If Starlink, the Elon Musk-owned satellite Internet company, had any hope of a South African entry, that future just got bleaker.
The country is ten toes down. It won’t consider the equity equivalence programme suggested by Solly Malatsi, the country’s communications minister, in 2025, and will stick with the Black Economic Empowerment (BEE) rule that has stood for over 20 years.
On Wednesday, the Independent Communications Authority of South Africa (ICASA), the country’s telecoms regulator, pushed back against Malatsi’s plan to create a workaround that would allow Starlink and other foreign telecom companies to operate in the country without giving up 30% equity ownership under BEE rules.
Understand this first: South Africa’s Electronic Communications Act (ECA) requires telecom licence holders to have at least 30% ownership by historically disadvantaged groups. That is the exact requirement Starlink says it cannot comply with.
Malatsi had spent months pushing Equity Equivalent Investment Programmes (EEIPs) as an alternative. EEIPs allow companies to meet empowerment obligations through investments like infrastructure projects or local development initiatives. Starlink had also pledged to commit capital to community development under this route. All of that is now off the table.
ICASA remains rigid in its reasoning: It says the ECA does not allow that flexibility; unless the law changes, the workaround cannot move forward.
Starlink now has two realistic paths. One, accept the 30% ownership structure, which seems unlikely given that it hasn’t done so in any of the 26 African countries it operates in, and given Musk’s repeated public criticism of South Africa’s race-based ownership rules. Two, establish a local subsidiary, though that offers no guarantee either; Starlink said it had tried something similar in Namibia and was still rejected by regulators.
The situation is further complicated by Musk’s deteriorating relationship with South African officials. In April, he called Clayson Monyela, the country’s Head of Public Affairs, unprintable names in an X post, straining an already tense relationship.