New B-BBEE policy direction 'not giving Musk’s Starlink special dispensation’ amid MPs' calls for its removal

27 May 2025

Communications and Digital Technologies Minister Solly Malatsi’s appearance before Parliament follows his publication of a policy direction for public comment that could potentially allow South Africa-born tech billionaire Elon Musk’s Starlink internet service provider to operate in the country without ceding ownership. While the policy direction doesn’t mention Starlink by name, the timing of its publication is key.

Minister Malatsi says the recent publication of a policy directive that could significantly alter the way South Africa regulates empowerment in the information and communication technology (ICT) sector was not giving Elon Musk’s satellite internet service provider “special dispensation”.

“We are not attempting to open a special dispensation for Starlink or any other company or an individual,” Malatsi told the committee.

But several MPs remained unconvinced. ANC MP Shaik Subrathie said the ANC called for the “withdrawal” of the proposal. MK MP Colleen Makhubele asked when Malatsi would be reversing this “illegal and unlawful regulation”. And EFF MP Sixolisa Gcilishe said the party would challenge “this unconstitutional proposal” in Parliament and in the courts.

“We are not about to accept a situation where our laws are rewritten in Washington,” she said.

Malatsi’s appearance before Parliament follows his publication of a policy direction for public comment that could potentially allow South Africa-born tech billionaire Elon Musk’s Starlink internet service provider to operate in the country without ceding ownership.

Read more: Explainer: Malatsi clarifies B-BBEE policy direction. You don’t have to sell shares, but you do have to buy in

While the policy direction doesn’t mention Starlink by name, the timing of its publication is key.

It follows President Cyril Ramaphosa and US President Donald Trump’s face-to-face meeting in Washington last week. Pretoria had been negotiating a workaround that would overcome Musk’s opposition to South Africa’s BEE ownership before Ramaphosa’s visit to the White House, as it sought to improve strained relations with the US and reach a trade deal, according to a Bloomberg report.

The publication reported Pretoria was expected to offer the deal to Musk at a meeting on Tuesday, 20 May 2025, the day before Ramaphosa’s meeting with Trump. But Ramaphosa, at a press conference after the meeting between the leaders, said the issue of Starlink was not discussed. Musk has criticised the country’s BEE policies ad nauseam, accusing South Africa of having “openly racist ownership laws”.

The proposed policy direction gazetted by Malatsi’s department on Friday, 23 May, provides communications licence applicants with a workaround to rule in the Electronic Communications Act (ECA) that requires licence holders to be 30% owned by historically disadvantaged groups.

This is the main barrier that has prevented Starlink from applying for a licence to operate in South Africa, as it does not comply with the rule, according to a News24 report.

We are not about to accept a situation where our laws are rewritten in Washington.

However, the direction makes it clear that companies will not be exempt from contributing to South Africa’s transformation agenda.

“New market entrants — including those offering new or disruptive technologies — will not be exempt from transformation obligations. Even if companies are not rolling out large-scale infrastructure, they will be required to make commitments that are substantive and clearly aligned with South Africa’s socioeconomic goals.

“Different technologies may have different rollout models, but transformation is non-negotiable — all players must contribute meaningfully to equity, skills development, and economic inclusion,” reads the policy direction.

Read more: After the Bell: Who’s afraid of Elon Musk?

The proposal immediately drew the ire of the chairperson of the Portfolio Committee on Communications, Khusela Diko (ANC), who, in a post on X, accused it of being a “spectacular mess-up of process and glaring invitation for litigation”.

If I didn’t know better I would be convinced that the South African government really wants to keep #Starlink out of this country.

In all my thinking life, I have never seen a more spectacular mess up of process and glaring invitation for litigation. From what can easily be…

— Khusela Diko?? (@KhuselaS) May 23, 2025

Diko invited Malatsi to appear before the committee on Tuesday, to explain the proposed policy direction.

“We thought that it was important to invite the minister to brief the committee on these directives for a number of reasons.

“One, we need to make sure that the minister, at all times, exercises his executive power in a rational manner; in a lawful manner. And second, it seemed quite curious to some of us… the timing of the directives… as all this was happening the president was in the White House where discussions were expected to ensue relating to issues such as the licensing of Starlink,” said Diko.

‘Was a deal cut in America?’

Subrathie said that the ANC would not “support this policy directive — actually, we will call for its withdrawal”.

“This matter has indeed gained a great amount of attention from South Africans and internationally, largely because this concerns the wealth of the land of South Africans — the Freedom Charter says very clearly that the people shall own the wealth of this land.

“Alternative equivalent to ownership speaks exactly against that principle,” said Subrathie. He added that it also went against the principle in the Government of National Unity’s (GNU) Statement of Intent — “to which the honourable minister and his party are signatories to” — to promote social justice and equity.

Read more: Parliament summons Malatsi over controversial B-BBEE policy direction

Subrathie said the leadership of the ANC had met on Monday, 26 May, and had been asked whether any deal was “cut” in the US. The party was clear that “there was no deal cut clearing the path for any Starlink regulations”, according to him.

“The African National Congress is clear. Our laws are sacrosanct — there is no backdoor to gaining entry. Anyone wanting to gain entry into this country, especially into the ICT sector — which is a sector that is most disadvantaged — must come to the front door,” said Subrathie.

He asked Malatsi whether the DA had had “any conversations” with Musk.

“While the minister has gone to pains to indicate that this is coincidental, I think South Africans need a very clear answer…”

Malatsi later said the public discourse, or “conspiracy”, around him being a DA Minister who was allowed to “make special dispensation for any interested businesses to operate” in South Africa, “could (not) be further from the truth”.

Process of consulting

He said the process of consulting with the Independent Communications Authority of SA (Icasa) around easing BEE regulations in the ICT sector for multinational companies began long before Ramaphosa’s visit to Washington.

“In previous engagements that we’ve had with the committee going as far back as last year, we’ve indicated the efforts from the departments around the full recognition of equity equivalent investment programmes in the ICT sector… This work predates the events of last week; last week was the third layer of that process culminating in the gazette,” said Malatsi.

“I want to be clear, it’s not about introducing a dispensation for any individual, nor any company or introducing preference,” he said, adding that the department had begun work on the policy direction in September 2024.

“The policy direction refers specifically to the ICT sector codes that were published under the prescripts of the B-BBEE Act, which we know was adopted in 2013. So the intention is to ensure there is a whole and consistent application of the B-BBEE Act and the ICT sector codes… to ensure that transformation takes place in the telecommunications sector — in the broadcasting sector — in the same way that is applicable in other sectors through the enablement of broad-based economic empowerment,” he said.

He further emphasised that the stage at which the policy direction was at now “is not definitive”, as it had been published for public comment.

“This policy direction isn’t final yet. Public comments are open for 30 working days. But once enacted, it gives Icasa the political and legal backing to update its ownership regulations and explicitly allow Equity Equivalent Investment Programmes-based compliance,” Daily Maverick’s Lindsey Schutters reported.

“It’s not definitive because it must also take into consideration what all the inputs that are going to be submitted are going to be.” DM

Categories:

Tags:

DM is much better if you are signed in...

South Africa

‘Was a deal cut in America?’

Process of consulting