A South African Lawmaker has accused the Communications Minister, Solly Malatsi, of trying to erode the country’s telecoms laws to allow Elon Musk’s Starlink easy entry into the country.
This follows a policy directive to recognise equity equivalent programmes in the sector to accelerate broadband access and attract multinationals that could not comply with local equity ownership requirements.
In a statement on Monday, the senior lawmaker stressed that Malatsi is seeking to bend the country’s laws on local ownership to appease foreign businesses, including Elon Musk’s Starlink.
South Africa’s Electronic Communications Act (ECA) states that historically disadvantaged groups must hold at least 30 per cent equity in any potential licensee in South Africa’s telecommunications, broadcasting, or postal sectors.
This condition has challenged Starlink’s intended launch in South Africa.
To circumvent the act, Starlink’s parent company SpaceX wrote to telecommunications regulator ICASA that local shareholding laws were a significant barrier and that it should rethink the 30 per cent ownership requirement for licensees by introducing equity equivalent programmes in these regions as an alternative.
The satellite company suggested setting aside an equity equivalent to the ownership programme to assist South Africans. It offered to install 8,000 satellite kits in rural schools across the country.
See Also: Elon Musk’s Starlink launches in Niger, now in 18 African countries.
The Chairperson of the Portfolio Committee on Communications and Digital Technologies, Khusela Sangoni Diko, noted the minister was seeking to “erode hard-won transformation goals” by his moves to bypass the Act.
“It appears these proposed directives and regulations are an attempt to undermine empowerment legislation by stealth and, should this be found to be the case, they will be fiercely opposed,” Diko added.
She referenced a recent move by MTN, in partnership with an American low-earth orbit (LEO) satellite provider Lynk, for the trial of Africa’s first satellite voice call using a smartphone as an example of partnerships achieved within local laws.
“These initiatives underscore the importance of fast-tracking South Africa’s satellite programme, and that there is no need for overreliance and obsession with a single satellite provider,” Diko said.
While noting the need to redirect focus on other Starlink alternatives, she noted that several other satellite providers have indicated keen interest in entering the South African market in compliance with the laws, especially the ECA.
Recall that SpaceSail, a new Chinese-operated satellite broadband service, is emerging as a formidable rival to Elon Musk’s Starlink, where it may beat the U.S.-based company to launch its services in South Africa.
SpaceSail may find a favourable ground in South Africa, powered by the country’s growing connection with China through the BRICS alliance (Brazil, Russia, India, China, and South Africa). The registration of eight “Spacesail” trademarks in South Africa, covering telecommunications, computers, scientific devices, and technological services, signals intent to enter the market.
Chinese state-backed firms like Huawei and ZTE have successfully navigated South Africa’s ownership rules, offering a blueprint for SpaceSail.
Starlink’s regulatory impasse in South Africa
Recent actions revealed that Starlink is not aiming to meet the ECA rule that mandates companies to allocate 30 per cent of their shareholding to historically disadvantaged groups.
The legislation was introduced by the government after the end of apartheid in 1994 to give South Africa’s Black majority a stake in the economy from which they were excluded during White-minority rule.
While the government has upheld this position for ages, the communications minister, Solly Malatsi, is making alternatives for Starlink. Last year, Malatsi said he would like to see equity equivalence programmes be made an alternative to encourage foreign investment in South Africa’s ICT sector.
The communications regulator announced that it is working on a regulatory and licensing framework for satellite internet providers to act as operators. However, Starlink didn’t appear at February’s public hearing.
The discussions stumbled after Elon Musk and U.S. President Donald Trump sought public backing against laws aimed at redressing the racial inequality wrought by the apartheid. And, the government has since stood its ground to not back down at the expense of the nation’s constitution and values amidst its eagerness to attract as much foreign investment as possible.
Amid the struggle to launch in South Africa, the satellite company has continued to extend its wings across Africa. In March, Starlink officially launched its service in the Republic of Niger where the West African country joined 17 other African nations who had embraced the services of the satellite internet service provider.
The development follows a launch in Cape Verde, Chad, Botswana, Liberia, and Zimbabwe late last year. Its plans include Mauritius, Angola, Tanzania, the Democratic Republic of Congo, Comoros, and Seychelles.
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