John Matisonn: Obstacles to the Musk-Ramaphosa Starlink bromance

The GNU faces a challenging test as President Cyril Ramaphosa courts Elon Musk to bring Starlink's satellite internet to South Africa. While Starlink could provide vital internet access to rural areas, Black Economic Empowerment (BEE) legislation remains a major obstacle, requiring 30% local ownership. Despite Starlink's successful launches across Africa, regulatory hurdles in South Africa persist. Meanwhile, the government's slow digital migration hampers broadcasting access, impacting millions of households..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..By John Matisonn.The new-broom momentum of the GNU will be sorely tested by the budding bromance between South African born billionaire Elon Musk and President Cyril Ramaphosa. .___STEADY_PAYWALL___.Despite new hopes of bringing Musk's Starlink satellite internet connectivity platform to South Africa, several crucial obstacles lie in the way of both Starlink being licenced, and of achieving universal access to the internet and broadcasting..Ramaphosa told reporters late last week that he had met with Starlink's founder, Elon Musk, who is the world's richest man, to discuss potential investments:."I have had discussions with him and have said, Elon, you've 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.".Starlink would help address remaining roadblocks to internet usage in rural areas, but there remains the massive barrier in the form of Black Economic Empowerment (BEE) legislation requiring 30% of the company to be owned by historically disadvantaged South Africans. .Musk, the founder of SpaceX, Tesla electric cars and CEO of Twitter, has refused to submit to it..Read more: Elon Musk's Starlink in talks with SA government for expansion.Starlink has a strong case to be an exception to BEE requirements under law. Like the Karpowership electricity ships which bring to the country a plug-in solution providing electricity, there is a strong argument that giving 30% of a company to local partners cannot be justified economically, since all the research, planning, manufacture and even marketing have been completed before the company arrives. .The cost of financing the 30% share would also inevitably lead to higher retail prices to consumers..South Africa is lagging behind in African countries using Starlink, which is already operating in Benin, Nigeria, Rwanda, Malawi, Mozambique, Zambia, Kenya Madagascar, Sierra Leone, South Sudan and Eswatini..Last month the company launched its services in Botswana and Ghana. In Ghana, Starlink obtained regulatory approval and Starlink executives met Botswana's President Mokgweetsi Masisi in early May 2024 to fast-track licensing proceedings there..Creating a BEE exception in South Africa still seems far from politically feasible for an ANC still pacifying resisters to its new, close working collaboration with the liberal Democratic Alliance..If these hurdles can be surmounted, Starlink would provide rural consumers, mines and other isolated populations with immediate, convenient access to broadband. .But Starlink is unlikely to be the solution for access to broadcasting for the urban poor. That still depends on fixing government's botched digital migration programme. .Migrating free-to-air TV transmission from analog to digital transmission frees up frequency for telecommunications companies to provide faster and cheaper broadband. Government has cut off viewers' access to current analog TV services in several provinces, where an estimated 40% of households have lost their TV service..This is a major contributing factor to the SABC's continuing losses..The DA's Solly Malatsi inherited the digital migration fiasco when he was appointed Minister of Communications and Digital Technologies in the government of national unity in June this year. He also inherited a cutoff date to end all analog TV transmission at the end of 2024..Already nine years' behind the International Telecommunications Union's 2015 deadline as well as almost all other African countries' implementation, South Africa's digital migration continues to be plagued by shortages of set-top boxes for the new TV system and a long-delayed policy process..According to the Broadcast Research Council of South Africa, the number of households that will be affected by the December switch-off ranges between 2.2 to 4.5 million. .Malatsi has been in consultation with industry stakeholders but they see little indication that the problems have been resolved. .New technology expert Arthur Goldstuck, CEO of World Wide Worx, has argued that if Ramaphosa can strike a deal with Musk, his electric car Tesla could be a bigger game changer in South Africa than Starlink..Read also:.Elon Musk's Starlink in talks with SA government for expansionElon Musk confirms Starlink awaiting regulatory approval for South Africa launchElon Musk's Starlink starts cutting off South African users

John Matisonn: Obstacles to the Musk-Ramaphosa Starlink bromance

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