TLDRs;
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- Starlink plans to invest $112.7 million (2 billion rand) in South Africa to secure an internet operating license.
- The company aims to finalize approval before the G20 summit in Johannesburg this November.
- South Africa’s Black Economic Empowerment (BEE) rules require local Black ownership, posing a regulatory challenge.
- Government officials may consider flexible compliance paths to balance economic transformation with foreign investment.
Starlink, the satellite internet division of Elon Musk’s SpaceX, is preparing a major push into South Africa with a $112.7 million investment plan as it races to secure an operating license before the G20 summit in Johannesburg this November.
The proposed investment, equivalent to 2 billion South African rand, signals the company’s strategic intent to anchor its Southern African operations in the region.
South Africa to Anchor Starlink’s Africa Expansion
The funding is expected to support infrastructure development across the 16 countries within the Southern African Development Community.
Notably, Starlink plans to collaborate with local firms on key areas such as land leasing, fiber deployment, energy sourcing, and system maintenance. South Africa’s central position makes it an ideal launchpad for regional connectivity, particularly in underserved areas where traditional internet infrastructure remains limited.
Empowerment Regulations Pose Licensing Hurdles
Despite the investment commitment, Starlink’s South African launch hinges on navigating the country’s Black Economic Empowerment (BEE) policies. These rules require telecom applicants to have Black equity partners, a point of contention for many global firms.
Elon Musk has previously criticized the rules, calling them “openly racist,” though Starlink has signaled its willingness to negotiate terms with local stakeholders.
The South African government is reportedly weighing alternative compliance routes that still align with transformation goals. One proposal involves allowing companies to meet empowerment targets through infrastructure projects or partnerships with Black-owned service providers, rather than through direct shareholding. If adopted, this shift could create a more attractive path for international players in strategic sectors like telecommunications and space-based internet.
Starlink Deal Could Shift Investment Policy
This licensing bid has become a high-profile test case for South Africa’s ability to balance equity with innovation. In 2023, the country drew just $2.7 billion in foreign direct investment, well below the levels seen in other BRICS economies.
That said, a successful Starlink deal could open the door for similar tech ventures while reaffirming the country’s commitment to digital transformation.
Starlink’s success in India earlier this month, where it secured an operating license after high-level discussions with government officials, highlights the company’s ability to navigate complex regulatory environments. India’s approval came after years of tight restrictions on satellite operators, showing that policy flexibility can open doors for global players.
