Business Maverick

AFTER THE BELL

Starlink will soon be available in all southern African countries – except South Africa

Starlink will soon be available in all southern African countries – except South Africa
A man tries to take a phone picture of SpaceX Starlink satellites in the night sky over Skopje in North Macedonia on 27 April 2020. (Photo: EPA-EFE / Georgi Licovski)

One of the great innovations of our age is Starlink, Elon Musk’s global satellite internet service. It allows internet coverage at extremely high speeds in very remote areas because it’s provided by a set of satellites. Hate him or love him, Musk’s idea is just amazing; so amazing that there are several competing services starting up around the world.

Starlink is being rolled out country by country as more and more satellites get put into orbit. So far, about 4,238 satellites have been launched in 80 blast-offs over the past three years. There has been almost nothing that has demonstrated the practical utility of rocketry more than this incredible service. For one thing, it has provided Ukraine with internet coverage absolutely crucial to the defence of its country following a Russian attempt to jam its previous communication system.

If you go to the Starlink map on the website, you can see when the services will be up and running in which country. In Africa, Nigeria, Rwanda, and Mauritius are already connected. All South Africa’s neighbours, the map says, will get Starlink either this year or next, as well as most of the rest of the continent. 

For people living in remote areas where it’s not possible to lay cable, this is an absolute game-changer. More than almost anywhere in the world, for Africans, this is manna from heaven.

But if you point the cursor to South Africa, it says “service date unknown at this time”. As a result of this curious exception, DA MP Dianne Kohler Barnard asked Communications Minister Mondli Gungubele what was going on.

What followed was a morass of politics and positioning and the usual equivocation. Barnard said Gungubele noted that “for Starlink to operate in South Africa, they require… individual IECS/IECNS applicants or licensees to have a minimum 30% equity ownership held by persons from historically disadvantaged groups”.

Telecommunications in South Africa is now essentially a closed market with high barriers to entry, which is one of the reasons South Africans pay excessively for their telecoms.

Well, said Barnard, this means it is clear South Africans will never receive free internet or data unless an ANC cadre or tenderpreneur provides it. 

“It is simply laughable that an international multibillion-dollar company must hand over at least 30% of its equity to the ANC government to operate a much-needed service within South Africa,” she wrote.

I get where she is coming from, but, as a matter of fact, this is not what the legislation says. Musk is not required to hand over 30% of the equity in the business to the ANC or to an ANC cadre or a tenderpreneur. Musk is required to hand over 30% of the equity to a black empowerment group.

Gungubele was simply stating the existing law, according to the Telecommunications Act, which requires all telecoms operators in South Africa – in almost all circumstances – to have a BEE partner. Barnard’s interpretation was the kind of deliberate, hyperventilating  extrapolation we have come to know and love from the DA.

Read more in Daily Maverick: After the Bell: South Africa’s R1.2-trillion investment problem

And in so doing, she misses the much larger and arguably much more important problem, which is how our BEE legislation is stunting investment, holding back innovation, limiting business and inhibiting education in rural areas. 

Not to mention that I can think of literally nothing more empowering for people all over South Africa than high-speed internet (up to 500 megabytes per second) that won’t go down during our endless rolling blackouts.

South Africa’s Telecommunications Act set up black empowerment rules during the advent of cellphone technology in 1996. The law actually says: “No application shall be lodged or entertained in respect of a licence to provide (local or international telecoms) unless such application is lodged pursuant to and in accordance with an invitation issued by the Minister by notice in the Gazette.” 

And so it goes on, with a huge catalogue of requirements and demands aimed at making sure the local cellphone industry stumped up huge amounts of lolly for the government and adhered to the government’s empowerment predilections. 

Telecommunications in South Africa is now essentially a closed market with high barriers to entry, which is one of the reasons South Africans pay excessively for their telecoms.

This country doesn’t want to embrace the future; it wraps investors in red tape and has tricky requirements which will require, among other things, giving up 30% of your equity.

So now the legislation, as it stands, establishes an incentive for both the government and the existing cell companies to resist the arrival of a new service: government doesn’t want to be accused of being “anti-transformation” by not demanding that Starlink gets a BEE partner, and the existing industry doesn’t want the competition.

Consequently, Gungubele, presumably with behind-the-scenes connivance of the existing industry, is happily hiding behind the provisions of the existing act to prevent Starlink from establishing itself in South Africa. 

What if…

Of course, Starlink could short-circuit all of this by getting itself a BEE partner, and I presume eventually they will. But, as of now, they have a mass of other priorities, like all of South Africa’s neighbours, for example, which have instantly recognised the utility – for Africans in particular – of having high-speed internet available in underserved areas.

Think for a moment about what a different approach might have looked like. Instead of hunkering behind the existing legislation, Gungubele (or actually his predecessors; he has only been in the job for a month) could have decided that, instead of placing hurdles in front of this new entrant to the market, they could have bent over backwards to make sure the service was available here first on the continent. 

Imagine what kind of message that would have sent out: here is a country keen on digital transformation; a country that wants to be at the front of the digitalisation queue; a country keen to use the enormous educational capacity of the internet to educate its citizens.

