SpaceX and South Africa Tangle Over Satellite Licensing Rules: What’s the Way Forward?

There has been a stumbling block in negotiations to license SpaceX’s Starlink service in South Africa, and the issue is not only commercial in nature but also political. According to a recent Bloomberg story, tensions between the US and South Africa, especially with the Donald Trump administration, have put a halt to negotiations. It seems that both parties are awaiting a settlement before reexamining the agreement.

Elon Musk’s company, SpaceX, has been attempting for some time to obtain a license to operate in South Africa. However, there’s a catch: local regulations mandate that 30% of international businesses be owned by historically underrepresented groups. SpaceX proposed a “equity equivalents” strategy in place of giving up a stake, in which they would fund projects that support South Africa’s objectives for Black economic empowerment.

In fact, Solly Malatsi, the minister of communications, lobbied for the revision of these rules in order to promote greater international investment in the industry, not just for Starlink. However, it has been a difficult task. This month, SpaceX was scheduled to attend public hearings regarding new satellite licensing regulations, but they abruptly withdrew.

Then, everything became much more chaotic. Musk referred to South Africa’s ownership laws as “openly racist” on his platform, X. The government wasn’t happy about that. Vincent Magwenya, the spokesperson for President Cyril Ramaphosa, stated unequivocally that if Musk persists in his “unprogressive, racist views” and “peddling lies,” South Africa will not go out of its way to support Starlink.

SpaceX contended in its statement to South Africa’s telecoms regulator, Icasa, that many international satellite operators are excluded by the 30% local ownership restriction. They assert that businesses are being prevented from joining the market, even if they are prepared to adhere to empowerment regulations. Rather, as other businesses have already acknowledged, they want South Africa to permit equity-equivalent investments.

For now, though, it looks like a standoff. While Starlink could bring massive benefits like better Internet access in remote areas, the bigger question is whether South Africa will change its rules or if Musk’s latest comments have shut that door for good. I guess time will tell.