On December 16, 2025, Solly Malatsi, South Africa’s Minister of Communications and Digital Technologies, dropped a policy bomb: a directive to ICASA allowing Starlink to bypass the country’s 30% Black Economic Empowerment (BEE) ownership rule. It wasn’t just about satellite internet. It was about whether South Africa still believes in transformation—or if economic pragmatism has won the day. The move, dated December 15 and first reported by Daily Maverick, has ignited a firestorm across political, legal, and social lines. Here’s the thing: this isn’t a tweak. It’s a turning point.
The Legal Loophole That Wasn’t Supposed to Be There
Section 6 of the Electronic Communications Act gives ICASA the power to exempt satellite providers from BEE rules if they’re blocking investment. That’s the law. But Malatsi didn’t cite it. Not once. Instead, he leaned on vague language about "equity equivalent investment programmes," letting companies like Starlink meet BEE obligations through infrastructure donations instead of equity stakes. IRR Legal, a Johannesburg-based think tank, cheered. Gabriel Crouse, its executive director, said the directive "partly follows" their 2024 submission urging the government to stop letting race-based ownership requirements scare off investors. "The mission is to attract investment," Crouse said. "It doesn’t matter if the investor is Black, white, or from Mars—if they bring capital, they help South Africans." But here’s the twist: Parliament never intended this clause to be a backdoor for multinationals. It was meant for small satellite startups, not SpaceX’s global behemoth. And now, Crouse admits, Malatsi’s failure to explicitly invoke the law makes the whole thing look political. "His silence on the legal basis," Crouse added, "points to the reluctance of South African politicians to promote growth policies unambiguously. All delays have been, and remain, unnecessarily harmful to South Africans seeking opportunity."The Backlash: EFF Calls It a Coup
While IRR Legal sees opportunity, the Economic Freedom Fighters see betrayal. On December 14, 2025, the party, founded by Julius Malema, released a scathing statement calling Malatsi’s move "an unlawful overreach." They argue that by using a ministerial directive to rewrite BEE requirements, Malatsi is circumventing Parliament’s authority—and undermining ICASA, which reportedly raised legal concerns. "This isn’t flexibility," said EFF spokespersons. "It’s a stealth dismantling of decades of transformation policy." The EFF isn’t just angry—they’re preparing for war. They’ve vowed to challenge the directive in both Parliament and the courts. Their legal team is already drafting a case arguing that the ICT Sector Code and the BBBEE Act cannot be overridden by administrative fiat. "If we allow one multinational to bypass ownership rules," said EFF legal advisor Thandi Nkosi, "what’s to stop Amazon, Meta, or Google from demanding the same?"The Numbers Don’t Lie—But Whose Numbers?
The debate isn’t just about law. It’s about impact. Starlink has promised to connect 5,000 rural schools. Sounds impressive, right? But Daily Maverick reported that local mobile operators—companies already complying with BEE rules—are already committed to connecting over 22,000 schools. One anonymous source, identified only as "Diko," called Starlink’s narrative "a saviour narrative" designed to distract. "When you’re talking about 21 million South Africans without reliable internet," Diko said, "5,000 schools is a drop in the ocean. The real infrastructure is already being built—with local ownership." And then there’s the timing. Daily Maverick noted that a PR agency invited journalists to a fireside chat with SpaceX’s regional head, Ryan Goodknight, at the Africa Tech Festival—and sent the policy directive an hour before the government’s official WhatsApp announcement. Coincidence? Or a coordinated media play?The Presidency Weighs In—And It’s Not Neutral
On December 17, 2025, IOL reported that the Presidency had issued a quiet but firm statement: "We insist on Starlink’s legal entry into South Africa." The article quoted an unnamed official: "If a minister uses policy discretion to rewrite BEE ownership requirements, that is not flexibility but overreach. When executive authority..."—the quote cuts off, but the implication is clear. Even within government, there’s division. The Presidency isn’t backing Malatsi. It’s backing Starlink.
What This Means for South Africa’s Future
This isn’t just about internet access. It’s about the soul of South Africa’s economic policy. For 25 years, BEE was meant to correct historical imbalances by ensuring Black South Africans owned a stake in the economy. Now, the government is offering a new path: donate a satellite dish instead of selling shares. Is that equity? Or just PR? If ICASA grants the exemption, it sets a dangerous precedent. Next up? Telecom giants like Vodacom or MTN being asked to trade ownership for community Wi-Fi hubs. Or banks being allowed to skip BEE equity in exchange for funding entrepreneurship programs. The door is open—and it’s swinging wide. Meanwhile, 21 million people still don’t have reliable internet. The question isn’t whether Starlink can help. It’s whether the cost—eroding trust in transformation—is worth it.What’s Next?
ICASA has 30 days to respond. Legal challenges are expected by January. The National Assembly’s Portfolio Committee on Communications will hold an emergency hearing in early February. And if the courts rule against Malatsi, it could trigger a constitutional crisis over ministerial overreach. One thing’s certain: South Africa’s digital future won’t be decided by engineers or entrepreneurs. It’ll be decided in courtrooms and parliamentary chambers.Frequently Asked Questions
Can Starlink legally operate in South Africa without 30% Black ownership?
Legally, yes—if ICASA invokes Section 6 of the Electronic Communications Act, which permits exemptions when BEE requirements impede investment. But Malatsi’s directive doesn’t cite this provision, making the legality murky. ICASA has reportedly raised concerns, and the EFF plans to challenge the move in court, arguing that ministerial directives can’t override parliamentary law.
How does this affect Black-owned telecom companies?
It creates a two-tier system. Companies like Vodacom and MTN, which have spent years meeting BEE equity targets, now face competition from Starlink, which can bypass those requirements through infrastructure donations. This undermines the value of compliance and could discourage future Black entrepreneurs from entering the sector, fearing they can’t compete with foreign firms given preferential treatment.
Why is the Presidency supporting Starlink despite regulatory concerns?
The Presidency appears prioritizing rapid digital expansion over policy consistency. With 21 million South Africans lacking reliable internet, the government sees Starlink as a quick fix. But critics argue this short-term gain risks long-term damage to regulatory integrity and the credibility of BEE as a tool for structural economic change.
What alternatives to equity ownership are being proposed?
Malatsi’s directive allows "equity equivalent investment programmes," such as donating equipment, funding digital literacy programs, or building rural infrastructure. But experts warn these are harder to measure, audit, and enforce than direct ownership. Without clear benchmarks, they risk becoming symbolic gestures rather than meaningful economic empowerment.
Has this happened before in South Africa?
Not exactly. Previous BEE exemptions have been narrow and temporary—like allowing foreign mining firms to retain ownership during financial distress. But this is the first time a minister has sought to rewrite BEE rules for a major foreign tech player using a policy directive, not legislation. It’s unprecedented in scope and signals a potential shift in how South Africa treats foreign investment in critical infrastructure.
What’s the risk if this policy is upheld?
If courts uphold Malatsi’s directive, it could open the floodgates for other multinationals—Amazon, Google, Microsoft—to demand similar BEE exemptions. This would weaken the entire BEE framework, reduce Black ownership in strategic sectors, and erode public trust in transformation policies. The long-term cost? A digital economy that’s fast but not fair.