R500-million Starlink deal for South Africa

Elon Musk’s SpaceX has committed to spending R500 million to provide free broadband Internet to schools in South Africa, a proposed investment to gain local approval for Starlink.

The planned investment was revealed in a second email to South Africans interested in the satellite Internet service.

SpaceX appealed to people who previously indicated their interest in Starlink to voice their support for a policy direction proposed by communications minister Solly Malatsi.

If adopted, the Department of Communications Digital Technologies Policy Direction No. 3218 would introduce Equity Equivalence Investment Programmes (EEIPs) in the ICT sector, amongst other things.

EEIPs are an alternative way for multinational companies to comply with broad-based black economic empowerment (B-BBBE) laws without meeting the 30% historically disadvantaged ownership threshold.

They are already used in other sectors, including banking, manufacturing, technology, and pharmaceutical industries.

Starlink said the addition of EEIPs in the ICT sector would allow it to expand broadband access across the country, including underserved townships, farms, communities, and rural schools.

The company said if it gets local approval, it will roll out Starlink Internet to 5,000 schools nationwide, providing free high-speed Internet connectivity to roughly 2.4 million children.

For those willing to support the policy direction, Starlink provides a direct “Voice Your Support” link that generates a ready-to-send email which they can edit or send as-is with their signature.

Starlink also linked a letter addressed to the trade and industry minister, Parks Tau, to reaffirm its position with the government to provide high-speed, low-latency internet across the country.

Starlink Market Access senior director Ryan D. Goodnight explained that the company wanted to help solve the lack of access to education resources in the most rural parts of the country.

“Starlink proposes to provide over 5,000 rural schools with fully funded Starlink kits and service in addition to facilitating the installation support alongside local South African companies,” Goodnight said.

Goodnight said this would not only positively impact the lives of millions of schoolchildren but also assist the South African government in achieving its objectives under SA Connect.

Starlink not seeking special treatment

Goodnight also explained that Starlink was fully committed to providing its service as a legally compliant company.

“Starlink has never sought an exemption from B-BBEE laws, nor have we asked for any special treatment,” Goodnight said.

“It is unfortunate that this narrative is being perpetuated, in our view, because Starlink supports a level playing field for the entire sector, not just specific operators.”

He said Starlink had not launched in South Africa because Icasa’s licence regulations stipulated that all license holders must be 30% locally owned.

Goodnight asserted that Starlink must retain sole ownership of all its subsidiaries globally for operational purposes.

“This is true in each of the nearly 150 countries, territories and other markets where we are licensed and providing service today,” Goodnight said.

“Fortunately, however, South Africa’s Electronic Communications Act and the B-BBEE ICT Sector Code already provide multiple pathways for meeting ownership requirements, including through EEIPs.”

Goodnight highlighted Tau’s comments during a recent visit to the United States, where he said EEIPs were already accepted and successfully implemented across most economic sectors in South Africa.

Goodnight said that Microsoft, IBM, and Amazon were among the companies that relied on EEIPs to meet their local ownership obligations without sacrificing their commitment to transformation.

While the adoption of EEIPs would pave the way for Starlink to get approval in South Africa, Malatsi recently emphasised that it would still be up to Icasa to grant Starlink an operating licence.