South Africa’s Starlink plan

South Africa’s government plans to push ahead with a policy directive that provides a workaround to Black-ownership requirements in the telecommunications industry, aiming to encourage Elon Musk’s Starlink and other satellite services to operate in the country.

According to a directive signed by Communications and Digital Technologies Minister Solly Malatsi, the government asked the country’s telecoms regulator to allow for an equity equivalent program for the industry, confirming an earlier Bloomberg News report.

Such a program would grant operators like Starlink access to Africa’s largest market without ceding ownership. 

The government had been negotiating a workaround that would overcome Musk’s opposition to the ownership rules before South African President Cyril Ramaphosa’s visit to the White House this week, Bloomberg News reported.

The new rules are meant as a concession, as Ramaphosa seeks to mend strained relations with the US and clinch a trade deal. 

South Africa is dealing with an onslaught of criticism by Musk and President Donald Trump, who’ve spread the conspiracy theory that there’s a genocide against White people in South Africa and attacked what they call racist policies in the country. 

The equity equivalent plan will form part of the Department of Communication and Digital Technologies’ medium-term plans. The alternative to Black economic-empowerment laws, which generally require 30% Black ownership in businesses operating in the country, would allow telecom companies instead to invest in projects such as infrastructure, local businesses, digital inclusion initiatives or research, according to Malatsi’s policy directive. 

It’s similar to a deal offered to the automotive industry in 2019. Car manufacturers — including BMW, Ford Motor and Toyota — established a fund that would bring disenfranchised groups into the sector.

South Africa introduced BEE rules after the end of apartheid, an era in which Black people were subjugated and excluded from the formal economy by the ruling White minority. Musk, who was born in Pretoria, has persistently criticized South Africa’s race-based laws, calling them “openly racist.” 

Starlink’s technology, which relies 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 local statistics agency.