The South African government is preparing to offer an equity-equivalent compliance model to Starlink, Elon Musk’s satellite internet service, in a bid to resolve regulatory obstacles stemming from Black Economic Empowerment (BEE) ownership requirements.
The proposal, according to sources familiar with the matter, is intended to ease mounting tensions between South Africa, Musk and U.S. President Donald Trump ahead of President Cyril Ramaphosa’s scheduled visit to the White House.
Starlink’s operations in South Africa have stalled in recent months due to non-compliance with BEE laws, which mandate a minimum of 30% Black ownership for licensing approval in several sectors, including information and communication technology.
Musk, a South African-born billionaire and CEO of SpaceX, has criticized the regulation as discriminatory, citing it as the key reason Starlink has not launched in the country.
Speaking at the Bloomberg Economic Forum on Tuesday, Musk said, “I am in a situation where I was born in South Africa but cannot get a license to operate Starlink because I am not Black. The deal should be that all races are treated equally.”
To address the impasse, South African authorities are expected to present a workaround during a meeting with Musk or his representatives in Washington, D.C., as part of diplomatic engagements surrounding Ramaphosa’s U.S. trip.
The equity-equivalent model under discussion would allow Starlink to meet local ownership rules through alternative means, such as infrastructure investment, digital training programs or subsidizing internet kits in rural areas.
The Department of Communications and Digital Technologies confirmed the policy shift, noting it would not apply exclusively to Starlink but would be extended to other ICT firms, including those from China and the Middle East.
“The new framework is part of a broader strategy to enable international investment and improve national connectivity,” the department said in a statement.
The South African rand strengthened by as much as 0.7% against the U.S. dollar following news of the proposed Starlink compromise. As of 3:21 p.m. in Johannesburg, the currency traded 0.5% higher at 18 per dollar.
Phoenix Kalen, Head of Emerging-Market Research at Societe Generale SA, noted that “investor optimism has been boosted by expectations of a favorable outcome from the Starlink talks and Ramaphosa’s upcoming meeting with President Trump.”
However, not all stakeholders are in support of the move. The Economic Freedom Fighters (EFF), a leftist opposition party, described Starlink as a threat to national sovereignty and local industry.
In a statement, the party accused Musk of leveraging misinformation about alleged genocide in South Africa to gain preferential market access.
Talks between Starlink and South African regulators had previously collapsed after Musk and Trump intensified criticism of the country’s land reform and BEE policies.
Trump has publicly granted refugee status to some white South Africans and accused the government of expropriation practices — claims that local courts and data sources have dismissed as unfounded.
While the equity-equivalent model mirrors concessions made to global auto manufacturers in 2019 — where companies such as BMW and Toyota established funds to develop skills among disadvantaged groups — its extension to ICT is seen as a test of South Africa’s commitment to balancing regulatory objectives with global investment imperatives.
Sources close to the discussions say the framework could help position South Africa as a more accessible destination for next-generation technology providers, while still addressing post-apartheid economic disparities.
Final terms of the proposal are expected to be clarified following Ramaphosa’s diplomatic meetings in Washington.
