In its continued quest to launch its satellite internet services in South Africa, Starlink parent SpaceX will participate in the public hearings called by the Independent Communications Authority of South Africa (Icasa) next month. The hearing will focus on a proposed new licensing framework for satellite services on 5 and 6 February.
Ahead of this, SpaceX in a submission has told the regulator that it ought to rethink the rules requiring 30 per cent shareholding by “historically disadvantaged” groups.
The satellite company controlled by South African-born billionaire Elon Musk related that all processes have been made to launch in the country aside from the registration framework emanating from the required network and services licences delaying its launch.
“Under the current South African regulatory system, companies providing services directly to end users must hold I-ECNS (network) and I-ECS (service) licences, which require at least 30 per cent shareholding by historically disadvantaged groups,” SpaceX wrote in its submission to Icasa.
Despite its availability in many other countries in Southern Africa, Starlink is yet to launch in South Africa. However, the satellite provider claimed that it had set up a legal entity in South Africa for its launch.
Meanwhile, It was reported in April that Starlink is not going to work in South Africa because the company didn’t want to share ownership with locals as per the government’s requirements.
Starlink has refused to comply with the country’s BEE (Black Economic Empowerment) – 30 per cent ownership to local historically disadvantaged people. Icasa claimed that it has not received any application for a license from Starlink, nor has the company approached the Department of Communication and Digital Technologies (DCDT).
Last October, South African President Cyril Ramaphosa held talks with Starlink founder, Elon Musk over potential investments. “I have had discussions with him and have said, Elon, you have become so successful and you’re investing in a variety of countries, I want you to come home and invest here. He and I are going to have a further discussion,” he said.
A few weeks later, the communications minister Solly Malatsi during that period said he would like to see equity equivalence programmes be made an option 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 play as operators. Next month’s public hearing is set to address the impending license requirement issues that have delayed the launch of Starlink in the country.
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More from Starlink on its submission
Starlink has been in strong opposition to South Africa’s local shareholder rule which had delayed its launch. Stressing its position in its submission, the satellite provider said most foreign satellite operators, particularly those with direct-to-consumer business models, have global policies that prevent local shareholding, thus excluding them from the South African market.
“By aligning the licensing and ownership regulations with the ICT sector code – which recognises equity equivalent programmes as an alternative to local shareholding – Icasa could remove a significant barrier to foreign satellite operators. This would not only increase foreign investment in South Africa but would also create broader industry benefits, supporting innovation, competition, and long-term growth,” Starlink proposed.
The SpaceX company also warned that Icasa has erred in limiting the type of contributions that may be made by foreign investments.
Citing the ICT sector code and the provisions of section 9(2)(b) [of the Electronic Communications Act (ECA)], it said that the section offers Icasa numerous ways in which it might oblige licensees to contribute to the transformation of the sector including in the giving of undertakings and the imposition of universal service commitments.
“Any such licence conditions could and, in our view, should, be framed with reference to national policy goals and the best way in which to achieve them, and not only to ownership,” part of the submission reads.
SpaceX also advised that if the regulator persists in its requirement and in enforcing the limitations on ownership regulations, such would have the effect of excluding international investment by emerging technologies.
Referring to its offerings across the African region, it said that its track record in other African countries speaks for itself, and it and other multinational satellite operators could make a meaningful contribution to digital transformation and achieve the SA Connect broadband targets, while also making a significant contribution to black economic empowerment.
SA Connect is the South African government’s programme to expand broadband coverage in under-serviced areas.
Starlink’s vast technology holds the potential to address connectivity gaps in rural and underserved areas but compliance with local licensing requirements has posed a stumbling block.
Icasa’s possible regulatory adjustment
Icasa next month’s public hearing is coming after it has failed to issue new communications licenses in about 13 years.
Moreover, the hearings come after Icasa last August published a proposed new licensing framework for satellite services in the Government Gazette. In that document, the regulator received 38 written representations by the deadline and a further seven after the deadline.
Icasa said it will also develop a procedure for the registration of international space segment providers … who intend to provide a service either directly or indirectly (through existing licensed operators) to South African consumers.
The regulator also plans to develop a transparent regulatory framework with clear rules to establish regulatory certainty for potential investors. This will see it reviewing spectrum fees which will focus on increasing the amount of bandwidth used by satellite systems operating in higher frequency bands.
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