SpaceX is pressing South African regulators to adopt alternative investment programs that would allow Starlink to operate in the country without adhering to existing Black ownership requirements.
In a formal submission to South Africa’s government, SpaceX proposed replacing the current mandate—requiring companies in the information and communications technology (ICT) sector to be at least 30% Black-owned—with equity-equivalent investment programs. Such a model, the company argues, would give international operators greater regulatory clarity while ensuring that money is directed toward infrastructure and community development.
“Equity equivalent investment programs will provide much-needed regulatory certainty and foster investment in infrastructure,” SpaceX said in its letter. “Uniform empowerment regulation will motivate both current and prospective operators to expand their business activities and network reach.” (via Bloomberg)
Similar exemptions have been granted in other industries. In 2019, South Africa allowed car manufacturers including BMW, Ford, and Toyota to create a transformation fund rather than surrendering ownership stakes. That initiative supported historically disadvantaged communities while enabling automakers to retain full control of their operations.
As part of its proposal, Starlink pledged to provide free high-speed internet to 5,000 rural schools, reaching approximately 2.4 million students. The company emphasized that it was not requesting preferential treatment, but rather urging the government to make equity-equivalent programs a standard option for all telecom operators.
“Starlink is not seeking any type of special treatment, as these changes would apply to all current and future potential operators,” the company stated.
South Africa’s Department of Communications and Digital Technologies has already asked the national regulator to explore alternatives that would enable telecom firms to invest in areas such as digital inclusion, local enterprise support, and research initiatives. Such flexibility could help the country expand connectivity while maintaining the goals of its Black Economic Empowerment (BEE) framework.
South Africa faces significant internet access challenges. According to government data, only 1.7% of rural households had internet access in 2023. Expanding coverage is central to the National Development Plan, which aims for universal broadband access by 2030.
The BEE rules were introduced after apartheid to address decades of exclusion of Black South Africans from the formal economy. While seen as essential to rectifying historical inequalities, the laws have also drawn criticism from investors. Musk, who was born in Pretoria, has previously described them as “openly racist.”
Starlink has already launched service in 17 African countries including Namibia, Botswana, and Mozambique.
