Business

South Africa Looks to Ease BEE Rules to Bring Starlink Internet Onboard

Published

3 months ago

May 20, 2025

zaghrah

South Africa is shifting its stance on Black Economic Empowerment (BEE) laws to pave the way for Elon Musk’s satellite internet service, Starlink, to operate in the country.

According to sources familiar with the matter, government officials will meet with Musk or his representatives during a last-minute engagement on Tuesday night in Washington, ahead of President Cyril Ramaphosa’s scheduled visit to the White House. The meeting aims to cool tensions with both Musk and US President Donald Trump, who have publicly criticized South Africa’s ownership rules.

Talks around launching Starlink in South Africa stalled earlier this year after Musk claimed he was barred from operating “because I’m not Black,” referring to BEE rules that require 30% Black ownership for licensing in some sectors. Trump has also echoed concerns, falsely alleging that White South Africans face genocide — a claim dismissed by a South African court as “clearly imagined.”

A Broader Policy Shift

In a notable pivot, South Africa is preparing to extend an alternative BEE model — known as the Equity Equivalent Investment Programme (EEIP) — to the ICT sector. This alternative compliance route would not only benefit Musk’s Starlink, but apply to all global tech companies operating in the country, including those from China and the Middle East.

Under the EEIP, companies can invest in digital infrastructure, training programs, or provide satellite kits to rural communities, rather than giving up equity.

The Department of Communications and Digital Technologies clarified in a statement that the shift is “not about providing access to a single company, but part of a broader strategy to create an enabling environment for international investment and expand digital connectivity.”

Rural Internet Access Remains Dire

Starlink, which relies on low-Earth orbit satellites, could be a game-changer for South Africa’s rural communities. As of 2023, only 1.7% of rural households had reliable internet access, according to Stats SA.

Improving access is critical for bridging the digital divide, especially as the country positions itself to become a hub for Fourth Industrial Revolution (4IR) industries. Starlink’s entry could boost economic inclusion, education, and small business growth across underserved regions.

Tensions with the US and Strategic Timing

The policy shift appears to be timed with Ramaphosa’s Washington visit. Though discussions with Musk are separate from formal trade talks, enabling Starlink to operate could signal goodwill toward the US amid rocky diplomatic waters.

In 2019, the auto industry successfully used the same EEIP workaround to satisfy BEE requirements. Manufacturers like Ford, Toyota, and BMW launched a shared fund to empower historically disadvantaged groups in the automotive value chain.

South Africa’s adaptation of this model for ICT may prove pivotal in balancing domestic empowerment goals with the realities of attracting global tech investment.

South Africa’s willingness to adjust its BEE compliance model for Starlink marks a pragmatic shift in digital policy. If successful, the move could unlock fast, affordable internet for millions — and reset a strained relationship with one of its most famous native sons.