Key topics:
- SA law blocks Starlink without a local BEE partner.
- Rural areas lack reliable internet, forcing illegal Starlink use.
- Talks stalled after Musk’s clash with SA government.
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.
Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.
If you prefer WhatsApp for updates, sign up to the BizNews channel here.
Unless SpaceX South Africa gets a shareholder or partner who is recognised as historically disadvantaged, people in rural parts of the country will continue to be blocked from legally buying Starlink services.
In other words, the South African government has once again shown that it is willing to prioritise one BEE investor’s financial gain over the needs of entire communities.
“If a leading business figure like Elon Musk harbours the kind of unprogressive, racist views that we’ve witnessed and the peddling of lies that we’ve been confronted with, then we’re not going to pursue having his investments,” Presidency spokesperson Vincent Magwenya recently told Bloomberg.
Elon Musk own SpaceX, the company that operates Starlink.
Magwenya said that although Ramaphosa was eager to attract as much foreign investment as possible, the South African government would not allow it at the expense of the country’s constitution and values.
His remarks came after Musk posted a tart response on Twitter/X responding to President Cyril Ramaphosa’s assurances that the new expropriation without compensation act would not be used as a confiscation instrument.
“Why do you have openly racist ownership laws?” Musk said.
For SpaceX to obtain the necessary operating licences, it must either work through a local middleman or sell 30% of its local entity to an investor classified as historically disadvantaged.
According to the Electronic Communications Act, Icasa must pay special attention to the needs of women, opportunities for youth, and challenges for persons with disabilities, in addition to promoting broad-based black economic empowerment.
Because Starlink cannot legally obtain the necessary licences and does not currently have agreements with middlemen in South Africa, thousands of South Africans currently use the service illegally.
According to Statistics South Africa’s latest general household survey, only 1.7% of rural households had an Internet connection at home in 2023.
This is significantly lower than households in metros (23.8%) and urban areas (12.1%).
While 66.3% of households in rural areas had some kind of mobile data connection, this was also much lower than in metros (74.6%) and urban areas (76.1%).
The chart below summarises Stats SA’s most recent Internet access statistics from the 2023 General Household Survey
MyBroadband has heard numerous first-hand accounts of how much faster and more reliable the service is compared to older and more expensive satellite services.
In many cases, it was even preferred over fixed LTE as it was not susceptible to Eskom load-shedding.
We have also tested Starlink connectivity around the country, often measuring download speeds well over 100Mbps and upload speeds of about 20Mbps.
Unofficial Starlink import service IcasaSePush previously told MyBroadband that it has improved Internet connectivity in rural areas, including schools, farms, and charities.
IcasaSePush has sponsored schools with Starlink kits in areas where children had no other Internet access.
“Where children previously relied on postal education or travelled up to 200km daily to school, Starlink has enabled online schooling,” the company explained.
“This shift has broadened their learning frameworks, allowing access to diverse teaching styles and explanations beyond what their parents could provide.”
“Now, they can conduct research at school and learn from new perspectives, especially in subjects their teachers might need more expertise.”
IcasaSePush also provided PinkDrive with a Starlink kit, allowing the charity organisation to offer improved mobile cancer screenings in remote areas.
Where PinkDrive had to travel back to areas with cell signal to send X-rays to doctors for analysis, it can now instantly send images for diagnoses and provide patients with quick results.
On farms, Starlink has helped for personal, operational, and security use.
One of IcaseSePush’s customers in Limpopo has a farm with rhinos and other wildlife.
This farmer had no proper Internet solution for his surveillance cameras until he installed a Starlink.
“His home and all farm stores are now secure, and he can manage security from anywhere,” IcasaSePush said. “We are also exploring a project to monitor the endangered bearded vulture.”
Other Starlink customers on farms include an elderly couple in a remote KwaZulu-Natal location who previously had no way to communicate with emergency services or their family.
Talks derailed
Bloomberg reported that Starlink negotiators have backed off on talks with South Africa following the public quarrel between Ramaphosa, and Musk and Trump.
Communications minister Solly Malatsi previously announced that he would direct Icasa to implement equity equivalent programmes for the telecommunications sector.
SpaceX has supported this idea, saying that other sector regulators allow this as it aligns with the Department of Trade, Industry, and Competition’s guidelines for Broad-Based Black Economic Empowerment.
“This would not only increase foreign investment in South Africa but would also create broader industry benefits, supporting innovation, competition, and long-term growth,” SpaceX stated.
The change in tone between Musk and Ramaphosa comes after initial positive developments following a meeting between the two men.
In response to the article about the meeting, Elon Musk posted on Twitter/X that he would love to invest in and otherwise support South Africa.
Malatsi responded with his own post on Musk’s social media platform.
“We’re committed to broadening digital inclusion and exploring every avenue that will help achieve this while contributing to economic growth and jobs.”
While Malatsi’s proposal does not eliminate equity requirements, an equivalent programme would allow companies to fulfil the requirements of BEE ownership through a public or private scheme.
“After consultation with Icasa, the proposed policy direction will be published for comment as per the Electronic Communications Act,” Malatsi stated.
While those consultations are currently underway, it is clear that establishing an equity equivalence programme for the telecommunications sector is no fast-track solution.
Read also:
- đź”’ Starship setback: SpaceX rocket explodes in seventh test flight
- Trump and Musk look on as SpaceX launches sixth major starship test
- Starlink halts roaming plans in Africa, leaving South African users in limbo
This article was first published by MyBroadband and is republished with permission.
