The political path for Elon Musk’s Starlink to enter South Africa has hit a major snag after a key parliamentary committee demanded the withdrawal of a policy directive that would ease local Black ownership requirements for satellite-internet companies.
The Portfolio Committee on Communications and Digital Technologies called for the policy directive to be scrapped, placing the sector at the center of a heated debate over economic redress and foreign investment.
Policy Move Under Fire
Last week, Communications and Digital Technologies Minister Solly Malatsi (Democratic Alliance) published an official notice seeking to amend regulations.
This change would allow satellite-internet providers like SpaceX to meet empowerment obligations through equity-equivalent investment programs (e.g., funding infrastructure or digital-inclusion projects) rather than the mandatory 30% local Black-ownership requirement.
The move followed a public consultation process which Malatsi stated garnered 90% support for the decision. Musk, the Pretoria-born billionaire, has notably refused to cede equity in Starlink to comply with the existing laws, which he has previously labeled as “openly racist.”
‘Affront to Equity’
The parliamentary committee, however, strongly condemned Malatsi’s action.
“These policy directives are an affront to the centuries-old fight for equity and redress by the Black majority in this country,” said Khusela Sangoni Diko, chairwoman of the portfolio committee (African National Congress).
“They further unintelligibly obfuscate existing law in a spirited attempt to circumvent the mandatory 30% equity ownership by historically disadvantaged groups.“
Diko asserted that the Minister lacked the “legislative nor moral authority” to unilaterally reverse the gains of democracy, confirming the committee will convene in the new year to deliberate the issue.
Coalition Divided
The ruling coalition government is now openly split on the matter.
- The African National Congress (ANC), in a statement on December 13, voiced “deep concern” that the policy notice proposes provisions allowing foreign satellite providers like Starlink “to bypass core transformation obligations.” The party argues that weakening these obligations risks reversing “hard-won gains.”
- Malatsi’s Democratic Alliance (DA) countered the ANC’s claims, stating the directive does not bypass empowerment, but rather seeks to prevent international companies from being “excluded altogether in cases where local ownership is not feasible.”
Digital Lifeline
For many South African users, a low-Earth orbit satellite network could be a “game-changer” for reliable, affordable internet access. Statistics from a 2023 survey by the nation’s statistics agency underscore the urgency, showing that only 1.7% of rural households currently have internet access.
The equity-equivalent model, which allows for investment in projects benefiting previously disadvantaged communities (such as infrastructure or research), is already a standard exemption in other major South African industries, including the auto sector.
Manufacturers like BMW, Ford, and Toyota established a fund in 2019 to bring disenfranchised groups into their sector via this route.
Source: Bloomberg