The problem is that this would have taken imagination and gumption and some bending of the existing rules to promote competition and improve service levels. But they couldn’t get it together, so now the message being sent out is exactly the opposite. 

This country doesn’t want to embrace the future; it wraps investors in red tape and has tricky requirements which will require, among other things, giving up 30% of your equity.

For all the slightly misplaced political bluster, Barnard has done one constructive thing: she has asked Gungubele to “amend these regulations to remove the archaic, irrational and ridiculous hurdles to progress”. 

That places a choice directly in front of Gungubele – it will be interesting to see how he responds. BM/DM

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Comments - Please in order to comment.

  • - Matt says:

    There is no discernible strategy for our country. I don’t see a picture painted of where we want to be, who we want to be, in 5 years, or 10 years time. In the absence of a goal, we bob around going nowhere. If we could get behind a big vision, just the movement would help to make clear what (was useful at the time but now) needs to go, and seeing positive things happen would build the momentum, and start to reinstate a sense of possibility…. and get us out of this frustrating, ongoing negativity.

  • Peter Doble says:

    This is a brilliant piece which absolutely sums up the entrenched and myopic attitude of the South African government. No matter how it might benefit the population and the economic tragedy which is holding the country back, the twisted ideological reasoning combined with an inherent bureaucratic block on any system that does not enrich the party or its members, is doomed to failure.
    It is apparent everyday from the illogical resistance to solar and wind power, despite enormous contributions to the infrastructure by wealthy nations, to an insistence on early 20th century attitudes which have proved to fail time and again. This is a vibrant country full of bright people and huge resources yet it is being held to ransom by a handful of warped politicians.
    There is only so much idiocy that the human psyche can take before the cup half empty is thrown in the face of realism.

  • stuart04 says:

    If you truly care about the upliftment of all South Africans you would make it a priority to ensure affordable internet access for all no matter how remote – unless of course you care more about your own enrichment and the few criminal cronies in your midst – We’ve seen this story over and over again – the mentality never changes and neither does the rot. RIP ANC

  • Jill.vandervelden says:

    Given how vulnerable South Africa is to load shedding and possible grid collapse and how remote the chances are that the powers that be will be able to address electricity concerns in the near to medium term, it is treasonous not to do whatever is necessary to get the Starlink service as soon as possible. Instead we have the authorities telling financial institutions to run scenarios for grid collapse where all internet services are out and payment systems across the country no longer function. But the obvious solution of getting Starlink is being ignored.

  • A Concerned Citizen says:

    Spot on, Tim. The ANC’s archaic BBBEE systems need to be removed to encourage investment and progress. The DA’s alternative, the Economic Justice Policy, is actually aimed at empowering those who need it most (most happen to be black, anyway), not just enriching a few black elite. The ANC and their policies are holding South Africa back, and it is becoming embarrassing.

  • Fran Gebhardt says:

    To highlight what this lack of political will means on the ground, I know a young woman who is working hard and living with her small daughter in an informal settlement near Cape Town who can’t even keep the family connection to her mother and grandmother going because of lack of simple internet technology being available in the family’s rural village in the Eastern Cape.
    It’s as simple as that. In 2023. And this amazing technology is just hanging up there waiting to be used. Shame on you ANC. “A better life for all”???

  • Dennis Bailey says:

    “amend these regulations to remove the archaic, irrational and ridiculous hurdles to progress”, and it’s not just telecoms. The ANC is the enemy of South African progress on all fronts. In KZN, we have 2 million kids going to school hungry and being sent home hungrier because of corruption. If there’s something that works, you can count on the ANC/EFF to trash it.

  • Rob Glenister says:

    Requiring a 30% BEE partner is tantamount to ” unless an ANC cadre or tenderpreneur provides it”.

  • Peter Smith says:

    So what will happen is South Africans will buy the modems in neighbouring countries and use it in SA. What the ANC don’t realise is that this is like solar power. It works without the government and they can’t stop it.

  • Graeme J says:

    I used Starlink connectivity in Antarctica in January 2023… yes, Antarctica. The network performance was extraordinary. It mostly equalled the performance delivered by our local fibre providers. Extraordinary. Get a wake up, ANC!

  • Carlo Fourie says:

    He won’t respond, simple as that. Until South Africans realise that the ANC government does not carry their best interests at heart, and punish them at the voting booths, nothing will change. In the end, the people get the government they deserve.

  • Ivan van Heerden says:

    The only imagination displayed by this ANC government is in finding new ways to rob the tax payer blind. Their racist, inefficient policies make the mess of apartheid look like a stunning example of how to build a country. Corporate South Africa, who sold their souls to their new BEE Tjommies, are equally complicit. They sit on their horse estates at Kyalami or Stellenbosch and wring their hands about falling profit margins while gleefully enabling the continuance of the ANC. It is shameful and embarrassing.

  • Stephen Paul says:

    So what is the difference in reality and not in theory, if Starlink has to place a tender through the cANCer government for a license to operate, between a BEE partner and an ANC cadre or tenderpreneur ?

  • Rod Murphy says:

    Starlink broadcasts from space. Why do they need anybodies permission to cover a country ??

