19th December 2024 Minister Solly Malatsi is set to change the way multinational companies like Starlink can get licensed in South Africa and still contribute to BEE efforts. This is through a process where Starlink invests in local companies that have black ownership instead. If all goes well, Starlink could launch locally around the second half of next year. In October, Digital Tech Minister Solly Malatsi said that multinational companies, due to “the global nature of their operations,” may not be able to “comply with equity ownership requirements” to get licenses to operate in South Africa. He was talking about Starlink even though he didn’t mention the American satellite internet provider by name. Instead, Malatsi is looking to launch a change in policy early next year that will “provide an avenue for factoring in alternative ways for companies to make an impact on South Africa’s socioeconomic development.” This workaround for equity ownership requirements, that a telecom firm must have 30 percent ownership from historically disadvantaged ethnic groups, is called “equity equivalents.” “Equity Equivalent may also entail a programme targeting investment or any other programme that promotes Socio-Economic advancement/ development within the South African Economy,” reads the South African government’s Codes of Good Practice. This means that Starlink can get passed the Black Economic Empowerment (BEE) requirement if they invest money in local companies that do have historically disadvantaged group ownership. That’s where the “equivalent” comes from. “The value of these Equity Equivalent contributions may be measured against 25% of the value of the Multinational’s South African operations or may be measured against 4% of the Total Revenue from its South African operations annually over the period of continued measurement,” the codes continue. This is how Malatsi will get ICASA to license Starlink in South Africa with the hopes of the provider launching locally in the latter half of 2025. However there is one final question that is posed here. Will Starlink accept this workaround seeing as its their money on the table? The answer is… Probably. Especially if SpaceX thinks South Africa is a lucrative enough market for Starlink. SpaceX is now looking to invest $1.5 billion in Vietnam in efforts to clear a similar stall in talks to get Starlink launched in the Asian nation, which could be a huge market for the unique internet services it provides given the mountainous and difficult to traverse terrain that comprises large swathes of the country. If unsquandered from corruption, local investments from foreign corporations are good for the South African economy and were one of the key topics in the conversation between SpaceX owner Elon Musk and President Cyril Ramaphosa in September. advertisement