Did Musk's Starlink BEE sting suit him up to fight with SA?

Elon Musk’s efforts to launch Starlink in South Africa have so far faced significant hurdles, leading to tensions between Musk, the US and the South African governments. These tensions stem primarily from the regulatory requirements for 30% local ownership policy aimed at redressing racial inequalities.

 Political analyst Joe Mhlanga said that the US head of Department of Government Efficiency (Doge) may have been angered by his failure to force the Independent Communications Authority of South Africa (Icasa) to scrap the rules requiring 30% BEE shareholding ownership policy aimed at redressing racial inequalities.

“He is a businessman, who happened to be deeply involved in the politics of the most powerful nation in the world, the US. We all know he has more money than every living thing on earth. After Trump emerged, Musk knew the power he now wields, and he never forgot about his business aspirations to have Starlink operate in this country.

“It is shocking how they want to own 50% of TikTok in that country but refuse when South Africa makes its fair BEE regulatory laws, Musk unleashed his political influence to isolate the county and punish it for its laws."

Mhlanga felt that Musk will use his influence to strengthen his business empire around the world.

Starlink is an LEO satellite internet constellation operated by Musk’s SpaceX. It provides satellite internet access coverage to over 60 countries. SpaceX began launching Starlink satellites in 2019.

Local Ownership Requirement

SpaceX has openly criticised South Africa’s 30% local ownership policy, arguing that it is a barrier to entry for foreign satellite operators like Starlink. The company maintains that its global policies prohibit local shareholding, making compliance impossible.

Space Withdrawal

Failing to have his way, Musk’s SpaceX withdrew from regulatory hearings regarding its satellite services licensing framework after SpaceX failed to attend a scheduled presentation, signalling a growing rift between the company and South African regulators.

While Musk failed to gain traction in South Africa, he donated millions of dollars to fund US President Donald Trump's campaign to return to the White House.

After Trump successfully defeated Democrats to return as President, Musk started flexing his muscles, criticising South Africa’s BEE policies and the new Expropriation Act, describing them as “openly racist".

This was followed by Trump’s baseless statements, coupled with disinformation to freeze aid to the country and fuel political tensions between the two nations.

In response, the Association for Communications and Technology (ACT), a South African industry body, has urged ICASA to maintain fairness in its regulatory approach, cautioning against tailoring satellite regulations solely to accommodate Starlink.

ACT, which includes Vodacom, MTN, Cell C, Telkom, Liquid Intelligent Technologies, and Rain, said that it advocates for a more holistic overhaul of satellite regulations rather than changes that would exclusively benefit Musk’s company.

The ACT's head of industry research, Phila Sithole, said Icasa had not clarified the reason for instituting the inquiry for a new licensing framework for satellite services, raising concerns about its intentions.

"There is a need for fairness in the licensing regime to achieve a holistic sector transformation. ACT advocates for a level playing field, a technology-neutral approach, and a competitive market," Sithole added.

“We appreciate the review; however, the process of the review approach is what we do not agree with; it might tilt the market and give others an advantage," he explained. 

The South African government is facing a severe political and economic crisis, balancing the potential benefits of Starlink’s satellite internet service with the need to adhere to its BEE policies, while Starlink could improve internet access and stimulate the economy, offering preferential treatment to Musk might spark a political backlash.

Satellite broadcaster MultiChoice has already requested to be excluded from the ongoing discussions regarding the proposed licensing framework for satellite services.

According to Connecting Africa, the company said it doesn't believe that existing fixed satellite services (FSS) or broader satellite services (BSS) should be included and questioned how the proposed framework discussions will affect satellites that are already in orbit and operational 

“As we know, satellite services aren't new in South Africa, which we are already licensed under. In particular, if you look at direct-to-home services, we have used spectrum in FSS and BSS bands for decades; these issues don't relate to FSS and BSS services. So, we propose you leave us out of this," said Bevan Bates, senior engineer at MultiChoice Group.

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