The Department of Communications and Digital Technologies gazetted a proposed policy direction to the Independent Communications Authority of South Africa (Icasa) intended to clarify regulations on broad-based black economic empowerment, including the formal recognition of equity equivalent investment programmes. High data costs and limited infrastructure have made a comprehensive regulatory review necessary, according to government statements.
Minister Malatsi Denies Favoritism Toward Starlink
“We are not attempting to open a new dispensation for Starlink or any other company or individual,” Malatsi told parliament’s portfolio committee on communication. “We are saying that the regulations in our sector must consistently make provisions for the two choices that exist in any other sector.”
Solly Malatsi, Communications and Digital Technologies Minister
Under current rules, telecommunications companies must allocate at least 30 percent equity to historically disadvantaged people to secure individual network and broadcasting service licences. South African-born entrepreneur Elon Musk has not met those direct ownership requirements, keeping Starlink unlicensed in the country. The newly proposed directive introduces equity equivalent investment programmes, allowing multinational corporations to fulfill empowerment criteria through infrastructure development, supplier support, digitization, and skills training instead of ceding direct equity.
Political Division and Regulatory Scrutiny in Parliament
The timing of the policy announcement drew intense political debate, arriving shortly after a South African delegation traveled to Washington to engage with U.S. officials, during which business leader Johann Rupert reportedly suggested the country needed Starlink to combat crime. Although President Cyril Ramaphosa denied discussing Starlink during those talks, members of the parliamentary communications committee questioned the government’s motives.
Portfolio committee chairperson Kusela Diko noted that other major telecommunications providers established operations in South Africa without requiring changes to empowerment regulations. Meanwhile, African National Congress MP Oscar Mathafa voiced sharp opposition, warning that the policy shift could erode black economic empowerment within one of the nation’s least transformed industries.
Economic Freedom Fighters representative Sinawo Thambo criticized the department for using the term “alignment” to mask legislative changes, questioning why rules should be relaxed for a satellite provider that complies with strict ownership mandates in markets like India and Taiwan. Malatsi countered that the policy initiative originated in September and aligns with Icasa’s exploratory findings regarding modern empowerment codes.
Financial Pressures Behind Starlink’s Global Push
While regulatory debates continue locally, financial disclosures from a public S-1 filing detail the economic pressures facing SpaceX and its connectivity arm. Starlink achieved a 120 percent jump in annual revenue, reaching $4.42 billion in 2025 compared to $2 billion in 2024, driven by an aggressive global expansion that added 35 new countries and 4.6 million customers.
Despite that rapid growth, financial indicators reveal mounting operational costs and slowing metrics across units. SpaceX space operations posted a $662 million loss in the first three months of 2026, while artificial intelligence operations lost $2.47 billion during the same period. Starlink generated $1.19 billion in revenue in the opening quarter of 2026, marking a modest 19 percent increase over the $1 billion recorded in the first quarter of 2025.
Average revenue per user for the satellite service declined from $86 in early 2025 to $66 in early 2026, pointing to potential market saturation as expansion efforts encounter diminishing returns. Analysts observing the financial disclosures suggest that securing additional subscribers in remaining territories like South Africa has become increasingly urgent for maintaining growth figures ahead of an anticipated public offering valued near $1.75 trillion.
Next Regulatory Steps and Market Impact
Following the department’s gazette notice, Icasa is set to conduct a six-month market study to evaluate sector competition and investigate methods for lowering network tariffs. Malatsi emphasized that the regulator retains autonomy over licensing frameworks.
/file/dailymaverick/wp-content/uploads/2025/05/Readiness-Report-Article-Thumbnail-EP3.jpg "Photo: dailymaverick.co.za")
“In the end Icasa regulations may continue, if the regulator so chooses, to require 30% equity ownership by historically disadvantaged individuals but what it must do is to permit the commitments that are envisaged and articulated for in the ICT sector codes around valid conditions for application for individuals licenses.”
Solly Malatsi, Communications and Digital Technologies Minister
Parliamentary critics maintain that any regulatory alignment of this scale will ultimately necessitate formal legislative amendments, setting up a prolonged political and legal battle over broadband access and empowerment laws.