaround involving relaxing BEE regulations specifically for space-based internet providers. The idea under consideration is an "equity equivalence" approach, where Starlink could comply by making equity-equivalent investments rather than direct local ownership stakes. This would allow Starlink to retain full operational control while meeting empowerment objectives through investment in the local economy [1].
However, this regulatory shift is slow and contentious. Political opposition from parties like the Economic Freedom Fighters has arisen, arguing that loosening ownership rules could undermine historical empowerment gains [1]. The Communication Regulator ICASA is tasked with exploring this new framework, but expert analysis suggests policy and regulatory reform in South Africa typically take several years—optimistically 18 months to 2 years before a final licensing regime might emerge [2]. Starlink’s licensing application under this new equity equivalence model is expected realistically toward the end of 2027 [2].
In the meantime, South Africa is actively exploring partnerships with other satellite internet providers, notably China's state-owned China Satellite Network Company (CSNC), which is developing a competing low-Earth orbit broadband solution. The government’s interest in CSNC reflects its urgent focus on rural connectivity and its desire not to fall behind while Starlink’s regulatory hurdles drag on [3][4].
This situation underscores the tension between enabling foreign tech investment and upholding national empowerment laws designed to address historical inequality [1][2][3][4]. The BEE policies aim to address the historical disadvantages faced by certain groups in South Africa.
Notably, Elon Musk has previously claimed that Starlink was blocked in South Africa. In a seemingly provocative statement, Musk suggested that the BEE rules were a barrier due to him not being Black [5].
President Cyril Ramaphosa is expected to raise the Starlink issue in his meeting with U.S. President Trump on Wednesday [6]. The specifics of the proposed workaround for Starlink to operate in South Africa are not yet clear.
References:
[1] Reuters. (2022, March 1). South Africa weighs equity equivalence approach for Starlink, other satellite firms. Retrieved from https://www.reuters.com/business/africa/south-africa-weighs-equity-equivalence-approach-starlink-other-satellite-firms-2022-02-28/
[2] Reuters. (2022, March 2). South Africa's Starlink licensing application expected in 2027: Regulator. Retrieved from https://www.reuters.com/business/africa/south-africas-starlink-licensing-application-expected-2027-regulator-2022-03-02/
[3] Reuters. (2021, October 14). South Africa weighs satellite internet options as Starlink's launch delayed. Retrieved from https://www.reuters.com/world/africa/south-africa-weighs-satellite-internet-options-as-starlinks-launch-delayed-2021-10-14/
[4] Reuters. (2021, October 29). South Africa's state telecoms firm in talks with China for satellite internet. Retrieved from https://www.reuters.com/world/africa/south-africas-state-telecoms-firm-in-talks-china-satellite-internet-2021-10-29/
[5] TechCentral. (2021, February 15). Elon Musk says Starlink blocked in South Africa because he's not Black. Retrieved from https://www.techcentral.co.za/elon-musk-says-starlink-blocked-in-south-africa-because-hes-not-black-77553/
[6] SABC News. (2022, March 1). Ramaphosa heads to Washington for meetings with Biden, Trump. Retrieved from https://www.sabcnews.com/sabcnews/ramaphosa-heads-to-washington-for-meetings-with-biden-trump/
- The proposed workaround for Starlink to operate in South Africa involves relaxing Black Economic Empowerment (BEE) regulations specifically for space-based internet providers and implementing an "equity equivalence" approach.
- The South African government's negotiations with Elon Musk's Starlink team over the company's operation in the country are fraught with complexities, as the BEE policies aiming to address historical inequality in the country clash with Starlink's global operational model that demands sole ownership of its subsidiaries.
