South Africa Amends Black Ownership Rules, Paving Way for Starlink Entry Amid Political Debate

South Africa Revises Black Ownership Requirements in ICT Sector

South African authorities are moving to amend Black ownership requirements within the telecommunications sector, a development that could significantly impact international companies seeking to operate in the country. Communications Minister Solly Malatsi issued a policy direction to the Independent Communications Authority of South Africa (ICASA) on Friday, December 13, 2025, instructing the regulator to align its rules with the broader Amended Broad-Based Black Economic Empowerment (B-BBEE) ICT Sector Code. This directive aims to facilitate investment and expand access to high-speed internet, particularly in underserved rural areas.

New Framework for Empowerment Compliance

The core of the amendment involves recognizing 'equity-equivalent investment programs' (EEIPs) as a valid means for companies to meet empowerment goals, rather than strictly adhering to the previous 30% direct Black ownership requirement. Historically, South Africa's Electronic Communications Act mandated that foreign-owned communications licensees sell 30% of equity in their local subsidiaries to historically disadvantaged groups. Under the revised policy, telecommunications companies can now invest in projects such as infrastructure development, digital inclusion initiatives, or research that benefits previously disadvantaged communities, thereby contributing to empowerment without ceding direct ownership. Minister Malatsi stated that this approach reinforces regulatory parity and does not weaken transformation, but rather promotes investment and improves the lives of South Africans.

Starlink's Path to South Africa Opens

This policy shift is widely seen as paving the way for Elon Musk's Starlink, the satellite internet service, to launch operations in South Africa. Starlink's parent company, SpaceX, had previously identified the 30% local shareholding laws as a significant barrier to entry. Musk himself had publicly criticized the ownership rules. Starlink has reportedly pledged investments, including connecting thousands of rural schools and clinics, which could now be recognized under the new EEIP framework. The need for improved internet access is critical, as a 2023 survey indicated that only 1.7% of rural households in South Africa had internet access.

Political Division and Public Support

While the directive has garnered significant public support, with an 'overwhelming 90% of submissions' in favor during a public consultation process that attracted between 15,000 and 19,000 comments, it has also ignited political division. The parliamentary Portfolio Committee on Communications and Digital Technologies, chaired by Khusela Sangoni Diko, has called for the immediate withdrawal of Malatsi's directive. Diko argued that the minister lacks the 'legislative nor moral authority' to reverse transformation gains and that the policy unlawfully circumvents the mandatory 30% ownership requirement, potentially leading to dominance by large foreign operators. The African National Congress (ANC) opposition party has also expressed strong criticism, suggesting the directive exceeds the minister's legal authority and threatens national security and transformation efforts. Despite the opposition, Malatsi maintains that the policy aligns with existing B-BBEE legislation and aims to foster economic growth and inclusion.