Starlink storm: BEE reforms fuel tensions in Ramaphosa’s GNU

Tensions between communications minister Solly Malatsi and parliament’s portfolio committee on communications are set to flare up again, this time over his gazetting of a draft policy directive that seeks to overhaul empowerment rules in the ICT sector.

The details of Malatsi’s plan were announced last week, two days after a fiery meeting in the White House between President Cyril Ramaphosa and US President Cyril Ramaphosa at which the topic of licensing Elon Musk’s Starlink in South Africa was raised briefly by some of those in attendance. Malatsi has, however, vehemently denied that the proposed change to the rules is aimed at appeasing Musk, who has called South African legislation dealing with black economic empowerment “openly racist”.

Malatsi, a Democratic Alliance MP appointed to the cabinet last year in the government of national unity, is likely to get a grilling from the ANC’s Khusela Diko, who chairs the portfolio committee. Diko at the weekend said parliament would on Tuesday convene to hear Malatsi’s rationale for gazetting the policy directive, and warned the directive appeared to be “in contravention” of the Electronic Communications Act.

The question of whether these initiatives are aimed at paving the way for Starlink will also be explored at the briefing, Diko said, despite Malatsi’s denials of a link.

“Two things are true: it is a good idea to open the market to investment in the same way other industry sectors have, while obviously the timing is highly suggestive of appeasement of the US government,” said Dominic Cull, a leading ICT sector lawyer.

Equity equivalence investment programmes (EEIPs) give companies – both foreign and local – the opportunity to meet BEE requirements by investing in initiatives such as skills development and the delivery of services to underprivileged communities and schools. Companies like Microsoft and Amazon Web Services have made use of such programmes, obviating the need for these companies to sell an equity stake to companies owned by historically disadvantaged persons (HDPs).

Foreign investment

The use of EEIPs is meant to make it easier for foreign-owned companies to invest in South Africa while directing the purported benefits of BEE directly to the communities the legislation is meant to uplift.

According to a Friday statement from Malatsi’s office, the introduction of EEIPs in the ICT sector is meant to “maximise the prospects of attracting investments through regulatory reforms”.

The merit of EEIPs over the current local equity requirements for licensees in the telecommunications sector is a subject of ongoing debate in the GNU.

Read: Starlink in South Africa: why equity equivalence makes sense

Despite already being licensed in a number of countries in Southern Africa, including Zimbabwe, Zambia, Malawi, Lesotho, Eswatini, Botswana and Mozambique, Starlink is yet to obtain an operating licence in South Africa; BEE requirements demanding that companies sell at least 30% equity in local licensees to HDPs have been said to be the cause. Starlink has formally asked Icasa to change the licensing requirements to allow for equity equivalents.

Musk has for the past year been driving a campaign on his social media platform X against what he has claimed are South Africa’s “racist” BEE laws. In a post in March, he claimed Starlink “is not allowed to operate in South Africa because I’m not black”.

Racial tensions also took centre stage in last week’s White House encounter between Ramaphosa and Trump, at which Musk was present (but didn’t speak). When tensions between the two presidents were near boiling point, South African billionaire Johann Rupert moved to quell tensions with remarks that hinted at the need for Starlink in the country.

“We have too many deaths but it’s not only white farmers, it’s across the board,” Rupert said at the White House press conference in response to allegations that there is a white genocide taking place in South Africa. “We need technological help. We need Starlink at every little police station, and we need drones,” he pleaded, looking directly across the room at Musk.

There have been some suggestions that the Trump administration is using political power to drive Musk’s Starlink agenda – and critics have pointed to neighbouring Lesotho as a good example of this.

Lesotho, whose ICT sector regulations also include local ownership rules, in April made an exception for Starlink amid growing tariff pressure from the US government, which had threatened to levy the highest tariffs in the world on the impoverished country, threatening thousands of jobs in its textile sector.

Starlink was then allegedly granted an operating licence without adhering to the local ownership rules.

“By proceeding with this decision [to license Starlink], the Lesotho Communications Authority has not only disregarded the valid objections of local stakeholders but has also compromised the integrity and credibility of the regulatory process,” Kananelo Boloetse, a coordinator at Section 2, a Lesotho-based non-partisan civil advocacy organisation, said in April.

Starlink licensing

The Washington Post earlier this month reported (paywall) that Democratic senators have called for an investigation into allegations that the US government – led by secretary of state Marco Rubio – used Trump’s retaliatory tariff regime, and the subsequent negotiations that ensued, as a means to fast-track regulatory approval for Starlink.

According to the report, these discussions allegedly led to the rapid licensing of Starlink in India, Somalia, Lesotho, the Democratic Republic of Congo, Bangladesh, Pakistan and Vietnam – which all viewed the move as a way to appease the US and open the door to more amicable trade negotiations, according to the report.

When Malatsi meets with parliament’s portfolio committee on Tuesday, Malati’s efforts to make South Africa’s ICT sector more attractive to foreign investors will be pitted against the ANC’s rigid stance on BEE. Questions may also be raised over the independence of South Africa’s legal and regulatory processes in the face of external pressure.

Read: South Africa tables Starlink-friendly policy shift

According to Cull, driving investment in the ICT sector through regulatory reform is a much-needed step forward, and not just because of Starlink.

“The sector requires as much investment in digital infrastructure, digital public infrastructure and demand-side interventions as it can attract. Having said that, the impact of current low-Earth orbit satellite providers on meaningful universal connectivity for all South Africans has been overstated,” he said.

According to Cull, an across-the-board overhaul of the regulatory burden on ICT sector licensees is required as there are “too many regulators and too many pointless obligations that create barriers to entry and increase the cost to communicate”.

“There is a still a lengthy and likely contentious legal process to be followed. Assuming everything goes smoothly and there is no litigation, we are still looking at a minimum of two years to finalise the policy and for Icasa to amend its regulations on transformation,” said Cull.  – © 2025 NewsCentral Media

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