by Starlink’s expansion in South Africa has suffered a major setback. The satellite company officially withdrew from regulatory hearings, which were led by the Independent Communications Authority of South Africa (ICASA).
ICASA Hearings and SpaceX’s Withdrawal
ICASA convened these hearings to gather industry input. The goal was to establish a registration process. This process would affect international satellite operators. These operators seek to provide services directly or via local partnerships. SpaceX, Starlink’s parent company, notified ICASA on Wednesday evening. They stated they would not participate in the oral hearings. This notice followed SpaceX representatives’ failure to appear. They were scheduled to present that morning.
The 30% Local Ownership Hurdle
Starlink’s satellite internet service is accessible in South Africa. However, the company lacks official approval. A significant hurdle is South Africa’s 30% local ownership requirement. SpaceX has openly criticized this requirement. They see it as a barrier to entry. In a submission to ICASA on January 28, SpaceX argued against the regulation. They claimed it excludes foreign satellite operators. This particularly affects those with direct-to-consumer models like Starlink. The company maintains its global policies prohibit local shareholding. This makes compliance impossible.
SpaceX contends that the ownership structure is an obstacle. This remains true even when operators meet Broad-Based Black Economic Empowerment (B-BBEE) requirements. They also invest in programs benefiting disadvantaged communities. SpaceX urged ICASA to align its regulations with the ICT sector code. This code allows for equity-equivalent programs. These programs serve as an alternative to local ownership. SpaceX stated that removing this barrier would increase foreign investment. It would also support industry growth and encourage competition. Innovation would also receive a boost.
Political Tensions and International Attention
The controversy surrounding Starlink’s exit has escalated amid broader political tensions. Musk made this accusation in a social media post, claiming that South Africa has “openly racist ownership laws.”
This intensified debates over B-BBEE policies. The recently signed Expropriation Act also came under scrutiny. Newly appointed U.S. Secretary of State Marco Rubio announced his withdrawal. He was scheduled to attend the upcoming G20 summit in South Africa. Rubio cited concerns over land reform and an anti-American stance. President Cyril Ramaphosa spoke with Musk. He aimed to address “misinformation about South Africa.” This particularly concerned land reform. However, Starlink expansion in South Africa remains uncertain. SpaceX has not provided a reason for boycotting the hearing. ICASA’s hearings will continue until Friday. Various industry stakeholders are scheduled to present their views.
Musk’s Stance on Equality Laws
Elon Musk’s attacks on Black Economic Empowerment (BEE) laws may be delaying Starlink’s expansion in South Africa. These policies aim to mitigate racial inequalities formed under apartheid. They require foreign investors to allocate 30% of equity to Black-owned businesses, which is necessary to qualify for a license. Solly Malatsi, minister of communications and digital technology, suggested a possible solution. He proposed allowing Starlink an exception from empowerment rules. Malatsi mentioned expanding telecoms sector exceptions, which are known as “equity equivalent programs.”
Industry Perspectives and the Future of Starlink
ICASA is criticized for focusing on satellite services. Critics say it should adopt a broader industry approach to licensing. The Association for Communications and Technology (ACT) highlighted this issue. They argued that ICASA’s review process is flawed and could benefit some but not others. ACT advocates for uniform licensing rules that should apply to all players. This would ensure a fair playing field. The future of Starlink’s expansion in South Africa depends on resolving these regulatory and political challenges.
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