Starlink operator SpaceX “cannot undermine the sovereignty of South Africa” if it wishes to operate in the country.
This was the message from Khusela Sangoni-Diko, chairperson of the Portfolio Committee on Communications and Digital Technologies, during a wide-ranging interview with ITWeb TV.
She also reflected on the workings of the committee under the Government of National Unity.
Sangoni-Diko, who is the former spokesperson of president Cyril Ramaphosa, explained that her key responsibilities include holding government accountable for the state of SA’s ICT sector and ensuring rural areas gain access to connectivity.
The conversation comes against the backdrop of the ongoing debate over Starlink’s possible entry into the country, with equity equivalent investment programmes (EEIPs) at the heart of the discussion.
Under current legislation, any company offering telecoms services must hold ECNS and ECS licences, which require at least 30% ownership by historically disadvantaged South Africans.
However, Starlink’s parent company, SpaceX, has not complied with this provision. Earlier this year, the Independent Communications Authority of South Africa (ICASA) held hearings to establish a transparent regulatory framework for the satellite sector. While Starlink was invited to make a presentation in February, the company did not attend.
Sangoni-Diko, a member of the African National Congress, also raised concerns about the timing of EEIPs being gazetted in the ICT sector by minister Solly Malatsi of the Democratic Alliance, who in May proposed that ICASA review the role of EEIPs as a mechanism to accelerate broadband access.
“We felt that those [the proposed policy directives] were designed with the sole intention of trying to accommodate Starlink’s entry into the country,” she said.
“The timing was very curious. When he gazetted those proposed policy directives, it was immediately after the president had that infamous meeting at the White House. I think before the president’s delegation had landed back in South Africa, we woke up to these proposed policy directives.”
Malatsi has since reiterated that the draft policy directive isn’t meant to “deviate” from broad-based black economic empowerment. He also described the timing of gazetting the directive, which coincided with the South African delegation's visit to the US, as “purely” coincidental.
Long-term requirement
Sangoni-Diko stressed that EEIPs are not new. “They have been there. They are used in a number of industries, such as the automotive industry. I know that some of the OEMs [original equipment manufacturers] in our sector use them. If I'm not mistaken, the likes of companies such as Microsoft and Amazon have got equity equivalent investment programmes.”
For Sangoni-Diko, the real issue lies in regulatory compliance. “What remains a burning issue is a single operator called Starlink that does not want to comply with the laws of the Republic. In this case, I'm referring specifically to the Electronic Communications Act (ECA).”
While not opposed to EEIPs, she emphasised that due process must be followed. “We are saying that the law, as it currently stands, must be implemented and if minister Malatsi wants to do away with the 30% in the ECA, then he should follow the correct route and come to Parliament to change laws. We are very resolute that we cannot have our sovereignty being undermined in this manner by a single company.
“Because you know, as well as the rest of us do, that there are a number of other companies that have low Earth orbit capabilities, many of them that are testing in South Africa. We don't have any of those companies coming to us and saying the 30% equity shareholding is a problem.
“Hence, we believe that as the minister looks at the submissions − I know he said he's got 19 000 submissions on his desk − he needs to always remember that he cannot act ultra-vires.
“He has to act within the law. If the ECA must be changed, then that's the conversation we'll need to have at that particular time.”
Managing SOEs
Sangoni-Diko also addressed issues facing the state-owned enterprises (SOEs) under the Department of Communications and Digital Technologies (DCDT), including the South African Post Office, State Information Technology Agency, Broadband Infraco, Sentech, ICASA and the South African Broadcasting Corporation (SABC).
“You'll know that the DCDT [Department of Communications and Digital Technologies] is quite a huge department that has over 13 entities, which would include amongst them entities such as the SABC, Post Office, ICASA, Broadband Infraco and so forth.
“In terms of our mandate, I think as Parliament, it's three-pronged. So, it’s obviously law-making, which is our primary mandate, and secondly, executive oversight, which is really ensuring government does what it’s supposed to do.
“And then finally, public participation, because that's ensuring the voice of the people is heard in Parliament. And indeed, when we hold government to account, it's in their interest. We also do pay oversight over the sector as a whole.”
She said the Post Office had failed to adapt to shifts in its environment, but still plays a vital role in under-serviced communities. “It's still got a huge footprint in excess of 640 branches across the country. And many people, especially in the rural areas, look to the Post Office for service.”
Sangoni-Diko highlighted an untapped opportunity: “I mean, you have a courier servicing industry in this country that's in excess of R3.5 billion per annum. Just PEP stores alone move in excess of 30 000 parcels per day. That is the market of the Post Office.
“We are hoping that [the Post Office] is going to exit the business rescue process quite soon. We are hoping they're going to utilise the huge digital technology infrastructure they already have.”
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