For a country that hosts more internet users than any other in sub-Saharan Africa, South Africa is becoming an awkward outlier on its own continent. As of mid-2026, low-Earth-orbit satellite operator Starlink is licensed and operational in Botswana, Mozambique, Zambia, Zimbabwe, Eswatini and Lesotho — every single one of South Africa's land neighbours. Inside South Africa itself, the service remains unauthorised, despite year-on-year demand from rural schools, farms, lodges and small ISPs that have nothing remotely comparable to fall back on.
The blockage is not technical, nor commercial, nor even particularly ideological at the operator level. It is a single line in a twenty-year-old statute.
Section 9 and the 30% Rule
Section 9 of South Africa's Electronic Communications Act, 36 of 2005, requires the Independent Communications Authority of South Africa (ICASA) to prescribe historically disadvantaged group (HDG) ownership thresholds for licensees in the electronic communications sector. ICASA's regulations operationalise this at 30% ownership by Historically Disadvantaged Groups, applied to individual licence holders for both networks (I-ECNS) and services (I-ECS).
The rule was drafted with terrestrial mobile operators in mind — entities that build national infrastructure, sell to South African consumers, and can plausibly bring on a local equity partner. It maps poorly onto a globally consolidated satellite constellation whose business model depends on uniform ownership across hundreds of jurisdictions. Starlink, like most LEO operators, has consistently refused to dilute equity country-by-country, and has said so publicly.
The EEIP Workaround
In May 2025, Communications Minister Solly Malatsi (Democratic Alliance) published a draft policy directive instructing ICASA to recognise Equity Equivalent Investment Programmes (EEIPs) as an alternative route to compliance. EEIPs are not a new invention: under the Department of Trade, Industry and Competition's B-BBEE Codes of Good Practice, multinationals in sectors like automotive have been permitted for years to substitute equity dilution with measurable local investment — supplier development, enterprise development, skills training, and infrastructure spending — typically targeted at historically disadvantaged South Africans.
Toyota, BMW, Ford, Nissan and others run EEIPs that have channelled billions of rand into local component manufacturing and SME funding. The mechanism is well-tested, audited annually by the B-BBEE Commission, and politically uncontroversial in the sectors where it is already used.
What was novel in Malatsi's directive was applying EEIPs to telecoms — and the immediate beneficiary was unmistakeable.
The Political Backlash
The ANC and EFF, partners in the Government of National Unity but historically more protective of B-BBEE's equity-based architecture, accused Malatsi of bending transformation law for a single American billionaire. The timing did not help: the directive appeared in the same weeks that President Cyril Ramaphosa was preparing for a high-stakes May 2025 White House meeting with President Donald Trump, where trade relations and AGOA renewal were on the table, and where Trump's close adviser Elon Musk — South African by birth — was a visible presence.
Opposition framing was simple: a foreign company that refused to follow the law was getting the law rewritten for it. Defenders of the directive countered, correctly, that EEIPs are not a Starlink-specific carve-out — they are a generally applicable instrument that any qualifying licensee could use, and which would in fact bring telecoms into line with how transformation is handled in other strategic industries.
ICASA opened a public consultation. As of May 2026, that consultation remains open. No final regulations have been gazetted, and Starlink has no licence.
The Cost of the Stalemate
South Africa's connectivity gap is real and well-documented. According to the ICASA State of the ICT Sector Report, fixed broadband penetration sits at a fraction of mobile penetration, and rural fixed-line infrastructure is sparse. Independent measurements from Ookla and Cloudflare consistently show median fixed speeds well below European or US norms. Schools in the Eastern Cape, farms in the Northern Cape, and lodges across Limpopo are precisely the use-cases LEO satellite was designed to serve — and precisely the places where licensed neighbours like Lesotho and Mozambique now have legal Starlink access while South African users do not.
The grey market has filled some of the gap: roaming kits brought across borders, regional plans bought through neighbouring shells. ICASA has signalled it will eventually enforce against these, but enforcement against rural users with no legal alternative is unattractive politically and operationally.
A Proportionate Path Forward
South Africa's transformation objectives are legitimate and constitutionally rooted. Nothing about LEO satellite competition requires abandoning them. What the Starlink standoff illustrates is a narrower point: rules calibrated to one technology generation can become net-negative when applied rigidly to another.
An EEIP framework — provided it is genuinely additive, transparently audited, and available to all qualifying entrants — is a more proportionate instrument than a uniform equity threshold that the global satellite industry will simply not meet. It preserves the transformation principle while delivering the connectivity outcome.
The risk is not that Malatsi's directive moves too fast. The risk is that another year of consultation, while every neighbouring country gets connected, hardens the perception that South Africa is closed for the very technologies its rural economy needs most. ICASA can finalise the EEIP regulations, set demanding but achievable investment thresholds, and license entrants on terms that the country's transformation framework — and its consumers — can both live with.
The stalemate is no one's optimal outcome. It is, however, a choice — and one that lengthens by every month it is not resolved.