South Africa’s Black Economic Empowerment (BEE)
By Mpho Moloi
Pretoria, 31 January 2025 – Elon Musk’s Starlink has “no choice” but to comply with South Africa’s Black Economic Empowerment (BEE) laws if it wishes to operate in the country, according to Communications Committee Chairperson Khusela Diko. She reaffirmed the government’s stance that no company can bypass the country’s regulations, particularly the 30% BEE ownership requirement for businesses in the telecommunications sector.
Diko made these remarks while addressing a cluster media briefing on Thursday, where she was questioned about SpaceX’s submission to the Independent Communications Authority of South Africa (ICASA). Starlink’s parent company argued that the current BEE laws create a significant barrier for international satellite operators like Starlink and requested reconsideration of the policy before entering the South African market.
Government’s Firm Stance on BEE Compliance
Diko dismissed the idea that South Africa’s BEE regulations should be altered to accommodate Starlink, stating that all companies must adhere to the same laws.
“Countries do have laws, and in South Africa, we have BEE legislation which says in the specific sector this country wants to operate in, there shall be a 30% BEE [requirement].”She compared the South African regulatory stance to that of the United States, highlighting former U.S. President Donald Trump’s decision to impose restrictions on TikTok.
“President [Donald] Trump then said TikTok can continue to operate in the US provided the company is 50% owned by a US citizen.”Diko’s remarks underscore the government’s commitment to maintaining economic transformation policies, ensuring that foreign companies do not sidestep South African laws.
ICASA and Policy Developments
ICASA, which regulates the telecommunications sector, has been engaging with SpaceX regarding Starlink’s application to operate in South Africa. The company has asked for a relaxation of the BEE ownership requirement, arguing that its global operational model does not allow for local equity partnerships.
In October 2024, Communications Minister Solly Malatsi announced that he was considering issuing a policy directive to ICASA to clarify the state’s position on BEE rules for satellite internet providers. However, the government has not indicated that it intends to loosen its regulations for Starlink or any other foreign-owned telecommunications firm.
“The Ministry will ensure that telecommunications policies are aligned with the country’s economic transformation agenda,” said Minister Malatsi in an earlier statement.Public Interest SA Warns Against BEE Exemptions for Starlink
Some organisations have called on the government to stand firm against any exemptions for Starlink. Public Interest SA, a civil society organisation focused on economic transformation, warned that bending the rules for SpaceX could undermine South Africa’s BEE policies.
Chairperson Tebogo Khaas stated:
“Allowing Starlink to bypass local ownership requirements would not only set a dangerous precedent but also threaten South Africa’s transformation agenda.”Public Interest SA also argued that Starlink’s satellite internet services would generate massive revenues in South Africa, and at least part of these profits should benefit historically disadvantaged South Africans.
Industry Calls for Flexibility to Enable Starlink’s Entry
On the other side of the debate, some industry players believe the government should reconsider the BEE requirement for satellite operators like Starlink.
Mining giant Anglo American, which conducted a Starlink trial in South Africa, reported that the service significantly improved connectivity in remote mining areas. The company urged ICASA to explore alternative regulatory solutions, such as temporary exemptions or trial licences, to facilitate Starlink’s entry.
“Starlink could revolutionise internet access for South Africans in rural areas where traditional broadband is unavailable. We believe ICASA should consider mechanisms to enable its operation while maintaining economic transformation goals,” an Anglo American spokesperson said.Potential Economic and Connectivity Benefits of Starlink in South Africa
Starlink’s entry into South Africa could significantly impact the country’s internet landscape, particularly in rural and underserved areas. The service, which uses low Earth orbit (LEO) satellites, provides high-speed internet in areas where fibre and mobile networks struggle to reach.
If allowed to operate, Starlink could help address South Africa’s digital divide by:
• Providing fast and reliable internet access to rural communities
• Enhancing digital education and e-learning opportunities
• Supporting agricultural and mining industries with improved connectivity
• Boosting small businesses in remote areas through better digital access
South Africa’s Digital Economy and the BEE Debate
The debate over Starlink’s compliance with BEE laws is part of a larger discussion on economic transformation in South Africa’s digital economy. While BEE policies are designed to promote inclusive economic participation, some critics argue that they may deter foreign investment.
Technology analyst Arthur Goldstuck noted:
“BEE policies serve an important role in redressing past inequalities, but they need to be balanced with policies that encourage investment and innovation. The question is whether a one-size-fits-all BEE policy is suitable for all industries, especially in emerging tech fields.”
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