South Africa Considers BEE Reform to Welcome SpaceX and Global Satellite Internet Providers

In a landmark move that could reshape South Africa’s digital landscape, the government is fast-tracking a review of its Black Economic Empowerment (BEE) regulations to potentially allow global satellite internet giants—including Elon Musk’s SpaceX—to operate in the country without mandatory equity transfer.

The proposed policy shift, confirmed by Communications and Digital Technologies Minister Solly Malatsi, signals a pragmatic approach to bridging the nation’s stark digital divide while balancing the need for economic transformation.

Navigating Equity Requirements and Digital Inclusion

At the heart of the debate is South Africa’s requirement that companies operating in certain sectors must be at least 30% Black-owned. This rule, part of the Broad-Based Black Economic Empowerment (B-BBEE) framework, was designed to address historical economic disparities rooted in the apartheid era.

But for international tech firms like SpaceX, which provides high-speed internet via its Starlink low-earth orbit satellite constellation, such equity conditions have been a deal-breaker. Elon Musk, himself South African-born, has been vocal in his criticism, labeling the regulation “openly racist.”

Now, the Department of Communications and Digital Technologies is weighing an alternative: so-called equity-equivalent programs. Under this model, companies could fulfill their empowerment obligations by investing in digital infrastructure, skills development, or community internet access programs rather than diluting ownership.

Over 19,000 Public Submissions Reflect High Stakes

Minister Malatsi revealed that the department has received a staggering 19,000 public comments on the proposed regulatory amendment—a clear indication of how deeply the issue resonates with South Africans from all walks of life.

“We are prioritizing it; you cannot sit on submissions,” Malatsi stated in an interview in Johannesburg. “Once done, and based on the sentiment, we can make a submission to Icasa to make the final decision.”

The Independent Communications Authority of South Africa (ICASA) will have the final say, but the minister’s comments suggest a leaning toward flexibility, especially given the country’s urgent need to expand internet access.

Why Satellite Internet Could Be a Game-Changer

For millions of South Africans, particularly in rural and underserved regions, reliable internet remains a distant dream. According to Statistics South Africa’s 2023 survey, a mere 1.7% of rural households have internet access. This isn’t just about convenience—it’s about access to education, healthcare, economic opportunity, and participation in the digital economy.

Satellite internet, especially low-earth orbit (LEO) systems like Starlink, promises to bypass the need for extensive ground infrastructure. It can deliver high-speed broadband to remote areas where laying fiber or building cell towers is economically unviable.

If approved, the regulatory amendment wouldn’t just benefit SpaceX. Other global players from the U.S., Asia, and the UAE—as well as local telecom giants like MTN and Vodacom—could also leverage the new framework to accelerate network rollout and service innovation.

Learning from Other Sectors: The Automotive Precedent

This isn’t the first time South Africa has introduced flexibility into BEE requirements. The automotive industry, for example, has long operated under similar equity-equivalent schemes. In 2019, major manufacturers including BMW, Ford, and Toyota established a fund aimed at integrating historically disadvantaged groups into the auto value chain—without requiring direct equity surrender.

That model is now being eyed as a template for the tech and telecom sectors. If applied, it could unlock billions in investment toward digital public goods—think community Wi-Fi hotspots, tech incubators, subsidized devices, or even coding bootcamps in townships and rural schools.

Minister Malatsi noted that preliminary feedback on the proposal has been largely positive. “The government would be naive not to embrace new technologies—and in particular satellite technologies—to increase South Africa’s broadband connectivity,” he emphasized.

The Road to 2030: Universal Broadband Access

South Africa’s National Development Plan aims to achieve 100% affordable broadband coverage by 2030. That goal is looking increasingly ambitious—but not impossible—with the right regulatory enablement and technological adoption.

Introducing satellite internet competition could also drive down prices. South Africa has some of the highest data costs on the continent, a pain point that has triggered public protests and regulatory scrutiny in recent years.

Whether Starlink or other satellite providers can offer cheaper alternatives remains to be seen, but increased competition rarely hurts consumers.

Balancing Transformation and Investment

Critics of the proposed amendment worry that watering down equity requirements could undermine the broader mission of economic redress. BEE policies, however controversial, were crafted to ensure that South Africa’s wealth—including in emerging sectors like tech—is shared more equitably.

Proponents argue that the benefits of universal internet access—job creation, e-commerce, remote work, and digital literacy—could do more for inclusive growth than ownership quotas alone. It’s a classic development dilemma: structural reform versus pragmatic compromise.

What’s clear is that the status quo isn’t working for the millions still offline. If South Africa is serious about its 2030 connectivity targets, it will need every tool in the box—including regulatory innovation.

What’s Next for SpaceX and Other Providers?

SpaceX has already submitted its support for the regulatory change. Should ICASA approve the amendment, the company could rapidly deploy services in South Africa, joining a growing list of African nations where Starlink is already available.

But the company won’t be alone. Other satellite internet providers, from Amazon’s Project Kuiper to OneWeb and emerging regional players, are also closely watching the policy review. South Africa represents one of the most strategic markets in Africa—a gateway to the continent with a relatively advanced economy and high digital potential.

For Minister Malatsi and the ruling administration, the decision is as much about economics as it is about ideology. In the end, it may come down to a simple question: is it better to have 30% of nothing, or 0% of something that could connect a nation?

As the policy review enters its final stages, all eyes are on Pretoria and ICASA. One thing is certain: the outcome will shape South Africa’s digital future for decades to come.

Source: BusinessTech South Africa