BATTLE OVER STARLINK IN SOUTH AFRICA
- BEE NEWS
- 3 days ago
- 3 min read
Daniel Puchert | 10 April 2025
The chairperson for Parliament’s Portfolio Committee on Communications and Digital Technologies, Khusela Diko, has voiced her discontent with Minister Solly Malatsi’s efforts to introduce equity equivalence investment programmes (EEIPs) in the telecommunications sector.
In a statement posted to Twitter/X, Diko said that Malatsi is mounting an offensive against South Africa’s transformation laws by seeking to bypass the Electronic Communications Act in favour of business interests.
“Minister Malatsi should know that when it comes to transformation in the ICT sector, the law is clear on compliance and that cutting corners and circumvention is not an option — least of all to appease business interests,” Diko said.
“It appears his proposed directives and regulations are an attempt to undermine empowerment legislation by stealth and, should this be found to be the case, they will be fiercely opposed.”
Diko is referring to Malatsi’s recent plans to introduce policy directives to encourage competition through international investment in South Africa’s telecommunications sector.
These policy directives, taking the form of EEIPs, would overcome regulatory hurdles for telcos entering South Africa, which require 30% black ownership.
Equity equivalence programmes involve foreign companies investing in local infrastructure, skills development, and enterprise support, thus positively contributing to South Africa’s economic empowerment goals.
MyBroadband learned in November 2024 that Malatsi was in talks with Icasa to encourage the creation of an EEIP for multinational telcos.
Malatsi responded to Diko in a statement arguing that EEIPs are permissible by law in South Africa and “have been the source of major investments in our economy, including in sectors such as the automobile industry.”
“Recognising their potential, the government’s Medium-Term Budget Plan, formally approved by Cabinet, has adopted the introduction of EEIPs in the Information and Communications Technology sector,” he added.
Diko also claims that Malatsi’s fixation on EEIPs is to specifically encourage Starlink to enter South Africa.
Starlink, owned by Elon Musk, uses low-earth orbiting (LEO) satellite technology to provide Internet connections in even the most remote areas. So far, the service is available in 19 African countries.
“If he’s unhappy with the 30% equity ownership rule, then he must seek an amendment of the law. He will have to explain why he would want to do that for a single company,” Diko told the SABC.
“We have a problem with the fact that there seems to be an obsession with Starlink in particular, and this is a matter that’s been raised in the portfolio committee.”
Malatsi’s spokesperson recently said that Starlink’s entrance into South Africa would help to increase competition and lower data prices.
The SpaceX-owned company had initially planned to launch in February 2021, but these plans were soon put on ice around the time Icasa’s ownership regulations were announced a month later.
Although SpaceX never confirmed that this regulatory change caused it to halt its South African plans, well-placed industry sources said they were the reason Starlink deprioritised the country.
President Cyril Ramaphosa met with Elon Musk in September last year to discuss investment in South Africa, a month after it was announced that Starlink was in talks with the South African government.
SpaceX then suggested to Icasa, during public consultations for new regulations on satellite broadband systems, that it should consider implementing equity equivalent programmes similar to those in other industries.
This confirmed that SpaceX considered local ownership requirements an obstacle to launching Starlink in South Africa.
Diko argued that several companies from China, Russia, and Europe have indicated interest in South Africa and are making inquiries with Icasa about bringing satellite connectivity to the country.
She also noted that Starlink recently concluded an agreement in India that required the company to form a local partnership with two dominant service providers.
“The point is that you cannot then have one company that hold us ransom demanding that we reverse our transformation goals, which you know are very important in this country,” she said.
Despite their ongoing disagreements, Diko says that she has a “very productive, friendly, and cooperative relationship with the Minister.”
‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’.