Communications minister Solly Malatsi has met with representatives from Starlink to discuss a potential investment into South Africa.
Based on his early discussions with the SpaceX-operated satellite Internet service, the minister suggested that South Africa examine telecoms regulations impeding digital inclusion, for the overall benefit of the sector and the country.
Malatsi told MyBroadband that he had his first meeting with the Starlink team several weeks ago and would continue engaging with them.
Malatsi’s confirmation comes after President Cyril Ramaphosa met with SpaceX and Tesla CEO Elon Musk to discuss potential investments in South Africa during a visit to the UN General Assembly in New York.
The president’s spokesperson said these discussions were strictly “high-level” and did not delve into any specifics.
As Minister of Communications and Digital Technologies, Malatsi’s role includes talking with members of the telecoms industry and potential important players in more detail. The latter includes the likes of Starlink.
The minister said it was undeniable Starlink presented opportunities to connect underserved communities and accelerate the Government of National Unity’s (GNU’s) goal of providing universal Internet access.
“Given the limitations of existing broadband infrastructure in rural areas where the most digital-excluded poor live, low-earth orbit satellite Internet services have the enormous potential to bring meaningful connectivity to the most underserved communities with no infrastructure investments on the part of the South African government,” Malatsi said.
“This makes it crucial that we find a way to introduce these services to the people that need it the most while simultaneously striking the right balance between market competition, fairness, transparency, consistency, and compliance in the sector.”
Malatsi said he was committed to playing his part in bringing services that would help the country truly achieve digital inclusion.
“Access to reliable connectivity must be a basic human right that should be enjoyed equally by all — whether you are in a village in Limpopo, where I come from — or you’re in a suburb of Sandton.”
“It’s my mission to make this a reality for every South African for as long as I am in this role.”
Malatsi explained the purpose of his meeting was to get a sense of Starlink’s plans for potential investment in South Africa while explaining the current regulatory requirements.
He also provided guidance on what Starlink would need to do to comply.
Malatsi argued that propelling South Africa towards digital inclusion would require clarity and consensus across government, the current industry players, and the Independent Communications Authority of South Africa (ICASA).
He alluded to the possibility that South Africa’s complex regulatory environment may inadvertently be holding back the country’s broadband expansion.
“President Ramaphosa is constantly imploring us as ministers to review existing regulations with the sole purpose of unlocking opportunities that will also improve the quality of life for all South Africans,” Malatsi said.
“For me, as the Minister of Communications and Digital Communications, that means constantly assessing bottlenecks that, if unlocked, will boost our efforts to connect people to opportunities for livelihoods, business, learning and entertainment in a digitally connected society.”
Malatsi said government needed to be open-minded in exploring every practical regulatory avenue that could open the door for millions of South Africans to access low-earth orbit connectivity.
“We need our regulatory environment to encourage companies to invest in South Africa while simultaneously promoting inclusive growth and job creation rather than suffocate it, even if it’s inadvertent,” Malatsi said.
Malatsi did not name any regulations that could be impeding Starlink’s launch in South Africa, but there are several potential hurdles for a local rollout.
Whereas many international companies partner with local entities to launch their products and services, Starlink’s business model for its residential or personal service is to work directly with customers.
Working directly with customers ensures Starlink can give them the best price and gives the company greater control over customer support.
There are several challenges with taking this direct approach in South Africa.
Firstly, the Electronic Communications Act requires telecoms licensees to have 30% historically-disadvantaged (HDG) ownership, which can include black people, youth, women, and disabled people.
For women, youth, and people with disabilities to qualify, they must be citizens of South Africa.
Therefore, SpaceX is unlikely to meet this threshold. In any event, US companies are not required to keep track of shareholder demographics and it would difficult to establish SpaceX’s level of compliance.
Additionally, Icasa has published new regulations that will effectively replace the HDG requirement with a Black Economic Empowerment rule that requires all licence holders to be 30% black-owned.
It suspended this regulation due to industry backlash, with stakeholders expressing concerns that it would negatively impact smaller players.
However, the regulation remains on the books and can theoretically be enacted at any future date, so it hangs like an axe over the industry’s head.
Secondly, even if SpaceX or a locally established subsidiary met the required ownership thresholds, new electronic communications services (ECS) or electronic communications network service (ECNS) licences were last issued 14 years ago.
Companies that want to acquire ECS or ECNS licences must buy them from existing licence holders or acquire those licence holders — which also requires regulatory approval.
This process can take several months and cost millions of rand.
Even state-owned Broadband Infraco had to publish a tender to procure an ECS license “second-hand” last year.
Another potential hurdle for Starlink is Icasa recently proposing new regulations specifically for satellite internet services that could arguably introduce even more laborious requirements for it to operate in South Africa.
