South African lawmakers seek halt to easing rules for Starlink

The parliamentary committee that oversees South Africa’s telecommunications industry called for the withdrawal of a policy directive that would enable Elon Musk’s SpaceX and other satellite-internet companies to operate in the country without ceding ownership.

Communications and Digital Technologies Minister Solly Malatsi last week published an official notice asking the industry regulator to amend its rules to allow equity-equivalent investment programs to count toward empowerment, rather than insisting only on a 30% local Black-ownership requirement. The directive came after a public-consultation process in which he said 90% of submissions supported the decision.

Amendments along the lines of those proposed by Malatsi would open the way for Musk to make Starlink services available in the country. The Pretoria-born billionaire has refused to relinquish any equity in the business to comply with rules that South Africa enacted to redress the economic imbalances wrought by apartheid — laws Musk has called “openly racist.”

Malatsi has neither the “legislative nor moral authority to reverse the gains of democracy through this unilateral action,” Khusela Sangoni Diko, chairwoman of the portfolio committee on communications and digital technologies, said in a statement.

“These policy directives are an affront to the centuries-old fight for equity and redress by the Black majority in this country,” she said. “They further unintelligibly obfuscate existing law in a spirited attempt to circumvent the mandatory 30% equity ownership by historically disadvantaged groups.”

The portfolio committee will convene in the new year to consider the issue, Diko said. Department of Communications and Digital Technologies spokesman Kwena Moloto didn’t answer his phone when Bloomberg called seeking comment.

Malatsi’s announcement has also divided the two main parties in the South Africa’s coalition government — the African National Congress and the rival Democratic Alliance. Malatsi is a member of the latter party.

The ANC is “deeply concerned” by the official notice, which proposes provisions that would “allow certain operators, notably foreign satellite providers like Starlink, to bypass core transformation obligations,” the party said in a statement on December 13. “Weakening these obligations does not modernize the sector; it risks reversing hard-won gains and entrenching foreign dominance in a strategic national industry.”

The DA challenged the ANC’s assertion that Malatsi acted outside his powers, and that the policy directive enables the bypassing of empowerment or transformation requirements.

“Instead, it seeks to prevent international companies from being excluded altogether in cases where local ownership is not feasible,” the party said.

Satellite technologies that rely on a constellation of low-Earth orbit satellites would be a potential game-changer for South African users who’ve historically faced expensive or unreliable internet options. Only 1.7% of rural households have access to the internet, according to a 2023 survey compiled by the nation’s statistics agency.

A change to the industry rules would allow telecoms companies to invest in projects such as infrastructure, digital-inclusion initiatives or research that benefits previously disadvantaged communities.

The exemption is already standard for a number of industries, including the nation’s auto sector. In 2019, car manufacturers — including BMW AG, Ford Motor Co and Toyota Motor Corp — established a fund that would bring disenfranchised groups into the sector.

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