The Congress of South African Trade Unions (COSATU) has indicated a conditional willingness to support the entry of Elon Musk’s Starlink satellite internet service into South Africa, provided the company adheres to the nation’s legal framework, including Broad-Based Black Economic Empowerment (B-BBEE) requirements.
This development comes as the South African government is exploring policy adjustments to facilitate such investment.
Matthew Parks, a representative for COSATU, speaking in an interview with Salaamedia, emphasised the importance of foreign investment for job creation and economic growth. “Our position is that we want investment to come to South Africa. We need to create jobs, we need to create investment [and] economic growth,” Parks stated.
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Balancing Empowerment and Investment
A key consideration for Starlink’s potential operation in South Africa revolves around B-BBEE laws, which generally mandate 30% black ownership for businesses. However, the government is reportedly considering an “equity equivalent” programme for the telecommunications sector. This would allow companies like Starlink to invest in projects such as infrastructure development, local business support, or digital inclusion initiatives as an alternative to direct black shareholding, a model previously adopted in sectors like the automotive industry.
Parks highlighted that COSATU’s primary concern is the respect for South African laws. “Our request is that any investor that comes in needs to respect our laws; labour laws to protect workers’ rights … and broad-based black economic empowerment,” he said.
He further clarified that B-BBEE legislation already offers flexibility: “The BEE laws provide two avenues for investors: one is a 30% shareholder and, if a company doesn’t want to or can’t do that, to then look at equity equivalents.” Parks cited IBM and Microsoft as examples of companies that have utilised the equity equivalent option.
The potential entry of Starlink, a service by SpaceX, is seen by some as a game-changer for internet connectivity in South Africa, particularly in remote and underserved areas where only 1.7% of rural households currently have internet access. Starlink utilises a constellation of low-Earth orbit satellites to provide high-speed, low-latency internet. If approved, installation costs in South Africa are estimated to be at least R6 000, with monthly subscriptions starting from R450.
Parks also touched upon the broader context of US-South African relations, underscoring the economic ties. “The US is important. It’s the world’s largest economy, it’s our second-largest trading partner. We have 600 companies from the US invested in South Africa, and many South African companies export to the US.” He stressed the need to manage and strengthen this relationship for the mutual benefit of both nations’ workers and economies.
The government’s move to potentially ease licensing requirements for satellite services like Starlink aims to encourage such foreign investment and technological advancement, while COSATU’s stance indicates a pragmatic approach focused on legal compliance and economic benefits for South Africa.
Image: Trevor Samson/BusinessLIVE
