After the Bell: recalculating… rerouting on Starlink

So … hold on to your hats, I’m going to do something I very seldom do. I’m going to CHANGE MY MIND. It’s terrible I know, but every now and then, you should try it – it’s mind bending. Literally. 

As the old joke goes: I used to think indecision was the key to flexibility… but now I’m not so sure. 

To digress for a moment, changing your mind is actually a good thing, even though it has a bad rap because somehow it feels inconsistent and indecisive. In fact, one of the proven fallacies of life is that people don’t change their minds enough. I consider it a matter of pride that my opinions are like software updates – frequent, inconvenient and I often forget why I installed the last one.

In any event, I’ve written in the past that SA should allow Starlink to operate locally, mainly on the basis that it’s a more efficient method of connecting rural dwellers to the internet. The gap between the ability of urban and rural dwellers to connect to the internet is falling as rural dwellers have joined the global rush for smartphones. 

The Global System for Mobile Communications Association (GSMA) report in 2024 found that as of 2023 around 56% of adults in rural areas in SA were mobile internet subscribers, compared to 77% in urban areas. This is not a huge proportion, but the rural-urban gap has shown slight improvement over the years — reducing from 43% in 2017 to 32% in 2019. The progress has been modest since then, the report found. In some regions, the divide has even widened; for instance, in sub-Saharan Africa, the gap increased from 49% to 54% in 2023, reflecting a reversal to pre-pandemic levels. 

But this is not actually the point; the problem is cost. There are lots of ways of skinning this cat; costs and contracts vary widely. But essentially, it costs about R70 to download one gigabyte (GB) data on a smartphone, compared to around R1.50/GB on a fibre network. This R70/GB is high by international standards, but even at the international rate, which is about 30% lower, it’s still face-rippingly expensive to use the 5G or even 4G network for basic work internet. 

That is not going to change much, I don’t think, for the obvious reason that unit economics of internet access for rural dwellers is just different to urban areas. There are ways to get around this problem using terrestrial systems, but Starlink would solve this problem very quickly and very easily. In broad principle, it’s ridiculous that SA has not licensed Starlink.

But there is a problem now. The owner of Starlink, Elon Musk, has become a political figure. You can agree with his views or disagree with them. But Musk’s decision to join the administration of Donald Trump means Starlink is now effectively part of a political and national machine. 

You could say, that is partly true of any large business: they are governed by the laws of their home state. But in democracies at least, there is a difference between public and private realms; different incentive systems operate. If Musk continues to be associated with the Trump administration, it effectively introduces a new political risk to the equation. Just ask Ukraine. 

And there is an alternative coming: Project Kuiper. Project Kuiper is basically Amazon’s competitor to Starlink, and the first operational launch took place on a United Launch Alliance Atlas V rocket from Cape Canaveral, Florida, late last month. 

What I didn’t know about this project before the launch is that the Federal Communications Commission is requiring Amazon to deploy at least half of its satellite constellation – approximately 1,600 satellites – by 30 July 2026, and the remainder by 30 July 2029. That is just amazingly fast. 

Obviously, Kuiper is massively behind Starlink, which has already deployed more than 8,000 satellites and serves 5 million-plus users globally. The pricing plan for Project Kuiper has not been announced, but the pricing of the standard terminal was: about $400. That was much less than Starlink’s $600.

But, then, guess what happened? Starlink reduced its prices for terminals to $339. Starlink prices are comparable to high-end fibre contracts, but I bet those will come down too by the time Kuiper gets properly operational. Kuiper satellites will sit higher in the sky, but other than that, the two systems are pretty comparable. 

The point is that SA, and the world for that matter, will soon have a choice. When President Cyril Ramaphosa met Musk last year, Musk was in a position to demand to be the sole provider of this unique service. But that power will diminish as Kuiper and many other projects come on line. There is a good argument that rather than bowing down to Musk’s current requirements, SA should hold its horses a bit until competition has taken hold. 

You could say, “well, it’s not much of a choice”. It’s true that Amazon’s founder Jeff Bezos is also a big-time billionaire and also seems to be in the thrall of the Trump administration. But the difference is that Amazon is already very active in SA and has been, generally speaking, a model corporate citizen. Bezos is also not the CEO – although he is the executive chairman and does own 8.6% of the company. But compare that to Musk who owns approximately 42% of SpaceX, the parent company of Starlink.  

It’s fantastic that rural South Africans (like me!) and Africans for that matter, will at last be able to really tap into the world on a truly functional basis. Like telephony, this tech is going to be life-changing. It’s fantastic that entrepreneurs like Musk have made this happen. Kudos to him; it’s a fabulous achievement.

But any and every country should guard against becoming beholden to agents of a political party or government, whether they are bonkers billionaires or autocratic states. And sometimes paying the developmental cost is a price worth paying. DM