South Africans cannot get Starlink until a black partner gets a share

Starlink is a fantastic Internet access technology, perfect for South Africa’s rural areas, but it is blocked locally because SpaceX does not have enough black ownership.

Starlink is a satellite Internet constellation operated by Starlink Services – an international telecommunications provider wholly owned by SpaceX.

The satellite Internet service covers over 100 countries and territories and aims to provide global mobile broadband.

The advanced low-orbit satellites allow users to use the service for activities that have historically been impossible with satellite internet.

It is also easy to set up. Subscribers only need to plug it in and point the terminal to the sky. The rest is automatic.

All Starlink subscription plans include unlimited high-speed data on land with no long-term contracts or commitments.

This means households and businesses in the most rural settings can enjoy streaming, video calls, online gaming, and remote working.

Starlink is a game changer and can significantly impact rural development and economic growth in South Africa.

However, the Independent Communications Authority of South Africa’s (Icasa) regulations prevent the service from launching in South Africa.

To launch in South Africa, Starlink must comply with the Electronic Communications Act, Rica, tax laws, and all other regulations local ISPs are subject to.

One set of regulations require licensees operating a national network or selling Internet services nationally to be 30% owned by historically disadvantaged groups.

New regulations Icasa published in 2021 include provisions that changed this requirement to 30% black ownership.

Simply put, Starlink Services cannot launch its satellite offering in South Africa unless it has 30% black ownership.

Many stakeholders, including the Democratic Alliance and the business sector, have slated this requirement.

DA member of parliament Natasha Mazzone said South Africa is kept in digital darkness until connected cadres can get their slice of the pie.

She explained that the BBBEE requirements demand that 30% of the implementing corporation’s equity be “transferred into their greedy hands”.

“They do not care that South Africans are trying to lift themselves out of poverty, access jobs online, teach themselves skills, and educate their children,” she said.

Well-known fund manager Piet Viljoen said it is fascinating that so-called Black Empowerment laws are holding back Starlink.

“I would have thought that if you wanted to empower black people, access to cheap, fast Internet in rural areas would be quite a powerful tool,” he said.

“I guess the ANC regards the enrichment of a few tenderpreneurs as more critical than uplifting its voting base.”

Bad news about Starlink in South Africa

Many stakeholders hoped that the government and Starlink could come to a compromise, launching the service in South Africa.

People called on the regulator to relax its black ownership requirement on Starlink as it is misplaced for an international company.

However, SpaceX withdrew from the recent regulatory hearings on a new licensing framework for satellite services in South Africa, which ICASA organised.

SpaceX said in its written submission that the requirement of 30% shareholding by historically disadvantaged groups is impossible.

It explained that foreign satellite operators, like Starlink, with direct-to-consumer business models, have global policies that prevent local shareholding.

This means that foreign satellite operators are prevented from operating in South Africa, even if they invest in initiatives that directly benefit the target communities.

It advised that the regulator align licensing and ownership regulations to recognise equity equivalent programmes as an alternative to local shareholding.

Such a change to the ICT sector code would remove a significant barrier to foreign satellite operators.

It would increase foreign investment in South Africa and create broader industry benefits, supporting innovation, competition and long-term growth.

Economists and the business sectors agree that Starlink’s proposal is reasonable and would benefit the country.

However, South Africa’s Presidency lashed out at Elon Musk, who controls SpaceX, for harbouring “unprogressive, racist views”.

“If Elon Musk harbours the kind of unprogressive, racist views that we’ve witnessed, we’re not going to pursue having his investments,” Presidency spokesman Vincent Magwenya said.

Bloomberg reported that this stalled talks between South Africa and SpaceX to launch the Starlink internet service in the country.

There is a glimmer of hope that Communications Minister Solly Malatsi will be able to change regulations regarding foreign companies.

Malatsi is in discussions with Icasa about introducing equity equivalents as an alternative to existing black ownership requirements.

The minister said he would also consider instruments other than a policy directive to address the issue if a policy directive isn’t appropriate.

Unless the regulatory red tape is cleared, South Africans will be the only people in Southern Africa without legal access to Starlink in 2025.

The reality is that South Africa can benefit far more from Starlink than the company, and Elon Musk, can benefit from South Africa.

Therefore, it is in the interest of South Africans to allow Starlink to launch in the country to offer affordable Internet access for all.