No Favouritism for Musk: SA Clarifies Telecom Policy Shift

South Africa’s digital policy debate is heating up – and it’s not just about satellites or billionaires. At the heart of the current storm is whether a proposed change to telecom regulations opens the door for progress – or makes an exception for one high-profile player: Elon Musk’s Starlink.

What’s Proposed – and Why It Matters

South African law currently requires foreign-owned telecom companies to sell 30% of their local equity to Black or historically disadvantaged South Africans in order to operate. It’s a key pillar of the country’s economic redress framework after apartheid.

But in May 2025, the Department of Communications and Digital Technologies released a draft policy offering more flexibility. The proposal introduces Equity Equivalent Investment Programmes (EEIPs) – allowing companies to meet transformation goals by investing in things like local supplier development, rural education, skills training, and broadband infrastructure.

The goal? Maintain empowerment while attracting global investment and unlocking competition in a market dominated by just a few big players.

Industry body ACT (Association of Communications and Technology) cautiously welcomed the draft, calling for “transparency, consistency, and measurable impact.”

Critics Cry Favouritism

The policy’s timing sparked immediate suspicion. Just days before its release, President Cyril Ramaphosa met former U.S. President Donald Trump, who reignited false claims about white South African farmers being targeted.

Soon after, opposition parties like BOSA and the EFF slammed the policy shift, accusing the government of bending the rules to accommodate Musk’s Starlink. They warned it could undermine the spirit of B‑BBEE (Broad-Based Black Economic Empowerment).

Government Denies Special Deal

Minister Solly Malatsi, who heads the communications department, rejected those claims in Parliament. He said the policy direction was in development since September 2024, well before the Trump meeting.

“There is no conspiracy on our part. We are not opening a special dispensation for Starlink or any other company,” Malatsi said.

He noted that EEIPs are already used in other industries and that this framework is about broadening access, not weakening empowerment.

Image 1: MyBroadband

Starlink’s Status in SA

Elon Musk has been vocal in criticising South Africa’s 30% equity rule, calling it “racist” and blaming it for Starlink’s absence from the local market.

However, officials confirm that Starlink has not submitted a formal licence application. Despite this, Starlink is already active in Eswatini, Zimbabwe, Malawi, Mozambique, Kenya, and Botswana.

Reports suggest Starlink has shown interest in investing up to R500 million in rural broadband and education via an EEIP if allowed to operate in South Africa – but there’s no official deal.

Regulatory experts say even if Starlink applied tomorrow, licensing via ICASA under the EEIP model could take 18 to 24 months, meaning operations may only begin in late 2026 or 2027.

Where It Stands Now

• The draft policy is open for public comment until early July 2025.

• After submissions close, a 6–9 month review period will follow.

• If approved, ICASA would then have 12–18 months to implement the new EEIP licensing framework.

More Than Just a Tech Debate

At its core, this isn’t just a Starlink story – it’s about how South Africa balances economic empowerment and digital access.

Supporters say the policy could expand affordable broadband to underserved communities. Critics argue the legal clarity and equity safeguards must be airtight or risk undermining decades of progress.

As of now, Starlink has no licence, no fast track, and no confirmed launch date in South Africa. What’s happening instead is a broader re-evaluation of how foreign investment and social equity can coexist in a fast-moving digital world.

Public response in July will shape the future of that balance – and possibly, the future of South Africa’s telecoms industry.

Also read: “No More Excuses”: U.S. Sets Firm Conditions for Restoring Ties with South Africa

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Source: The Independent

Featured Image: The Express Tribune