South Africa to ease BEE requirements for Elon Musk’s Starlink and others

South Africa’s telecommunications minister directed the industry regulator to amend its rules on local ownership, which could pave the way for Elon Musk’s SpaceX and other satellite-internet companies to operate in the continent’s largest economy without ceding ownership.

“An overwhelming 90% of the submissions are in favour of the policy direction” that would allow equity-equivalent investment programs to count toward empowerment rather than insisting only on a 30% local Black-ownership requirement, Minister Solly Malatsi said in a government gazette published Friday. 

Malatsi first proposed the changes on May 23 and issued the direction after his department reviewed 15,000 substantive submissions from the public.

Amendments along these lines would open the way for Musk to make Starlink services available in the country. The Pretoria-born billionaire has refused to relinquish any equity in the business to comply with rules that South Africa enacted to redress the economic imbalances wrought by apartheid laws, which Musk has called “openly racist.”

The document states South Africa’s ICT sector code on Black economic empowerment recognises equity-equivalent investment programs, and the argument that they have no impact or are being used by international companies to evade compliance is not “legally sound.”

Satellite technologies that rely on a constellation of low-Earth orbit satellites would be a potential game-changer for South African users who’ve historically faced expensive or unreliable internet options.

Only 1.7% of rural households have access to the internet, according to a 2023 survey compiled by the nation’s statistics agency.

A change to the industry rules would allow telecoms companies to invest in projects such as infrastructure, digital-inclusion initiatives or research that benefits previously disadvantaged communities. 

The exemption is already standard for a number of industries, including the nation’s auto sector. In 2019, car manufacturers — including BMW, Ford and Toyota — established a fund that would bring disenfranchised groups into the sector.