Plan to allow Starlink launch in South Africa

Communications minister Solly Malatsi has announced a plan that would open a door for Elon Musk’s SpaceX to launch its satellite broadband service, Starlink, in South Africa.
Malatsi has said he intends to issue a policy direction to the Independent Communications Authority of South Africa (Icasa) regarding equity equivalent programmes, for urgent consideration.
“This is part of an initiative to significantly expand access to broadband connectivity to poor South Africans and people living in remote parts of the country,” Malatsi stated.
Although the minister did not name Starlink specifically, it is an open industry secret that South Africa’s ownership equity laws have discouraged SpaceX from launching its broadband service locally.
South Africa was previously one of the first countries on Starlink’s list of planned rollouts, with pre-orders for the service launching locally in February 2021.
The SpaceX-operated low Earth orbit (LEO) satellite broadband service initially targeted a 2022 launch for South Africa.
However, in March 2021, Icasa issued new regulations that changed ownership equity laws for telecommunications companies in South Africa.
These new regulations stipulated that it was no longer sufficient for national network operators and service providers to be 30% owned by historically disadvantaged groups, which include black people, youth, women, and people with disabilities.
Instead, telecommunications providers with a national footprint had to be 30% black-owned.
Due to the industry backlash during the public consultation period for these regulations, Icasa suspended this provision until an unspecified future date.
Therefore, the old ownership equity requirements remain in effect, but the cloud of regulations that could change at the drop of a hat has hung over the industry for three and a half years.
In April 2021, Icasa also told MyBroadband that Starlink would need to comply with the black ownership requirement.
Six months after the regulations were published, around November 2021, Starlink pushed back its planned launch in South Africa to 2023.
Nearly a year later, in September 2022, it was changed to “unknown”, where it has remained until today.
Although SpaceX never confirmed this regulatory change and the uncertainty around it caused it to halt its South African plans, well-placed industry sources have said they were absolutely to blame.
While Malatsi’s proposal won’t do away with the equity requirements, equity equivalent programmes allow companies to fulfil the requirements of BEE ownership through a public or private scheme.
“After consultation with Icasa, the proposed policy direction will be published for comment as per the Electronic Communications Act,” Malatsi stated.
“This is in line with the Codes of Good Practice which recognise that the global nature of their operations may constrain multinationals in their ability to comply with equity ownership requirements,” he said.
“Equity equivalents, recognised in other sectors, provide an avenue for factoring in alternative ways for companies to make an impact on South Africa’s socioeconomic development.”
Malatsi said policy clarity on the recognition of equity equivalence schemes has long been sought by players in the ICT industry.
“This will provide the certainty necessary to attract increased investment in ICT and accelerate universal Internet access.”

This latest move from the minister comes after he met with representatives from Starlink to discuss a potential investment into South Africa.
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.
In response to the article about the meeting, Elon Musk posted on Twitter/X that he would love to invest in and otherwise support South Africa.
Malatsi responded with his own post on Musk’s social media platform.
“We’re committed to broadening digital inclusion and exploring every avenue that will help achieve this while contributing to economic growth and jobs.”
The minister also visited Icasa’s offices this week, with the regulator stating that he emphasised clear regulations for underserved communities, attracting global investors, and collaborating with other regulators.

“World Bank research shows that, on average, every 10% increase in broadband penetration results in 1.21% GDP growth in middle-income countries such as South Africa,” Malatsi stated.
“Broadband access makes it easier for people to start businesses, grow businesses, seek employment, work remotely, and market goods and services,” he continued.
“Giving millions of South Africans access to broadband would therefore constitute one of the biggest empowerment programmes the South African government has ever undertaken.”
Malatsi said there were two parts to the initiative to improve broadband access.
“First, we need to lower regulatory hurdles to investment in cheap, reliable broadband. Second, we need to lower the price of the smart devices needed to use 4G and 5G data.”
“Today, I am focused on the first part,” Malatsi said.
“Announcements on the second part will follow in due course.”
Malatsi previously told MyBroadband that he would like to see a threshold on the application of ad valorem taxes for smartphones in South Africa.
While more expensive devices would continue to get taxed as luxury items, Malatsi believes that lower-end phones should be exempt from this duty.