After Musk's criticism, South Africa paves way for Starlink's entry

By John Eligon & Zimasa Matiwane 

South Africa’s president, Cyril Ramaphosa, has been vocal about his desire to see his country’s wealthiest son, Elon Musk, invest some of his billions at home. 

But his overtures have been stymied by Musk’s criticism of the South African government as racist. Musk has argued that a law requiring foreign firms to sell ownership stakes to Black people — or others who faced discrimination during apartheid — is discriminatory and prevents his satellite internet provider, Starlink, from operating there. 

Now, a South African official is paving the way for Starlink, and other similar providers, to operate in the country through an alternative to the requirement of Black ownership. 

The official, Solly Malatsi, who oversees the country’s telecommunications, has said that he is finalising a directive that would allow satellite internet companies to obtain licenses by investing in disadvantaged communities, rather than by selling equity in their firms. 

The directive would still need to go through a public consultation process with the Independent Communications Authority of South Africa, which regulates the telecommunications industry, before going into effect. 

Malatsi’s political opponents say that providing an alternative to Black ownership would undermine efforts to undo racial disparities cemented during apartheid. They accuse him of trying to appease Musk, who was born and raised in South Africa but has rarely returned since moving away as a teenager. 

“The minister is seeking to cut corners and erode hard-won transformation goals,” Khusela Sangoni Diko, the chairwoman of the parliamentary committee overseeing telecommunications, said in a statement this week. 

She added that several other satellite operators are also interested in investing in South Africa and are willing to comply with the existing rules, so “there is no need for overreliance and obsession with a single satellite provider.” 

But Malatsi has insisted that he is making the change to spur economic growth by attracting a variety of companies, not just Starlink. 

To attract foreign companies, most other industries in South Africa already allow alternatives to Black ownership, known as “equity equivalents.” The equivalents “have been instrumental in attracting much-needed investments in areas such as the automobile sector,” Malatsi said. 

The rules about Black ownership were created after the end of apartheid 30 years ago in an effort to economically uplift Black South Africans, who were largely prohibited from owning major companies under the white-minority government. 

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