Key Takeaways
- The Democratic Alliance (DA) had planned to include Elon Musk’s Starlink in the South African market as early as 2023
- The DA proposed to improve access and affordability to information and communications technology (ICT) by rolling out fibre optic networks, investing in 5G networks, and developing clear ICT policy and regulations
- The Independent Communications Authority of South Africa (Icasa) was proposed to regularly make spectrum available through transparent and competitive auctions
- The DA’s proposal was rejected by other parties in the multiparty charter (MPC) coalition due to concerns about corruption and the appointment of a specific service provider
- Communications and digital technologies minister Solly Malatsi’s directive to relax BEE policies in the ICT sector has been met with opposition from the African National Congress (ANC)
Introduction to the DA’s Plans
The Democratic Alliance (DA) had set its sights on bringing Starlink into the South African market long before communications and digital technologies minister Solly Malatsi’s directive to relax BEE policies in the information and communications technology (ICT) sector. The Sunday Times has seen the DA’s confidential submission to the multiparty charter’s (MPC’s) national convention, which reveals that the party had plans to include Elon Musk’s low-orbit satellite company in 2023. The DA proposed to the MPC that a new government enlist Starlink to expand access to high-speed broadband internet and address regulatory barriers stifling business.
Proposed Improvements to ICT
The DA also proposed an improvement of access and affordability to ICT by pursuing the extensive rollout of fibre optic networks, supporting long-term investments in 5G networks, and developing and implementing clear ICT policy and regulations to address market inefficiencies. The document also proposed that the Independent Communications Authority of South Africa (Icasa) should regularly make spectrum available through transparent and competitive auctions. This comes as the DA has again clashed with the ANC following Malatsi’s directive to Icasa to relax BEE policies in the ICT sector.
Rejection of the DA’s Proposal
The MPC was an initiative by the DA to bring together several parties to oust the ANC from power in the months leading up to the 2024 elections. However, the coalition was thwarted when the parties failed to gain a majority at the polls. A leader who participated in the MPC’s negotiations for the new government said the DA’s Starlink proposal was rejected by parties in the coalition. The leader stated that the proposal was rejected due to concerns about corruption and the appointment of a specific service provider, which was seen as inappropriate.
Response to Malatsi’s Directive
DA federal council chair Helen Zille told the Sunday Times that Malatsi’s decision was in line with the DA’s policies that provide an empowerment alternative to the ANC’s broad-based BEE policy. She added that decisions made by Malatsi are within his legal and constitutional purview as minister. Zille also stated that the use of Starlink was intended to provide free internet to poor rural communities and recognize the crucial role of connectivity in getting people out of poverty and unemployment.
BEE Rules and Starlink’s Proposal
BEE rules in the telecommunications sector meant that Musk would have to sell a 30% stake to black investors if his company was to get a licence to operate in South Africa. Business Day previously reported that to counter the BEE laws, Starlink proposed to trade, industry & competition minister Parks Tau that it would connect about 5,000 rural schools in South Africa as part of the benefits it said the country would accrue from having it operate in Africa’s largest economy. In June, Ryan Goodnight, senior director of Starlink Market Access, said that if equity equivalent investment programmes (EEIPs) were recognised for individual licence holders, Starlink proposed to provide more than 5,000 rural schools with fully funded Starlink kits and service.
ANC’s Reaction to Malatsi’s Directive
Reacting to Malatsi’s directive, the ANC this week said that of particular concern was the gazette’s proposal to create exemptions or alternative compliance mechanisms to the 30% HDG ownership requirement. The ANC stated that such provisions would allow certain operators, notably foreign satellite providers like Starlink, to bypass core transformation obligations. The ANC also stated that South Africa has invested decades in building an ICT sector that promotes inclusion, localisation, SMME support, and equitable ownership, and that weakening these obligations does not modernise the sector, but risks reversing hard-won gains and entrenching foreign dominance in a strategic national industry.