Ramaphosa Prioritizes Internet Connectivity Over Compliance in Starlink BEE Debate

President Cyril Ramaphosa has made it clear that he prioritizes improving internet connectivity in South Africa over strict compliance to current Black Economic Empowerment (BEE) ownership rules, especially in the ongoing Starlink BEE debate. He supports Communications Minister Solly Malatsi’s proposal to introduce Equity Equivalent Investment Programmes (EEIPs) as an alternative to the existing requirement that telecommunications companies must have 30% ownership by historically disadvantaged groups (HDGs) to operate nationally.

This move aims to allow global companies like Elon Musk’s Starlink to enter the South African market by meeting empowerment obligations through investments in infrastructure, skills development, or digital inclusion projects instead of direct equity ownership. Ramaphosa described this approach as “innovative” and “unique,” emphasizing that it aligns with South African laws and is not designed to favor any single company, including Starlink.

The current BEE rules, established under the Broad-Based Black Economic Empowerment Act of 2003, were created to address apartheid-era inequalities by ensuring local ownership by disadvantaged groups. However, these strict ownership requirements have posed challenges for multinational companies wanting to invest in South Africa’s telecommunications sector. Starlink, which offers satellite internet services, has been unable to launch in South Africa because it does not meet the 30% local ownership rule.

Ramaphosa prioritizes internet connectivity over compliance

Starlink has proposed investing around R500 million to provide free high-speed internet to over 5,000 rural schools, potentially benefiting 2.4 million students and helping to close South Africa’s digital divide, where many rural areas still lack reliable internet access. This aligns well with the goals of EEIPs, which focus on broader economic contributions beyond ownership.

Despite Ramaphosa’s support, the proposal has sparked intense political debate. Opposition parties, such as the Economic Freedom Fighters (EFF), accuse the government of favoring foreign capital at the expense of local empowerment and have vowed to fight the changes in Parliament, courts, and public protests. Some members of the ruling African National Congress (ANC) have also expressed concerns that the timing of the reforms appears to prioritize Starlink over South African empowerment goals.

The Independent Communications Authority of South Africa (Icasa), the country’s telecom regulator, has not yet received a formal license application from Starlink and maintains that all companies must comply with existing regulations. Icasa’s rules currently do not fully accommodate EEIPs, meaning regulatory changes and public consultations will be necessary before Starlink or similar companies can operate legally. Experts estimate this process could take two years or more.

Ramaphosa has stressed that the government remains committed to economic transformation and that BEE is essential for inclusive growth. He rejected claims that the reforms were made specifically for Starlink or due to external pressure following his recent meeting with U.S. President Donald Trump. Instead, he framed the EEIP proposal as a way to modernize South Africa’s telecommunications laws and attract investment while still addressing historical injustices.

Ramaphosa prioritizes internet connectivity over compliance with rigid ownership rules in the Starlink BEE debate, supporting a flexible approach that encourages foreign investment and digital inclusion while aiming to maintain South Africa’s transformation goals. The debate highlights the challenge of balancing innovation with social justice in a changing economic landscape.

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