Malatsi proposes policy shift for Starlink to operate in SA

The proposed amendment is part of the government's efforts to ease regulatory barriers that have prevented Elon Musk’s Starlink internet service from operating in South Africa.

A major policy shift could soon allow Starlink and similar satellite services to legally operate in South Africa without having to meet the  30% Black Economic Empowerment equity ownership requirement.

 Malatsi says the regulation amendment aims to allow multinational companies to meet empowerment goals through equity equivalent investment programmes.

The changes come just after President Cyril Ramaphosa left the USA after his historic meeting with US President Donald Trump.

Last week, Bloomberg News reported that South African officials held a late-night meeting on Tuesday with the South African-born billionaire to discuss the Starlink deal.

Under the new regulations, foreign operators could invest in broadband infrastructure, technology training, or rural connectivity programmes instead of giving away equity.

"The objectives of this policy direction are to give effect to existing national and sector policy pertaining to the rollout of broadband and the bridging of the digital divide,” the department said in its gazette.

"In addition, the Mmnister wishes to give effect to the objectives of the Act, including the objectives to encourage investment, including strategic infrastructure investment, and innovation in the communications sector;  promote competition within the ICT sector and promote, facilitate and harmonise the achievement of the objects of legislation related to the Act.

"To accomplish these objectives, it is necessary for regulatory certainty and consistency to apply to members of the ICT Sector, including the holders of licences under the Act. Consequently, there is a need to harmonise the requirements and provisions of the Act with other legislation that applies to the recognition of ownership of members of the ICT Sector, including the Amended Broad-Based Black Economic Empowerment (B-BBEE) ICT Sector Code.”

Malatsi said the proposed policy direction promotes investment, competition, and universal broadband access, with a focus on bridging the digital divide and growing South Africa’s GDP.

"World Bank research shows that, on average, every 10% increase in broadband penetration results in 1.21% GDP growth in middle-income countries such as South Africa. Broadband access makes it easier for people to start businesses, grow businesses, seek employment, work remotely, and market goods and services.

"Giving millions of South Africans access to broadband would therefore constitute one of the biggest empowerment programmes the South African government has ever undertaken," he wrote.

Malatsi said the change will uphold the spirit of transformation and unlock investment in broadband access, especially in poor and remote communities.

"The focus of this policy direction is on lowering regulatory hurdles to investment in reliable broadband and ensuring access to the internet. This is in line with the Broad-Based Black Economic Empowerment Codes of Good Practice, which recognise that the global nature of multinational corporations’ operations may constrain their ability to comply with equity ownership requirements.

 "Policy clarity on the recognition of equity equivalent investment programmes has long been sought by multinational operators in the ICT industry. This will provide the certainty necessary to attract increased investment in ICT and accelerate universal internet access," he said.

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