Starlink’s satellite saga: Legal battles and telecom titans clash in South Africa

In an article by Jan Vermeulen, the potential threat posed by Starlink, SpaceX's Low-Earth-Orbit (LEO) satellite network, to South Africa's mobile network operators, Vodacom and MTN, is discussed. The Independent Communications Authority of South Africa (Icasa) recently declared the use of Starlink in the country as illegal, citing the need for specific licenses. Regulatory expert Dominic Cull emphasizes that the stringent licensing process, coupled with equity ownership rules, has hindered Starlink's entry into the market. Cull suggests that despite public statements, Vodacom and MTN are exploring partnerships with satellite projects, acknowledging the competitive challenge posed by LEO operators. He warns of potential disruptions to the telecommunications supply chain if Starlink, known for retail-centric operations, launches messaging and mobile services as planned, diverting revenues away from local businesses. The article highlights the need for a forward-looking conversation about the impact of emerging satellite services on the local market..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..Starlink will eat Vodacom and MTN's lunch.By Jan Vermeulen.Handset-to-satellite communications technology being developed by Low-Earth-Orbit (LEO) network operators like SpaceX's Starlink could threaten South Africa's mobile network operators..This is according to telecommunications industry regulatory expert Dominic Cull, who told TechCentral that this fact is often overlooked when discussing Starlink's legality in South Africa..Read More: SA could have no safe drinking water in 5 years….The Independent Communications Authority of South Africa (Icasa) recently issued a formal government notice declaring that using Starlink locally is illegal..Icasa's notice is the latest in a somewhat antagonistic exchange between local suppliers importing kits and helping customers sign up for Starlink's regional roaming service..As an indication of the strained relations — one company calls itself IcaseSePush..According to Icasa, operators like Starlink need Individual Electronic Communications Service (I-ECS) and Individual Electronic Network Service (I-ECNS) licences to offer services in South Africa legally..Cull explained that an ECNS licence lets you build a physical network and sell wholesale access on it, while the ECS licence lets you deal directly with end-users..Industry sources have told MyBroadband that Starlink hasn't launched in South Africa because obtaining these licences is onerous..Currently, the only way to get the necessary licences is to buy them from someone who already has them or enter into some other commercial arrangement with a licensed entity..The Internet Service Providers' Association of South Africa (Ispa) — for which Cull is the regulatory advisor — decried this state of affairs in a recent media statement..Ispa said "second-hand" licences sell for as much as a million rands each, effectively keeping entrepreneurs out of the market and undermining government's transformation objectives..Equity rules.Additionally, acquiring a licence is not as simple as Starlink paying an existing licensee R2 million and picking up the paperwork — Icasa must approve the transfer..For that, Starlink's local subsidiary or partner will have to comply with ownership requirements stipulated in the Electronic Communications Act, which Icasa started cracking down on around ten years ago..The industry regulator warned in 2014 that it had noticed "an alarming trend of transfer of control and ownership applications that sought to diminish levels of equity ownership by historically disadvantaged groups (HDGs).".In response, Icasa stated it would no longer approve licence transfer applications that result in less than 30% equity ownership by HDGs..According to Icasa, this didn't have the necessary effect on the industry. By 2017, around 53% of I-ECS and I-ECNS licensees did not comply..Icasa then kickstarted the process to introduce regulations to address equity ownership in the telecommunications sector, beginning with a 2017 discussion document..Read More: 🔒Boardroom Talk – Come on Johann, even Warren Buffett now allows the world to hear his recordings.This culminated in draft regulations in 2020 that would make 30% HDG ownership insufficient for many Internet service providers — they would need to have 30% black ownership within 24 months of the regulations being promulgated..Icasa's proposed amendments were met with severe industry backlash..It was around this time that Starlink was looking to enter the South African market..Pre-orders for Starlink in South Africa first went live at the start of 2021, with the website stating that it aimed to launch by 2022..While Icasa's proposed equity ownership rule amendments were never introduced, the regulatory uncertainty was enough to sour Starlink on South Africa..The country's rollout was soon deprioritised..By November 2021, Starlink had delayed the South African launch to 2023. By December 2022, it was changed to "unknown"..From being one of the first African rollouts, South Africa is now one of the few African countries that does not have a target launch date..What's good for the goose…."The Authority, as a creature of statute, has a responsibility to protect its licensees and consumers by ensuring that there is fair participation andcompetition in the market," Icasa said in its notice declaring Starlink illegal..Cull broadly agreed with this, saying that whether you agree with the HDG ownership requirements or not, the rules must apply equally to all operators..This is even more so when you consider that Starlink and LEO operators like it represent a real threat to mobile network operators..Even though Vodacom and MTN won't say it publicly, their actions speak volumes.."Vodacom announced a partnership with Amazon's Project Kuiper," Cull highlighted.."Initially, their public statements were that it would be very useful in linking rural base stations and providing backhaul from those kind of hard-to-serve locations," Cull said.."But more recently they they've become far more bullish on the handset-to-satellite as being the Next Big Thing.".Through parent company Vodafone, Vodacom is also conducting trials with AST Spacemobile..MTN has been far quieter on the topic, with group CEO Ralph Mupita's only public comments being to the effect that they weren't too concerned about the threat of LEO systems..However, Cull said MTN is hedging their bets.."MTN, I note, has obtained trial licences from ICASA for spectrum for handset-to-satellite — without partnering with anyone — that is also something they're looking at," stated Cull..Read More: Unveiling the unconstitutional facade and celebrating the courage of fronting."I think the industry would be quite supportive of Starlink being subjected to the same requirements as they are because it is going to be a significant competitor. And that also goes for the other LEO operators [that I think will supersede Starlink]," Cull said.."I think the conversation definitely needs to start looking forward, to what is the kind of impact that these services will have on the local market.".Cull warned that although Starlink would purchase backhaul from local partners, it is known as a retail-centric player that likes to own the customer relationship..If Starlink launches messaging in 2024 and mobile voice and data services in 2025 like it plans to, it could disrupt a significant part of South Africa's telecommunications supply chain..Revenues that would've gone to local businesses would instead go to a foreign player.."From a national economic perspective, in terms of revenue, there are challenges with that approach for us as a country. I'm not sure it's something we would welcome," he said..Cull also said that Ispa tried to contact Starlink regarding reseller agreements for local ISPs.."To say, 'We'd love to engage in some conversation with you about whether we can resell your services and whether we can fit into this value chain that you're proposing,'" said Cull..However, much like the South African media, Cull said they received no response from SpaceX on the subject..Read More.🔒Musk's xAI: A Billion-Dollar gamble against big tech's AI supremacyRoedean's affiliation with Ummah Heart raises concerns over alleged Hamas support: Richard WilkinsonGovernment spending on traditional leaders sparks controversy.This article was first published by MyBroadband and was republished with permission

Starlink’s satellite saga: Legal battles and telecom titans clash in South Africa

Related Stories

"BEE pits black against white": The trailblazer who says empowerment got it wrong — Sam Montši

How Leon Kluge, SA’s unofficial ambassador for Cape flora, struck gold at Chelsea for the third time

Trump's US health aid overhaul meets reality in Mozambique

Viv Vermaak: Phala Phala, games of steal and plunder