South Africa will amend its rules on local Black ownership in the telecommunications sector following a directive from the minister of communications, a move that could clear the way for satellite internet providers such as Elon Musk’s Starlink to operate in the country.
The policy shift was set out in a direction published in the government gazette on Friday by Communications Minister Solly Malatsi. It allows so called equity equivalent investment programmes to count towards the country’s empowerment requirements, offering an alternative to the long standing rule that requires foreign owned communications licensees to sell 30% of equity in their local subsidiaries to historically disadvantaged groups.
Under the Electronic Communications Act, this ownership threshold has been a central pillar of transformation policy in the sector. However, it has also been criticised by several international firms as a major barrier to entry. Starlink’s parent company SpaceX wrote to the telecommunications regulator ICASA last year, arguing that the local shareholding requirement made it commercially unviable to offer its satellite internet services in South Africa and urging regulators to reconsider the framework.
Malatsi said the revised policy would not dismantle transformation objectives but rather modernise how they are achieved. He said investments in areas such as digital infrastructure, network expansion and skills development should be recognised as meaningful contributions to empowerment, particularly where they expand access to connectivity.
“The final policy direction reinforces the need for regulatory parity. It does not favour any entity, bypass the Electronic Communications Act, or weaken transformation,” Malatsi said. “This alignment will help attract more investment, support meaningful transformation and improve the lives of South Africans, especially those in rural and underserved communities who still lack access to high speed internet.”
The changes would allow companies like Starlink to meet empowerment goals without transferring equity, instead committing capital to projects that advance national development priorities. For satellite internet providers, this could prove decisive, as their global operating models often rely on centralised ownership and scale.
The proposal has not been without controversy. When Malatsi first floated the idea in May, opposition parties and some lawmakers accused him of bending policy to suit foreign corporations, particularly Starlink. Critics warned that easing ownership requirements could undermine decades of efforts to address racial exclusion in the economy and risk entrenching the dominance of large international players.
However, the consultation process revealed strong public backing. According to the ministry, about 90% of submissions on the draft policy supported the changes, while a smaller group raised concerns about market concentration and reduced local participation.
The debate has also been coloured by public remarks from Elon Musk earlier this year. Musk claimed South Africa was blocking Starlink because he is not Black, a statement that was firmly rejected by the government. Officials said the issue was not personal but rooted in existing legislation that applied equally to all foreign operators.
Analysts say the revised policy reflects a broader attempt by the government to balance transformation goals with the need to expand digital access and attract investment. South Africa continues to struggle with patchy connectivity, particularly in rural areas, and satellite broadband is seen as a potential solution where fibre and mobile networks are costly to deploy.
If implemented smoothly, the amendments could reshape the telecommunications landscape, opening the market to new players while redefining how empowerment is delivered in a rapidly evolving digital economy.
