The government has announced plans to relax local ownership rules, specifically targeting companies such as Elon Musk’s Starlink in a significant policy shift aimed at facilitating the entry of foreign satellite service providers into South Africa, reports Cape {town} Etc.
This move comes amid ongoing regulatory barriers that have hindered potentially lucrative investments in the telecommunications sector.
The directive, signed by Communications and Digital Technologies Minister Solly Malatsi, outlines the government’s strategy to introduce an equity equivalent framework.
This initiative seeks to attract global industry giants, including SpaceX’s Starlink, which has been unable to operate due to the stringent current regulations.
Under this proposed framework, multinational corporations could fulfil their empowerment obligations through alternative measures such as investments in local suppliers, skills development, job creation, and infrastructure support, rather than adhering strictly to the conventional equity ownership requirements set forth by South Africa’s Broad-Based Black Economic Empowerment (B-BBEE) Act.
‘This policy direction is not just about easing entry barriers for international players.
‘It’s about harmonising existing legislation to allow for innovative pathways that enhance investment while remaining committed to our broad transformation goals,’ Malatsi stated.
The policy stipulation, recently detailed in a Government Gazette notice, advocates for the alignment of the Electronic Communications Act (ECA) with broader legislative frameworks.
This harmonisation is intended to recognise these alternative ownership models as viable solutions to improve South Africa’s broadband access, thereby bridging the digital divide and encouraging competition across the sector.
In a nod to public engagement, stakeholders have been granted 30 days, following the notice’s publication on May 23, 2025, to submit comments on this proposed policy direction, reflecting the government’s intent to incorporate diverse perspectives into its regulatory approach.
However, the proposal has not been without controversy. The Economic Freedom Fighters (EFF) have vocally opposed the initiative, characterising it as a mechanism that permits multinational corporations such as Starlink to evade South Africa’s B-BBEE laws.
The EFF condemned the policy as a betrayal of transformation efforts and accused the Government of National Unity of capitulating to external pressures.
‘The EFF expected this betrayal, and we have consistently warned that the Government of National Unity is facilitating the erosion of transformation in the interests of white capital and Western imperialism.
‘This policy direction is unconstitutional and driven by external influence, particularly from Elon Musk, a close ally of Donald Trump,’ the party stated emphatically.
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