South Africa to admit Starlink if 30% of its equity is owned by women, blacks, and PLWD

South Africa’s Minister of Communications and Digital Technologies, Mondli Gungubele, has announced that Starlink, a satellite internet provider, must adhere to South Africa’s rules regarding the 30% equity requirement for Internet service providers (ISPs) to operate legally in the country.

This country’s law states that for Starlink to operate in South Africa, it needs individual individual IECS (Individual Electronic Communications Service,)/IECNS (Individual Electronic Communications Network Service) applicants or licensees to have a minimum of 30% equity ownership held by persons from historically disadvantaged groups.

The historically disadvantaged group in South Africa includes women, black people, and people living with physical disability.

When questioned by Natasha Mazonne, a member of the Democratic Alliance party, about the possibility of amending the regulations to allow companies like Starlink to operate in South Africa without meeting the equity requirements as long as it is of public interest. Mondli Gungubele, replied:

The 30% equity to be held by historically disadvantaged groups as enunciated in the regulations is derived from section 9(2)(b) of the Electronic Communications Act (Act No. 36 of 2005) as amended. On this basis, the regulations giving effect to the provisions of the Act, cannot be amended until the ECA is amended.

Also, this requirement cannot be altered until the ECA itself is amended which would not be a simple process as it will involve a lengthy public consultation period and government approval, which could take several months or even years.

Gungebele further suggested that interested parties, including Starlink or its parent company SpaceX, can reach out to the Independent Communications Authority of South Africa (ICASA) as Starlink uses frequency spectrum to transmit data and will also have to apply for a Radio Frequency Spectrum license for this purpose.

They can engage with ICASA to seek advice and guidance on the specific requirements and regulations for operating a satellite internet service in South Africa. ICASA can provide information on the necessary procedures, licenses, and any other local operational considerations.

In his response, Gungubele also said,

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.

This development follows after there were allegations that Gungubele, a member of the ruling African National Congress (ANC), and the party itself were obstructing the local launch of Starlink.

Gungubele, however, clarified that the responsibility for issuing licenses lies with the Independent Communications Authority of South Africa (ICASA). He emphasized that the ICASA are yet to receive any license applications from Starlink.

Reports have confirmed that ICASA has had discussions with SpaceX regarding Starlink on two occasions. According to the report, during these meetings, SpaceX sought guidance on the regulatory requirements or process for acquiring the necessary electronic communications service licenses in South Africa. But, there has not been any information as regards the next steps they plan to take or license applications made.

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Starlink in South Africa

Elon Musk, the CEO of SpaceX, having grown up in South Africa, sparked expectations that the country would be among the first to receive Starlink, SpaceX’s satellite internet service. However, Nigeria surprisingly became the first African country to have access to Starlink before South Africa.

While Starlink is now available for use in South Africa, it cannot be shipped and can only be accessed through its roaming feature, which tends to be more expensive compared to fixed residential packages. The fees for Starlink’s residential packages vary from country to country, but they are generally more affordable than the roaming option that South Africans currently have access to.

SpaceX is not abandoning South Africa though. The company initially had a pre-order date for the service, but there have been delays. One explanation for the delays is the regulatory policies, processes, and framework in South Africa. These factors have likely created hurdles and caused delays for SpaceX in obtaining the necessary approvals and permits to deploy Starlink in the country.

However, while the regulatory drama might have allowed the company to restrategize its plans to dominate South Africa, other factors might have played in allowing the company to not intentionally pursue the market. Some of these factors include,

1. Market Demand: SpaceX may prioritize regions with higher market demand for Starlink’s satellite internet service. This could be based on factors such as population density, internet connectivity gaps, or the level of demand for reliable and high-speed internet access. If the demand in South Africa is perceived as lower compared to other regions, it might not be a priority for deployment.
2. Competition: South Africa is home to several major telecommunications operators, which may already provide broadband services to a significant portion of the population. If the market is already well-served by existing providers, SpaceX might allocate its resources to regions with less competition and more untapped market potential.
3. Strategic Considerations: SpaceX’s decision-making process may also involve strategic considerations, such as partnerships, regulatory environment, or geopolitical factors. The company may prioritize regions where it can establish favorable partnerships with local stakeholders or where the regulatory framework is more conducive to satellite internet deployment.

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