South Africa Plans to Ease B-BBEE Rules to Attract Foreign Satellite Firms like Starlink

In an unprecedented move, the South African government is revising its Broad-Based Black Economic Empowerment (B-BBEE) policies to facilitate the entrance of foreign satellite service companies into the local market. This policy reform, spearheaded by Communications and Digital Technologies Minister Solly Malatsi, primarily targets high-profile firms such as Elon Musk’s Starlink, which has faced entry barriers due to the stringent local ownership requirements currently in place.

Under the new framework detailed in a recent Government Gazette, international corporations will be able to meet their B-BBEE obligations through alternative means. These include investments in local education, promotion of skills development, enhancing job opportunities, and bolstering infrastructure, rather than through conventional equity stakes in South African entities.

This strategic shift is designed to encourage much-needed foreign investment in South Africa's burgeoning telecommunications sector. Minister Malatsi emphasized that the adjustment aims not only to simplify market entry for multinational companies but also to maintain the integrity of the country’s transformation objectives. This approach seeks to strike a balance between opening the market to international players and adhering to the socio-economic enhancement goals that the B-BBEE framework aims to achieve.

The government’s proposal will align the Electronic Communications Act (ECA) with a larger legislative framework to enable these alternative ownership models. This harmonization promises to enhance broadband access across the nation, bridging the digital divide, and fostering robust competition within the telecommunications industry.

Public input on this policy shift is crucial, as stakeholders are given a 30-day window ending on June 22, 2025, to express their views or concerns regarding the new guidelines. This period of commentary underscores the government’s commitment to a participative policymaking process.

However, the proposal has sparked opposition from the Economic Freedom Fighters (EFF), who argue that it lets international corporations bypass critical B-BBEE norms. The EFF criticizes the policy as a compromise on transformational goals, influenced unduly by international interests, including those of figures like Elon Musk.

This development marks a critical juncture for South Africa’s telecom sector and its broader economic empowerment landscape. As the deadline for public comments approaches, the nation anticipates possible adjustments to the policy based on stakeholder feedback.