Why Starlink Can’t Operate in South Africa: Elon Musk’s Claims vs. Government Regulations

Elon Musk’s satellite internet company, Starlink, has sparked concerns in South Africa after Musk claimed that race-based laws were blocking its entry. While his statement grabbed global attention, the reality is more complex.

South African authorities argue that Starlink must comply with regulations that apply to all foreign companies. So, what’s really going on?

Elon Musk’s Claims vs. Government Regulations

Musk asserts that South Africa’s requirement for 30% Black ownership is preventing Starlink from obtaining an operating license. He called this policy “openly racist,” implying that it unfairly targets his business. However, the South African government maintains that this is a standard requirement for all foreign companies entering regulated industries like telecommunications.

Officials argue that the ownership rule is part of a broader strategy aimed at economic transformation and correcting historical imbalances. They emphasize that compliance is mandatory for all businesses, regardless of their ownership or nationality.

South Africa’s Black Economic Empowerment (BEE) Policy

BEE is a government initiative designed to promote economic participation among Black South Africans, addressing disparities caused by apartheid. By requiring companies to include Black ownership, it aims to redistribute wealth and create more equitable business opportunities.

For foreign businesses like Starlink, this poses a challenge. South African telecom regulations mandate that 30% of a company’s equity must be owned by Black South Africans for it to receive an operating license. This means that unless Starlink partners with a local entity or restructures its ownership, it cannot legally operate within the country.

How Other Countries Handle Foreign Investment

South Africa is not alone in imposing foreign ownership rules. Many countries have similar policies to protect local businesses and ensure wealth distribution.

In Nigeria, for instance, telecom operators must have at least 30% local ownership, while India imposes foreign direct investment (FDI) caps in strategic industries. Brazil, too, has restrictions on foreign ownership in sectors like media and telecommunications. While these laws can create hurdles for multinational companies, many businesses adapt by forming partnerships or negotiating alternative compliance measures.