Starlink promises internet for rural SA schools — if BEE rules bend

In a letter to Trade, Industry and Competition Minister Parks Tau, Starlink’s senior director of market access, Ryan Goodnight, made a simple case: let us in under the Equity Equivalent Investment Programmes (EEIPs) instead of the traditional 30% local ownership requirement, and we’ll transform rural education connectivity.

“Today, millions of children are being denied access to education resources because South African broadband networks do not extend to the most rural parts of the country,” Goodnight wrote.

The deal? Fully funded Starlink kits and service for more than 5,000 rural schools, complete with installation and maintenance support through local South African companies.

But the Starlink letter also reveals the company’s growing impatience. Despite being “interested in providing high-speed internet to South Africa since we first deployed our constellation”, efforts remain grounded by what it calls outdated ownership regulations – a requirement that Starlink says it cannot meet while maintaining operational control across its global network. But you know this already.

Opening Malatsi’s box

At the centre of the situation sits Minister of Communications and Digital Technologies Solly Malatsi, who has tried to thread the needle between transformation imperatives and technological pragmatism.

During a parliamentary portfolio committee meeting on 27 May, Malatsi defended his policy directive allowing the Independent Communications Authority of South Africa (Icasa) to recognise EEIPs, arguing that the work “predates the events of last week [President Cyril Ramaphosa’s fateful visit to Washington]” and represents continuity rather than capitulation.

“The intention is to ensure a whole and consistent application of the B-BBEE Act and the ICT sector codes,” Malatsi told the committee, explaining that the directive aims to bring telecommunications regulation in line with what already exists in other sectors. Microsoft, IBM and Amazon already use EEIPs successfully in South Africa – why not satellite internet providers too?

Malatsi’s reasoning rests on section 3 of the Electronic Communications Act, which allows ministerial policy directives consistent with national policies. He argues that Icasa’s regulations have created a gap, failing to wholly consider the ICT sector code’s provisions for alternative pathways to transformation compliance.

Defending the empowerment dream

But if Malatsi thought his careful legal reasoning would satisfy critics, he was mistaken. The portfolio committee meeting descended into accusations of undermining South Africa’s transformation agenda.

Committee member Oscar Mathafa argued that the directives “dilute or undermine those particular hopes” of voters for social justice and equity, and Colleen Makhubele described the approach as “a denial of a constitutional right of a historically disadvantaged group to own the economy”.

Committee members also accused Malatsi of “trying to amend legislation using a ministerial policy directive”. Perhaps most damaging was an observation that “we are altering our legislation for Starlink whereas where it goes to operate in other countries it did not utilise this coercion”.

An industry body, the Association of Communications and Technology, has tried to stake out middle ground, supporting the minister’s effort to resolve regulatory ambiguity while insisting on “regulatory parity” for all players. Its chief executive, Nomvuyiso Batyi, who was critical of Malatsi in her last conversation with Daily Maverick, sent a careful statement: “We’ve supported the roll-out of satellite technology in South Africa, within the same rules that everyone else follows.”

The association’s support for EEIPs comes with a crucial caveat – implementation must be “transparent, consistent, and with an equal application of the law”.

Network operator ground offensive

Faced with potential satellite competition, South Africa’s network operators have been aggressive in demonstrating their commitment to reducing data costs and expanding connectivity. The numbers they presented to Parliament are impressive.

MTN claims a 46% price reduction on 1GB bundles since 2019, whereas Vodacom reports that effective rates have decreased by 50% over two years. Telkom says that per-gigabyte costs have dropped from about R99 in 2010 to R79 today, and Cell C has reduced data rates by more than 28% since 2023.

These operators are also making substantial infrastructure investments, spending more than R143-billion in the past five years alone – which means jobs, not just internet from the sky. MTN invests about R9-billion a year in capital expenditure, achieving 99% 2G coverage, 98.9% 3G coverage and 97.8% LTE coverage. Its 5G now covers nearly 45% of the population.

Vodacom has pledged R60-billion over the next five years for network development, expanding 5G population coverage from 20.6% in 2022 to 51.7%.

Telkom says its mobile network covers 85% of the population directly, extending to 99% through roaming agreements.

Rural connectivity

A focus on rural connectivity is particularly relevant in view of Starlink’s school promise. Vodacom’s rural coverage has risen from 89.63% in 2023 to 95.4%, with a target of 97%.

Rain, despite being the smallest operator, covers 61 million people with 4G and 21 million (35% of the population) with 5G.

Universal service obligation (USO) achievements also provide context. MTN claims a 100% USO scorecard achievement, having invested R380-million over the past decade. It has connected 1,360 mainstream schools and 140 special needs schools, also providing laptops, printers and projectors.

Vodacom has connected 3,000 schools, 1,500 beyond its obligations, and 934 of the 4,000 institutions required by new spectrum-allocation obligations. Telkom works with the government on SA Connect to connect 40,000 government institutions, and Rain has connected 2,166 public service institutions.

But there are problems that satellite providers like Starlink would largely avoid. MTN spent more than R4-billion in 18 months to secure its network against load shedding. Telkom reported more than 2,000 vandalised sites costing more than R300-million to repair.

Starlink’s infrastructure in space is immune to load shedding and vandalism, potentially offering more reliable service to rural areas. But this advantage comes at a cost – about R900 a month, based on pricing in Botswana, plus equipment costs of R3,200 to R6,700.

Operators want regulatory reform, fast-tracked spectrum access and infrastructure sharing. And they want OTT players (read: WhatsApp and Netflix) to finally pay up for riding their pipes.

For now, Starlink remains in orbit. Whether it lands with a bang or a crash depends less on tech and more on who controls the regulatory runway. And if you’re in rural Limpopo waiting for decent download speeds, you probably don’t care if it’s a billionaire’s satellite or a homegrown telco – you just want it to work. DM

This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.