South Africa’s Communications Minister Solly Malatsi has issued a policy that requires the country’s telecom regulator to accept equity equivalent investment programs as alternatives to the 30% Black ownership requirement.
Malatsi’s policy received over 19,000 public submissions and approximately 90% of those were in support of the approach which disproves the idea that the policy especially favors Elon Musk and his company.
Starlink can now launch in South Africa
South African Communications Minister Solly Malatsi has finalized a controversial policy directive published on Friday that instructs the Independent Communications Authority of South Africa to align its ownership regulations with the national empowerment framework by recognizing equity equivalent investment programs.
Starlink has been unable to launch in South Africa for years because the current ICASA rules require telecommunications companies to sell 30% of their equity to historically disadvantaged individuals. Starlink has consistently refused, stating it does not sell equity in any market where it operates.
But now under the new directive, multinational companies that cannot sell equity due to global shareholding structures can instead make substantial investments in local development programs. These equity equivalent investment programs must be worth either 30% of the company’s South African operations value or 4% of annual local revenue. The programs require approval and monitoring by the Department of Trade, Industry and Competition.
According to the department, more than 19,000 submissions were received during the public comment period, with only about 15,000 being substantial. Approximately 90% of submissions supported the EEIP proposals.
The policy directive clarifies that ICASA participated in developing the ICT sector empowerment code and that all government organs must apply it. It also states that ICASA’s decision to exclude large portions of the code from its regulations, including provisions for equity equivalents, is not legally permissible.
Malatsi stressed that the directive applies equally to all telecommunications companies, which satisfies telecoms operators like Vodacom and MTN. The companies argued that existing licensees should have the same options as new ones.
Starlink has already outlined plans to invest nearly R2 billion in South Africa. The company proposed investing R500 million to connect approximately 5,000 schools to high-speed internet, benefiting about 2.4 million students.
Ryan Goodnight, Starlink’s Senior Director of Market Access, has stated the company will partner with local internet service providers to install and maintain infrastructure using an open-access model. The company has also pledged to establish a Broad-Based Black Economic Empowerment-compliant South African subsidiary.
What happens next for Starlink’s licensing process?
Before Starlink can operate, ICASA must still go through a formal process involving public consultations, regulatory hearings, and legal finalization to amend its ownership regulations.
Telecommunications expert Dominic Cull has warned that even with political support, the full regulatory amendment process could take 12 to 18 months or longer. The Department of Communications and Digital Technologies aims to finalize the EEIP policy by March 2026, and some experts predict Starlink may not launch in South Africa until late 2027.
In May 2025, ICASA announced investigations into South Africans engaging in unauthorized Starlink use through equipment obtained from international sources.
The Economic Freedom Fighters and some civil society groups have strongly criticized the policy. They argue it allows foreign companies to avoid meaningful transformation and undermines the spirit of Black Economic Empowerment. The EFF has threatened legal challenges if the policy is implemented.
More than 20% of South Africa’s population still does not actively use the internet despite widespread mobile network coverage. Affordability remains the primary barrier, along with device costs. Minister Malatsi has argued that the deployment limits for fiber infrastructure in remote regions have been met, and therefore, satellite technology is essential for achieving universal connectivity goals.
Minister Malatsi defended against accusations that the policy favors Starlink specifically clarifying that no exemptions have been granted exclusively to any company, as other multinationals like Microsoft, Amazon Web Services, and JP Morgan already use EEIPs in South Africa in other sectors.
Amazon’s Project Kuiper and Eutelsat OneWeb are also considering entering into the South African market, and if they or other companies are willing to compromise on ownership requirements and accept the 30% equity rule, they may reach the market first despite Starlink’s stronger brand and larger operational capabilities.
The regulatory changes, if fully implemented, would establish South Africa as taking a different approach than some African neighbors. Countries like Kenya, Rwanda, and Nigeria have adopted more flexible regulatory frameworks that have attracted digital technology investment more quickly. South African policymakers worry about losing competitiveness if their regulatory environment is perceived as unnecessarily restrictive.
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Source: https://www.cryptopolitan.com/musk-south-africa-starlink-expansion/
