CAPE TOWN — South Africa’s Minister of Communications, Solly Malatsi, has clarified that his department’s proposed draft policy to recognise alternatives to Black ownership requirements in the telecoms sector is not being tailored specifically to benefit Elon Musk’s Starlink.
Speaking during a parliamentary briefing on Tuesday, Malatsi emphasized that the policy shift aims to broaden investment in the country’s information and communication technology (ICT) sector without compromising South Africa’s transformation agenda.
“I am pretty clear that transformation is sacrosanct in our country, that it’s a non-negotiable in order for the country to achieve its aspirations,” Malatsi said. “We are not attempting to open a special dispensation for Starlink or any other company or an individual.”
Last Friday, Malatsi’s department released a draft policy proposing the recognition of “equity equivalent” investment programmes. This would offer an alternative to the requirement that foreign-owned ICT companies sell a 30% stake in their local operations to historically disadvantaged South Africans in order to obtain an operating license.
The current regulation, enforced under the Electronic Communications Act, has been a sticking point for international firms, including SpaceX’s Starlink, which has previously voiced concerns about the ownership stipulations.
Controversial Policy Sparks Political Pushback
The proposal has sparked political controversy. Critics, including opposition leaders and Khusela Diko, Chairperson of the Parliamentary Portfolio Committee on Communications and Digital Technologies, argue the move could dilute South Africa’s transformation efforts in favor of foreign investors.
“It is going too far to appease foreign businesses like Starlink,” Diko said, warning that such policy shifts risk undermining the goals of economic redress.
Malatsi, however, insisted that the aim is not to weaken empowerment regulations, but rather to create a more flexible framework that allows companies to contribute meaningfully to transformation through alternative models—such as funding digital infrastructure or skills development programmes.
“The proposal is sector-wide and inclusive, not company-specific,” he said.
Starlink in the Spotlight
Elon Musk’s satellite internet service, Starlink, has been at the center of the debate due to its potential to improve rural connectivity in South Africa. The company has yet to officially launch in the country, reportedly due in part to the existing 30% equity ownership rule.
The proposed equity equivalent policy could potentially pave the way for Starlink’s entry, as well as for other global ICT firms hesitant about equity transfer requirements.
The draft policy is currently open for public comment. A final version is expected later this year, pending stakeholder engagement and legislative review.