Seven months ago I wrote that MTN’s Iranian chessboard had been overturned.
The war against Iran had ripped through the command structure sitting above MTN Irancell and transformed what CEO Ralph Mupita had already called a “frozen asset” into a stranded corporate inheritance embedded in one of the world’s most dangerous geopolitical fault lines.
Now another piece has moved.
A US court has rejected MTN’s attempt to have an earlier decision reconsidered, or to secure an immediate appeal, in litigation brought under the Anti-Terrorism Act, which allows US citizens to sue for damages arising from acts of terrorism. The Zobay case and related Long matter will proceed to discovery.
MTN has not been found liable for anything. The company stresses, correctly, that the decision is procedural. It says the discovery process will finally allow it to obtain and present evidence to rebut allegations that its activities in Iran and Afghanistan assisted organisations including the Iranian Revolutionary Guard Corps and the Taliban.
But discovery matters because litigation now moves deeper into the evidence of decisions taken years ago by executives operating in a geopolitical environment profoundly different from today’s, and at a time when Cyril Ramaphosa was chair of the MTN board.
The fascinating part is what is happening at the other end of South Africa’s telecoms industry.
Weakest link
While MTN is defending the legacy of its entry into Iran, Elon Musk’s Starlink remains unable to launch formally in South Africa because the world’s most prominent satellite internet company cannot readily satisfy the 30% historically disadvantaged ownership requirement.
Musk’s personality and politics aside, the question that has still not been resolved is: what constitutes meaningful empowerment in an industry increasingly dominated by multinational technology platforms whose global ownership structures cannot practically be carved up country by country?
Even inside the government, tension is visible. Last week deputy communications & digital technologies minister Mondli Gungubele said South Africa would happily welcome Starlink, but insisted Musk must comply with the existing equity regime. His boss in the ministry, Solly Malatsi, meanwhile insists the government will pursue legislative amendments that would allow equity equivalent investment programmes to complement ownership requirements.
And this argument about transformation is sitting in the middle of South Africa’s rapidly worsening relationship with the US.
Freshly démarched for the third time, US ambassador Leo Brent Bozell says one of Washington’s outstanding demands is that South Africa permit equity equivalent alternatives to ownership requirements specifically in “telecommunications and mining”. Pretoria disputes Washington’s wider characterisation of its racial and economic policies and says it is already reviewing aspects of BEE and addressing several US concerns.
But the Starlink overlap is impossible to miss.
There are legitimate arguments on both sides. South Africa has a constitutional and political commitment to transforming ownership in an economy whose assets remain highly concentrated. The objections of the Independent Communications Authority of South Africa are fundamentally legal rather than ideological, as the regulator cannot pretend an act of parliament says something that it does not.
There is equally a legitimate economic question about whether ownership is always the most effective instrument for delivering broad-based empowerment.
That was the point of the AI Diagnostics example I wrote about in May.
A locally developed digital stethoscope uses AI to screen lung sounds for tuberculosis. But the model is cloud-based. In a rural clinic without reliable broadband, a remarkable South African innovation can become little more than an expensive stethoscope.
Connectivity isn’t an abstraction there.
Nor is connecting rural schools, funding local suppliers, developing technical skills or building digital infrastructure necessarily an inferior form of economic participation simply because it does not appear on a share certificate.
Chokepoints
Which brings us back to MTN.
The two cases are legally unrelated. Nobody should suggest that Washington’s anger with Pretoria is driving civil litigation in an independent federal court, or that the MTN case has anything to do with Starlink’s licensing difficulties.
But you’d be naive to think markets compartmentalise geopolitical risk quite so neatly. Banks, insurers, multinational boards and institutional investors increasingly view sanctions, technology, national security, regulatory policy and diplomatic alignment as parts of the same risk matrix.
Edward Fishman’s Chokepoints: American Power in the Age of Economic Warfare is a useful primer on just how far the machinery has moved. Fishman traces the way Washington learnt to turn the plumbing of globalisation — the dollar, the correspondent banking system, access to advanced technology, export controls, and other points through which global commerce must pass — into leverage. Iran was one of the laboratories for this new economic statecraft; Russia and China have since broadened the battlefield. Sanctions are no longer the rather blunt embargoes of old. In the hands of Washington’s treasury, commerce and state departments, they have become increasingly precise tools aimed at economic chokepoints.
That makes Pretoria’s posture rather more consequential than much of our foreign-policy debate allows.
South Africa’s insistence that it can maintain close relationships with countries hostile to the US while preserving the commercial advantages of its US relationship, and simply not respond to concerns over how foreign investment is treated, deserves more scrutiny than it generally receives.
It may be principled. It may even be justified in particular cases. But foreign policy is not judged solely by the purity of its stated principles. It is also judged by what it secures for the country.
What, exactly, are we getting?
