Starlink standoff: South Africa is missing out and falling behind – Katzenellenbogen

Starlink, the satellite internet provider owned by SpaceX, is revolutionizing internet access worldwide. However, South Africa is facing licensing delays due to a 30 percent ownership requirement by historically disadvantaged groups. The standoff between SpaceX and the government is causing the country to miss out on potential revenue, job creation, and expanded educational opportunities. While other African countries rapidly issue licenses, South Africa risks becoming one of the few left behind. It’s time to reevaluate the regulations and learn from Kenya’s example to benefit from this game-changing technology.

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Starlink Challenges the State

By Jonathan Katzenellenbogen*

Starlink is the satellite internet provider owned by Elon Musk’s company, SpaceX. It can provide fast high-quality internet service to most places on earth. The company is licensed as an internet provider in many countries and is rapidly gaining regulatory approval in others.

But in South Africa there are licensing delays, although many in the country already have access to the service. So far Starlink has not even applied for licences from the regulator, the Independent Communications Authority of South Africa, ICASA. What is holding this up?

To be granted a licence the Electronic Communications Act requires an internet provider, in this case a local subsidiary, to be 30 percent owned by historically disadvantaged people. By law this group includes black people, women, the disabled, and youth. Starlink has not said in public that this is the hurdle, but ICASA and the Communications Minister, Mondli Gungubele, have emphasised this in their statements on the issue. There have been talks between ICASA and SpaceX, but we have seen no progress yet.

For the past few months there has been a standoff between SpaceX and the government. And there are no signs that it will end soon. It is legal to receive the Starlink signal in South Africa, but illegal for the signal to be distributed across the country. But South Africa cannot prosecute Starlink, as it is a US-based entity over which it has no jurisdiction.

Read more: Elon Musk won’t pay bribes to ANC cronies – so SA to miss out on Starlink’s cheap, fast internet broadband from space

Few countries

South Africa could end up being one of the few countries not to license Starlink, along with the world’s most authoritarian societies, such as Afghanistan, Belarus, China, Cuba, Iran, Iraq, North Korea, Russia, Syria, and Venezuela.

With the stand-off, SpaceX and the country lose. SpaceX could possibly generate more revenue if it were licensed, and we would derive far greater benefits if they had a local presence.

If Starlink were licensed in South Africa, the service would roll out on a far larger scale with greater speed than is the case at present. SpaceX would make a tax contribution, create jobs, and give access to broadband for those in remote rural areas, which would expand educational and job opportunities. Those in need of a lightning-fast service would benefit. And there would be greater competition between internet providers, which could lead to lower prices for broadband.

Unlike us, other African countries have been rapidly issuing licences for the service. Last month Starlink was granted a licence in Kenya and earlier in the year Nigeria, Rwanda, and Mozambique gave approval. Most of the African continent will have issued licences by the end of next year.

Kenya had an ownership law that was similar to that of South Africa’s empowerment requirement, but it was dropped last month. The end of the requirement that 30 percent of any information technology investment by foreigners had to be held by Kenyan citizens has paved the way for investments by Starlink, Amazon and network operator, Airtel, according to the website Kenyan President William Ruto said the requirement was dropped in order for the country to become “an attractive investment digital hub” and to advance the knowledge economy.

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There has to be a lesson in that for us.

Whether the government likes it or not, SpaceX can live without applying for a licence, and many South Africans will still receive the service. It is a reality that many companies simply do not allow external equity partners, for multiple reasons.

SpaceX would probably prefer to gain regulatory approval for Starlink, as it wants to be viewed as a good global citizen. But it can continue to broadcast its signal into South Africa whether or not it has a licence, and there is not much the government can do about that.

In extreme and unlikely circumstances, there could be big trouble for Starlink. Its satellites could be shot down by countries with the capability to do so. But there are no signs that we can do this, and besides, it might be a bit of an overreaction which would create masses of space junk which risks colliding with other satellites.

Another option would be to block the Starlink signal, something that Russia does in parts of Ukraine, but that might interfere with the service for our neighbours. Our government could change the Electronic Communications Act to make reception illegal, but that would come across as repressive.

Specific GPS locations

Reportedly, Starlink can switch off the signal to specific GPS locations, but one of the big selling points of its roaming service is that it can be received outside the country of your residence. A significant market for the product is providing internet access for aircraft and boats. It would be reluctant to penalise those who might be using the service in South Africa but reside elsewhere.

It is the roaming option on Starlink that allows South Africans to use the service. If you go to the Order Starlink web page and put in your South African address and press Order Now, an invitation to reserve our Starlink with a $9 deposit pops up and says, “Service date is unknown at this time.”

But if you can have the Starlink kit – the dish, router, plus cables sent to an address in a country where the service is licensed, you can then have it sent to your home in South Africa. And from there it is all plug and play and, pretty much, away you go, with a You Tube video and a phone app for guidance. There are a number of local firms that import the kits on behalf of clients.

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Starlink has brought about a revolution. Internet service can be provided without government permission. The big networks, militaries, and big corporations use satellites for communications and internet service, but until Starlink became available it was not available to consumers. Most of Starlink’s customers are households.

Amazon has plans for a satellite internet service and China also wants to launch a constellation of satellites. Will our rulers also exclude these companies if they do not meet the 30 percent empowerment rule?

New technologies often create their own laws, which render governments powerless. There is little the government can do about Starlink, as it can be used without their approval. What the stand-off shows is that our ruling party is willing to damage the country for the benefit of a few who would be empowered with equity stakes.

It is time to follow Kenya’s example.

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*Jonathan Katzenellenbogen is a Johannesburg-based freelance financial journalist.

This article was first published by Daily Friend and is republished with permission