SpaceX can officially launch Starlink in South Africa without giving up 30% of its company to historically disadvantaged groups (HDGs).
That is according to the Internet Service Providers Association of South Africa (ISPA).
SpaceX’s intention to roll out Starlink locally seemingly hit a roadblock due to South Africa’s Electronics Communications Act (ECA).
The ECA determines that local telecoms licensees must be 30% owned by HDGs — which can include black people, women, youth, or people with disabilities.
Failing to meet this threshold means SpaceX is unable to apply for an Electronic Communications Service (ECS) or Electronic Communications Network Service (ECNS) licence with the Independent Communications Authority of South Africa (Icasa).
ISPA told MyBroadband it did not have an official stance on Starlink’s regulatory issues in South Africa.
However, the organisation said the narrative that SpaceX would hand off 30% of its global equity to operate in South Africa was “obviously not correct”.
SpaceX would only need to establish a local subsidiary with the right HDG ownership make-up or work through a local partner that already met the requirement.
“This has been done by a large number of international companies which provide licensed services in South Africa,” ISPA said.
Although Starlink seems to prefer direct customer relationships rather than working through resellers, if SpaceX deems South Africa a viable market, ISPA’s proposed approach could be the path it chooses.
However, an ISP that imported thousands of kits and facilitated access to Starlink’s regional roaming service for customers in South Africa told MyBroadband the country is currently low on its priority list.
According to the ISP, Starlink ranked countries targeted for rollout as follows:
- Highest priority — Countries without registration/licencing requirements
- Medium priority — Countries requiring registration/licencing with minimal foreseen issues
- Lowest priority — Countries likely to have challenging registration/licencing issues
South Africa is currently in the third “lowest priority” category due to potential hurdles with its regulatory regime.
When Starlink initially opened pre-orders globally, its estimated launch date for South Africa was 2022.
That has now been pushed back to “unknown”, although South Africa still falls within the “Coming Soon” category on the Starlink coverage map.
That means Starlink could launch in South Africa using ISPA’s proposed approach, but it would take longer than in countries that don’t require the company to jump through regulatory hoops.
Kenya drops ownership rules to encourage tech investments
At least one African country where Starlink has already been launched exempted Starlink from their local ownership rules — Kenya.
In mid-July 2023, Kenyan president William Ruto reportedly dropped the rule to make the country more attractive for digital investments by global companies like SpaceX, Google, Microsoft, and Amazon.
A few days later, Starlink announced its official rollout in the country.
It is currently possible to order the kit directly from the company in Kenya. However, tech news website Benjamin Dada reports that an ISP called Karibu Connect also acts as Starlink’s authorised reseller.
Starlink has not been outspoken about its reseller programme, but Reddit users who asked the company about it say it requires partners to buy 1,000 Starlink kits on a recurring basis to be considered.
The Democratic Alliance has also asked communications minister Mondli Gungubele whether he could not drop the HDG requirement for Starlink.
In his official response, Gungubele did not address whether he had the powers to do so but stressed that Starlink had not yet applied for a licence to operate in South Africa.