SpaceX urges ICASA to revise equity rules for Starlink launchSpaceX urges ICASA to revise equity rules for Starlink launch

SpaceX's satellite Internet service, Starlink, will join the Independent Communications Authority of South Africa's (ICASA's) public hearings next month in the hope of advancing its satellite Internet services in the country.

The hearings will focus on a proposed new licensing framework for satellite services in South Africa.

Ahead of the hearings, Space X has in a written submission told the regulator that it ought to rethink rules requiring 30% shareholding by "historically disadvantaged" groups, part of the country's black economic empowerment regulations.

South Africa's broad-based black economic empowerment (B-BBEE) policy framework is designed to promote economic transformation and enable meaningful economic participation by previously disadvantaged groups through increased participation in ownership and management structures. 

Space X has argued that maintaining this rule could deter international investment in South Africa's telecommunications sector.

Dated November 12, 2024, Space X's submission said all processes had been made to launch Starlink in the country aside from the registration framework emanating from the required network and services licenses, delaying its launch.  

SpaceX highlighted that the existing regulations mandate that companies serving end-users must acquire an electronic communications network service (ECNS) license, an electronic communications service (ECS) license, and a broadcasting service license – each requiring significant local black ownership.

Related:South Africa could amend law blocking Starlink entry

Section 3(2) of the Electronic Communications Act (ECA), states that license applicants need to include the percentage of equity ownership to be held by persons from historically disadvantaged groups, which must not be less than 30%.

Space X highlights global policies

Space X's submission said many foreign satellite operators, especially those with direct-to-consumer models, have policies that prevent local shareholding, which effectively bars them from entering the South African market.

"This holds true even when these operators are eager to comply with B-BBEE requirements and invest in community initiatives," Space X said.

"By aligning the licensing and ownership regulations with the Information and Communications Technology (ICT) Sector Code – which recognizes equity equivalent programs as an alternative to local shareholding – ICASA could remove a significant barrier to foreign satellite operators," it continued.

The submission said that the alignment would increase foreign investment in South Africa and create broader industry benefits, supporting innovation, competition and long-term growth.

"It is our view that ICASA has erred in limiting the type of contributions that may be made and should be measured for the purpose of considering whether and to what extent a licensee has met the requirements of the ICT sector code and the provisions of section 9(2)(b) [of the ECA] by reference only to ownership," Space X's submission continued.

It said empowerment as envisaged in the B-BBEE Act and the ICT sector code is far broader and contributions other than equity are acceptable.

SA's push for Starlink

There has been a push for Starlink to launch in South Africa for some time now.

In October 2024, South Africa Minister of the Department of Communications and Digital Technologies (DCDT), Solly Malatsi, announced plans to amend the 30% law.

"It is my intention to issue a policy direction to the Independent Communications Authority of South Africa (ICASA) in terms of section 3(2) of the Electronic Communications Act, to clarify the DCDT's position on the recognition of equity equivalent programs, for urgent consideration," Malatsi said in a statement at the time.

"Giving millions of South Africans broadband access would therefore constitute one of the biggest empowerment programs the South African government has ever undertaken," he explained.

South Africa's Minister of Communications and Digital Technologies Solly Malatsi. (Source: South African government)

Prior to Malatsi's statement, the country's President Cyril Ramaphosa met with South African-born billionaire Elon Musk on the sidelines of the United Nations General Assembly in New York.

"Meeting Elon Musk was a clear intention of mine because I had spoken to him on the phone, and when I came to New York, I said I would like to meet him. It is a full process, some people call it bromance, so it's a whole process of rekindling his affection and connection with South Africa," the president said in the interview about his meeting with Musk.

ICASA hearings

ICASA will hold public hearings on February 5 and 6, 2025, to discuss a proposed new licensing framework for satellite services.

These hearings follow the publication of the proposed framework in the Government Gazette last August.

"By the closing date of November 12, 2024, the Authority received 38 written representations and a further seven after deadline. As a result of the interest shown in the initiative, the Authority resolved to still accept submissions post the closing date," ICASA said in a statement.