South Africa’s communications minister, Solly Malatsi, announced a significant policy shift on October 6, 2023, permitting foreign satellite internet providers, including Elon Musk‘s Starlink, to operate without the requirement of selling 30% of their local equity to Black or other non-white owners. This decision aims to facilitate greater access to high-speed internet in South Africa and support the nation’s ongoing efforts to improve connectivity.
Policy Change and its Implications
The revised regulations, detailed in a government gazette, offer an alternative for foreign companies seeking licenses in South Africa’s communications sector. Instead of the previous ownership requirement, these companies can now invest in “equity equivalent” programs. This includes initiatives such as skills training and other efforts that support previously disadvantaged groups.
Critics of South Africa’s affirmative action policies, which are part of the Broad-Based Black Economic Empowerment framework, have argued that such regulations deter foreign investment. In March 2023, Musk publicly criticized these laws, claiming they were “openly racist” and stating that Starlink was barred from operating in his homeland because he does not belong to a historically marginalized group.
In his remarks, Musk referenced his struggles to launch Starlink in South Africa, asserting that the country’s laws prevented his company from accessing the market. His comments drew attention and sparked a broader conversation about the balance between affirmative action and foreign investment.
Connecting Underserved Communities
Starlink, a subsidiary of SpaceX, has already established a presence in over a dozen African countries, providing low-orbit satellite internet services to regions that often lack reliable connectivity. The company’s expansion into South Africa is seen as a vital step in addressing the digital divide, particularly in rural and underserved areas.
Minister Malatsi emphasized that Starlink’s involvement could significantly enhance internet access for these communities, which have historically faced challenges in obtaining reliable and high-speed online services. The new policy aims to attract investment while also contributing to the empowerment of disadvantaged groups through alternative support mechanisms.
As the landscape of South Africa’s communications sector evolves, this policy change reflects the government’s effort to adapt to the changing global market while addressing the socio-economic disparities rooted in the country’s past. The move could pave the way for increased competition and innovation within the telecommunications industry, ultimately benefiting consumers across the nation.