  • Petrus Kleinhans says:

    It is a weird idea that the unattractive laws governing the South African business landscape conspires to suit local business and BEE elites. If this is extrapolated beyond Starlink, and to other companies looking to do business in Africa, it means that South Africa will surely lose more and more ground against other African nations. Mzanzi’s status as a business gateway into the continent will evaporate and other countries on the continent will blossom as a result.

  • friendleigh2 says:

    The Guvment would steal the stars if they could!

  • Dillon Birns says:

    Agree with Tim’s argument around government regulation and stifling investment – but I wouldn’t be so quick to say that Starlink itself is as great as it’s made out to be. Yes, the ability to connect remote areas is revolutionary, but that doesn’t mean those people living in these areas (which tend to also have lower incomes) will be able to afford the $595 (R10855,08) once-off installation fee and $42 (R766,24) monthly subscription. We shouldn’t be relying on Starlink anyway to be the sole means of connectivity for these people. Increased competition would see data and mobile prices decrease too, giving low-income consumers greater choice.

    • Zane Erasmus Erasmus says:

      How does it work in Nigeria and Malawi then?
      Connectivity takes literally a few minutes via a cell phone. There is no installation, really. The cost is for the dish that can be stood outside, on you car roof or house roof if you insist, a wi-fi router and a few cables. I’m not sure this costs as much as you say.

  • Shirley Gobey says:

    It is not a political bluster as you say, Barnard says it like it is without being “politically correct”.
    Its all about the ANC and only the ANC.

  • Jane Crankshaw says:

    Once again our BRICS membership and racist BEE policies are doing us not favours.
    One has to wonder, given our track record, if Starlink are not keen to negotiate “ incentives” for our ANC leaders and their pals!
    Our global reputation has fallen to “once bitten, twice shy”. – no one wants to touch us with a barge pole these days and I don’t blame them……

  • Don Andrews says:

    Not sure why it is always necessary for Daily Maverick journalists to snipe at the DA. While they are not perfect they are miles ahead of their competition. But DM seems to snipe at every opportunity. Disappointed that Tim Cohen needed to stoop to this level. Ditto Stephen Grootes.

    This puts me off subscribing to DM which I would do otherwise

    • Dietmar Horn says:

      “Not sure why it is always necessary for Daily Maverick journalists to snipe at the DA. While they are not perfect they are miles ahead of their competition. But DM seems to snipe at every opportunity.
      Disappointed that Tim Cohen needed to stoop to this level. Ditto Stephen Grootes.”
      Very well recognized! This question keeps coming up to me too.

    • Peter John says:

      I would agree – DM does seem to snipe at the DA more often than is justified

    • William Stucke says:

      Yes. And in this case Tim is simply wrong. It doesn’t matter to whom Starlink would have to hand over 30% of the equity, it’s still 30%.

      It’s possible that Starlink could change its whole business model and go into a partnership with a local company, but why should they? South Africa politicians seem to think that they can force the entire world to pander to their weird requirements.

      Do you know why the EASSy submarine cable, which was supposed to be the first to land in RSA, was delayed by years? Because the then DG of the Dept of Communications stated that “no fibre will land in South Africa unless it’s at least 51% South African owned”.

      Needless to say, telcos from the other countries that held shares like Sudan, Djibouti, Somalia, Kenya, Tanzania, Comoros, Madagascar, Mozambique, etc., were not amused.

      You can’t make this shit up! I was there and heard her myself.

  • Scott Gordon says:

    I can just imagine Elon going into the Dragons Den of the ANC .
    Yes , we like your product , and want 30% equity for no charge 🙂
    Peter Jones et al would love a deal like that .
    As far as I know , there are 2 types of Starlink set up , stationary and portable as used by the sailing / motor yacht community .

  • William Stucke says:

    Well, Tim, I see that you got in a gratuitous dig at the DA. Again. Well done.

    And you failed utterly to appreciate that giving 30% of Starlink (a privately held company) to a black empowerment group still means giving away 30% of the equity. How is that any different to what Ms Barnard wrote?

    “Of course, Starlink could short-circuit all of this by getting itself a BEE partner, and I presume eventually they will.” No, they won’t, because that 30% STILL APPLIES.

    A colleague, who already has the required IECS and IECNS licences has already tried. That’s not the issue. The issue here is that to be viable and to provide high speed connectivity, it needs an Earth Station. That Earth Station needs a spectrum licence. In line with ANC policy, ICASA amended the Spectrum Regulations in March 2015 to put in a BEE term:

    (3) An applicant shall be disqualified from the application process where such applicant:

    (d) has less than 30% (thirty percent) equity ownership by Historically Disadvantaged Persons (HDP) or is below a level 4 contributor (BBBEE status) in terms of the Codes of Good Practice published in terms of section 9(1) of the BBBEE Act;
    That wasn’t in the 2011 version.

    In addition, importing and selling telecoms kit that isn’t Type Approved by ICASA carries huge fines.

    Yes, Tim, you can go and buy a Dishy McFlatface, and pay much more for a mobile service from Starlink, and use it in RSA, but it still won’t be Type Approved, and is liable to be confiscated if found.

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