Minister Malatsi’s bid to get Starlink deal into orbit is weighed down by opposition gravity

Elon Musk got more than 6,750 Starlink satellites into orbit and transmitting data, while Amazon’s Project Kuiper — the backbone of Vodafone’s sky internet plans — was still tying its laces.

The Project Kuiper plan is to get a constellation of 3,236 satellites up and running. Amazon needs to get half of them online in space by July next year or risk losing its Federal Communications Commission licence. The FCC is an independent agency of the United States federal government responsible for regulating interstate and international communications by radio, television, wire, satellite, and cable.

How many rockets has Amazon launched? Of the eight Atlas V and 38 Vulcan rockets booked with United Launch Alliance, none has been launched. The inaugural operations launch was scheduled for Wednesday, 9 April but was scrubbed because of inclement weather.

On the positive side, there are two prototypes in orbit from a 2023 launch that happened a month after Amazon signed the Vodafone deal.

So, for South Africa’s sky internet ambitions, that leaves Starlink as the only real player, with MTN quickly playing catch-up. But neither was at the Independent Communications Authority of South Africa (Icasa) satellite framework public hearings in February to advocate for themselves.

“Everyone has the wrong end of the stick in this one,” said Nomvuyiso Batyi, the CEO of the Association of Comms and Technology (ACT), a lobby group representing major network operators including MTN, Vodacom, Telkom and Rain.

ACT has been raising concerns about Icasa’s proposed satellite services licensing framework. “It was only us and AfriForum there for all of the hearings. SpaceX [the company that operates Starlink] was there but then withdrew their statements,” she said.

The issue on the table

At the heart of the dispute is the part of the Electronic Communications Act, which mandates that “the percentage of equity ownership to be held by historically disadvantaged groups must not be less than 30% for any potential licensee” in South Africa’s telecommunications sector.

This requirement poses a significant hurdle for companies like Starlink, which has shown reluctance to dilute its global ownership structure to accommodate country-specific requirements.

The minister of communications and digital technologies, the DA’s Solly Malatsi, has signalled his intention to issue a policy directive on equity equivalent investment programmes (EEIPs) in the information and communications technology (ICT) sector, positioning them as an alternative pathway to fulfil transformation goals while accelerating broadband access.

Malatsi maintains that such programmes are “permissible by law” and have “been the source of major investments in our economy” in other sectors.

“Claims that these proposals undermine transformation are baseless and false,” Malatsi asserted in a media statement shared with Daily Maverick. “The government’s Medium Term Development Plan, formally approved by Cabinet, has adopted the introduction of EEIPs in the ICT sector.”

Diko fires back

The Portfolio Committee on Communications and Digital Technologies, chaired by Khusela Sangoni Diko, responded with unrestrained criticism, accusing Malatsi of attempting to “bypass the Electronic Communications Act to appease recalcitrant business interests”.

In a scathing statement issued on Monday, Diko declared: “Minister Malatsi should know that when it comes to transformation in the ICT sector, the law is clear on compliance and that cutting corners and circumvention is not an option — least of all to appease business interests.”

She alleged that the minister’s “proposed directives and regulations are an attempt to undermine empowerment legislation by stealth” and pledged they would be “fiercely opposed” if this were found to be the case.

New connectivity frontier 

The stakes in this regulatory battle could hardly be higher. South Africa continues to struggle with widespread digital inequality, with many rural areas remaining disconnected from reliable internet services.

LEO (low Earth orbit) satellite technology offers the potential to rapidly expand connectivity to these underserved regions without the massive infrastructure investments required by traditional terrestrial networks.

Industry players have also weighed in on the debate.

MTN CEO Ralph Mupita has advocated for “regulatory parity among all communications service providers, including satellite operators” and the principle of “same service, same rules”, suggesting the telecommunications giant favours a level playing field that would include satellite operators.

MTN, together with Lynk Global, recently conducted Africa’s first satellite-to-phone voice call, demonstrating the technology's potential.

Read more: Africa’s first satellite-to-phone call connects the unconnected

This achievement was acknowledged by Diko, who nevertheless used the occasion to warn against an “overreliance and obsession with a single satellite provider” — a thinly veiled reference to Starlink.

A long time coming 

“The telecommunications landscape has fundamentally changed. Revenue in the sector no longer comes from voice services, but has shifted significantly to data services,” explained Batyi.

Because of this rapid evolution and the focus on new technologies and services like data, she believes that the current legislation, which includes the Electronic Communications Act, needs to be updated or shifted. This potential legislative change might be necessary to address new realities in the sector, possibly affecting how things are accounted for and how services are offered to consumers.

Batyi’s concern revolves around the fairness of the consultation process and whether all stakeholders are given a fair opportunity to contribute to the regulatory framework that would govern satellite services — and potentially the deals involved.

“We have published white papers suggesting ways to update the 20-year-old legislation but have been ignored. Now this Starlink thing is being pushed through with pressure from the top,” she says — alluding to the February meeting between President Cyril Ramaphosa and Elon Musk as being the catalyst for this debate.

Down to the line 

For now, South Africa’s regulatory framework remains unchanged, keeping Starlink and similar operators in a state of uncertainty regarding their ability to fully enter the market.

As the battle lines harden, both sides claim to be serving the national interest — Malatsi through accelerating digital access by embracing new technologies and investment models, and the portfolio committee through defending transformation laws they view as essential to meaningful economic change. DM