South Africa denies trying to bend the rules to give Musk's Starlink preferential treatment

CTV News

27-05-2025

Tesla and SpaceX CEO Elon Musk speaks at the SATELLITE Conference and Exhibition, March 9, 2020, in Washington. (AP Photo/Susan Walsh, File)
JOHANNESBURG — South Africa's communications minister Tuesday denied accusations that a draft policy watering down Black ownership requirements for tech firms was proposed to benefit the Starlink business of white South African-born billionaire Elon Musk.
Under South African law, foreign-owned companies are required to sell 30% of their subsidiaries to shareholders who are Black, or from other racial groups disadvantaged under the former apartheid system of white minority rule, in order to acquire a license.
However, Communications Minister Solly Malatsi on Friday proposed easing the requirement, prompting criticism from various political parties. The proposed change would allow Starlink and others to fulfill their empowerment requirements through things like investing in skills development and job programs and striking deals with local suppliers.
The minister put forward the directive days after South African President Cyril Ramaphosa met with U.S. President Donald Trump at the White House, when Trump made baseless claims that white South African farmers were being systematically killed, raising eyebrows.
A senior African National Congress lawmaker, Khusela Diko, questioned the timing of the directive and whether the country was bending over backward to accommodate Musk's Starlink satellite telecom business.
The Association of Communications and Technology (ACT), an industry body, said the proposed changes could usher in 'a new era' for the industry provided they are implemented consistently, fairly and openly.
'We advocate for smarter, scalable approaches that deliver meaningful impact and restore policy clarity, consistency, and investor confidence,' the ACT said in a statement.
On Tuesday, Malatsi, who belongs to the Democratic Alliance party, appeared before Parliament in Cape Town to defend the move and denied suggestions it was introduced specifically for Starlink.
Lawmakers questioned whether the directives were correctly opening up the playing field for foreign players or tampering with the government's economic empowerment agenda by catering to Starlink.
Musk has repeatedly denounced the Black ownership laws and said on social media that Starlink wasn't able to get a license to operate in South Africa because he was white. South African authorities say Starlink hasn't formally applied.
According to the Starlink website, the service in southern Africa is available in Eswatini, Mozambique, Botswana, Zimbabwe, Zambia, Malawi, Kenya and Madagascar.
Since Trump's inauguration, his administration is reported to have intervened on behalf of Starlink in Gambia, Lesotho and a few other developing nations, using the U.S. government's foreign policy apparatus to advance Musk's business interests.
After Trump threatened them with large tariffs, Lesotho approved Starlink for a 10-year license in April, just a week later.
Malatsi said the regulations would allow for more than one new operator to enter the market, boosting competition.
'We are not attempting to open a special dispensation for Starlink or any other company or an individual,' Malatsi told lawmakers, adding that work on the policy direction started around September, and was not prompted by the recent meeting between Trump and Ramaphosa.
'There is no conspiracy on our part with regard to this policy direction,' said the minister.
Stakeholders, industry players and the public have been given 30 days to send in submissions and provide comment before the framework is finalized.
Michelle Gumede, The Associated Press