Communications minister Mondli Gungubele says it would not be possible to allow Starlink to officially operate in the country unless it met the country’s Internet service provider (ISP) ownership equity rules.
Democratic Alliance MP Natasha Mazonne asked Gungebele whether he would consider amending the industry’s regulations to allow companies like Starlink to operate in South Africa or to exempt it from the requirements in the public interest.
In a Parliamentary response on 30 June 2023, Gungubele said the 30% equity to be held by historically disadvantaged groups (HDG) was derived from section 9(2)(b) of the Electronic Communications Act (ECA), as amended.
“On this basis, the regulations giving effect to the provisions of the Act cannot be amended until the ECA is amended,” Gungubele said.
Even if the minister were supportive of scrapping the rules, for which there is no indication, the amending of the ECA would not be a simple process and would likely take several months or even years to pass through the public consultation process and government sign-off.
Gungebele said that any interested party — including Starlink or its parent company SpaceX — could engage with the Independent Communications Authority of South Africa (Icasa) to seek advice on local operations.
“As a Department, we welcome partners and investors to develop and invest in the sector and economy; and appeal that they comply with regulations for the sector,” Gungubele said.
Gungubele recently hit back at media reports and a statement from the Democratic Alliance (DA) alleging that the ruling ANC was blocking Starlink’s local launch. The DA is South Africa’s official opposition and Gungubele an ANC member.
“The Minister wishes to state categorically that the custodian of the licensing process is the Authority, Icasa,” Gungubele said.
“The Authority has advised the Minister that such applications have not been received from Starlink to date.”
Gungubele failed to contextualise that his party was responsible for the HDG ownership rule being adopted by Icasa in the first place.
The regulations that set ownership requirements for ISPs were implemented through ministerial policy directives guided by official ANC policy.
Icasa has confirmed it had discussions with SpaceX regarding Starlink on two occasions.
During these meetings, SpaceX sought guidance on the regulatory requirements or process for acquiring the necessary electronic communications service licences in South Africa.
“The Authority would welcome new applications for the provision of broadband satellite services in South Africa,” Icasa has said.
“This is an important and growing market, especially for the provision of broadband Internet services to remote, under-serviced areas.”
The fact that SpaceX has repeatedly pushed back its ETA for Starlink in South Africa suggests it is either uninterested in pursuing the market or sees it as a low priority.
According to Starlink’s coverage map, South Africa’s availability date for the service is currently in an “unknown” state. That was not always the case, however.
When Starlink opened pre-orders for most of the world in February 2021, South Africa’s estimated availability date was 2022.
Shortly thereafter, Icasa confirmed to MyBroadband that it had quickly met with the company on one occasion a week before the pre-order page opened to South Africans.
It was not clear when the second meeting took place. However, by May 2021, Starlink added a disclaimer to its pre-order page for South Africa in which it specifically mentioned regulatory approval would first have to be confirmed.
Starlink already works in South Africa
Fortunately, for those desperate for connectivity in underserved rural areas, Starlink already works in South Africa thanks to a roaming feature.
However, this requires that customers pay in the foreign currency of the country to which they had their unit shipped initially.
If you can have the kit shipped to and imported from Mozambique, you will pay MZN3,645 (R1,295) per month for a subscription with regional roaming on the African continent.
A South African ISP that imports Starlink kits on its customers’ behalf told MyBroadband the service had been a game-changer for its rural clients, who complain about their mobile coverage dropping during load-shedding.
According to its information, the HDG requirement was the reason for Starlink’s delayed launch in South Africa.
Starlink enterprise sales director Phillip van Essen recently also said the company prioritised the countries that made it easy for them to do business there, open entities, and get regulatory approvals.
Given that South Africa still does not have an official launch date and most other African countries do, it appears that we are one of those making it more difficult to comply.
While many companies that operate in South Africa establish fully-fledged local entities or resell their products via other companies to ensure they meet the necessary regulations, SpaceX prefers to do business directly with its Starlink customers.
With SpaceX’s private ownership structure, it would be incredibly difficult to determine its demographic makeup and ensure it meets the HDG criteria.
According to Dealroom.co, well over 80 investment funds and other companies — including Google and Nasa — own stakes in SpaceX.
The latest available data shows that SpaceX’s biggest shareholder is its CEO — South African-born Elon Musk — who owns about 44% of the company.