South Africa opens door for Starlink with relaxed ownership rules
Telecommunications, Communications and Digital Technologies Minister Solly Malatsi has ordered the industry regulator to relax strict equity requirements, effectively opening the door for international companies like SpaceX’s Starlink to enter the market.
The policy directive, gazetted on Friday, December 12, instructs the Independent Communications Authority of South Africa (Icasa) to “urgently consider alignment” of its rules with national black economic empowerment (B-BBEE) codes.
This compels the regulator to recognise Equity Equivalent Investment Programmes (EEIPs) as a valid alternative to the long-standing mandate that telecoms licensees must sell 30% of their local equity to historically disadvantaged groups (HDG).
For years, this 30% rule has been the primary obstacle for Starlink, as its parent company SpaceX maintains a global policy of 100% ownership of its subsidiaries.
The new EEIP framework allows qualifying multinationals to meet empowerment obligations by investing in local skills development, enterprise support, infrastructure, and digital inclusion initiatives instead of divesting shares.
Minister Malatsi framed the directive as a necessary step to unlock “national and international investments” critical for bridging the digital divide and improving connectivity.
He anticipates criticism that the move is tailored for Starlink but argues the policy applies equally to all licensees. Notably, SpaceX had publicly endorsed the shift towards an equity-equivalent model in its submissions to Icasa as recently as August.
The directive also represents a significant power shift within government. By forcing Icasa to accept EEIPs approved by the Department of Trade, Industry and Competition (DTIC), regulatory gatekeeping authority moves from the independent regulator to the executive cabinet. This could streamline approvals but has raised questions about regulatory independence.
If Icasa complies, as legally expected, Starlink’s path to offering satellite internet services in South Africa will be clear. The move is likely to intensify competition in a market where affordable, high-speed internet access remains a pressing need. The regulator now faces the task of amending its regulations to enact the minister’s instructions.