As South Africa’s telecoms regulator delays acting on a directive that could clear Starlink’s path into the country, the company is contesting its rejection in Namibia.
Starlink, a subsidiary of Pretoria-born billionaire Elon Musk’s SpaceX, is awaiting the outcome of a policy directive issued by communications minister Solly Malatsi in December, ordering the Independent Communications Authority of SA (ICASA) to allow alternative empowerment investment programmes to qualify for telecoms licences.
ICASA tells ITWeb: “There’s currently no update; the matter is still being attended to internally.”
The Electronic Communications Act requires companies to be 30% owned by historically disadvantaged individuals before they can be granted a telecoms licence − a stumbling block for Starlink’s bid.
However, an Equity Equivalent Investment Programme (EEIP) would enable Starlink to qualify for broad-based black economic empowerment status through, for example, investments in skills development. The mechanism has been used successfully by Dell, which recently had a R230 million programme recommended for approval by Malatsi.
Dell’s EEIP arrangement has, however, attracted the attention of the Portfolio Committee on Communications and Digital Technologies, which wants additional clarity on its bid.
Home-grown requirement
Malatsi’s December directive caused a stir, with the Portfolio Committee on Communications and Digital Technologies, EFF and ANC calling for its immediate withdrawal.
Committee chairperson Khusela Sangoni-Diko said the minister had neither the legal nor moral authority to implement what would amount to a reversal of the gains of democracy.
Presidential spokesperson Vincent Magwenya responded that the minister sought to accelerate broadband access to underserved areas and was not favouring any single company.
Amid the regulatory uncertainty, Starlink has already offered to create an empowerment entity, provide over 5 000 rural schools with fully-funded Starlink kits and service, and invest nearly R2 billion in local infrastructure.
Meanwhile, next door
At the same time, a source tells ITWeb that Starlink’s application to operate in Namibia has been rejected, with the regulator citing the operator’s lack of compliance with a 51% local ownership requirement.
In a letter to the Communications Regulatory Authority of Namibia – a copy of which is in ITWeb’s possession – Ben MacWilliams, director of Starlink Market Access, says the company has “taken the purposeful decision to establish a local entity in Namibia and apply for licences so that it will be held to the same regulatory, legal and tax standards as the incumbent operators”.
MacWilliams says more than 98% of public submissions supported Starlink’s entry. “The overwhelming public support for Starlink’s application clearly demonstrates Namibians’ urgent demand for innovative, high-speed internet to bridge the digital divide, empower rural communities and fuel economic growth.”
Starlink acknowledges it has global shareholding restrictions and cannot accept local ownership. “While Namibia’s framework encourages local shareholding, it allows for exemptions at the minister’s discretion. In this case, an exemption was not granted,” it says.
Starlink – which says it has 10 000 satellites in orbit – argues it can address a significant connectivity gap. An estimated 65% of Namibian schools lack reliable internet access, 80% of health facilities have 3G coverage or worse, and more than a million Namibians remain offline, particularly in rural areas.
“More than 30% of Namibians still lack access to the internet. For those who can access the internet, especially the 70% of Namibians in rural areas, reliability and speed are major issues. Namibia has some of the slowest fixed broadband speeds on the planet,” says Starlink.
Starlink adds that bridging this divide can reduce extreme poverty by 10%, increase gross domestic product by “multiple” percentage points and increase the likelihood of individual employment by up to 13%.
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