SA eases ownership rules, opening door for Starlink and other foreign operators

The SpaceX Falcon 9 rocket carrying Starlink satellites is seen over Sebastian Inlet after launching from Cape Canaveral, Florida, US, 26 February 2025. Reuters/Sam Wolfe

Starlink's parent company SpaceX wrote to the telecoms regulator Icasa last year saying that local shareholding laws were a significant barrier and that it should rethink the 30% ownership requirement for licensees.

South Africa's Electronic Communications Act requires foreign-owned communications licensees to sell 30% of equity in their local subsidiaries to historically disadvantaged groups - a provision criticised by Starlink and other companies.

In his policy direction published in a government gazette on Friday, Communications Minister Solly Malatsi said so-called "equity equivalent" investment programmes in the sector should count toward empowerment goals.

The policy changes will allow communications companies, including Starlink, to bypass the 30% equity requirement, instead recognising investments in things like digital infrastructure.

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"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."

Malatsi first proposed the changes in May and drew criticism from opposition political parties and some lawmakers that he was going too far to accommodate foreign businesses like Starlink.

But 90% of public comments on the draft changes were in favour of the policy, while a minority raised concerns about possible dominance by large or foreign operators.

Earlier this year, South Africa rejected a claim by Elon Musk that his Starlink satellite company could not operate in the country because he is not Black.