Bad news for rural Internet services in South Africa

Low-earth orbit (LEO) satellite services could pose a major threat to many of South Africa’s rural Internet service providers in the next few years.

However, there may also be an opportunity to leverage this emerging technology to enhance their current offerings to provide customers with better broadband — where LEO providers are willing to partner for local rollouts.

In South Africa, rural Internet services rely heavily on Wireless Internet Service Providers (Wisps) selling Wi-Fi-based fixed-wireless access (FWA) products.

These companies use tall masts with specialised radio equipment to provide Internet connectivity. They communicate over the unlicensed Wi-Fi spectrum to antennas on poles or roofs of farms, game lodges, and other rural businesses.

While FWA has undoubtedly proven useful, the technology now falls well short of the capabilities and value of fibre-to-the-home (FTTH), fixed-5G, or fixed-LTE when similarly priced.

One of the largest FWA providers in South Africa — Herotel — charges from R499 for a 4/2Mbps line. There are a plethora of FTTH and fixed-5G services offering well over 20Mbps at that price point.

Herotel’s top-end 10/3Mbps product costs R999 per month, which could easily get you an FTTH package with speeds of 200Mbps to 500Mbps in the city.

Some people in highly remote areas have only geosynchronous (GEO) satellite Internet packages available.

These are even more expensive, have strict fair usage policies (FUPs), and are typically only available on long-term contracts, sometimes with high installation fees.

To address these issues, a number of companies have developed LEO satellite broadband services, which are expected to revolutionise Internet connectivity in rural areas.

The biggest and most well-known LEO service is SpaceX’s Starlink, which already has over 7,000 satellites beaming connectivity to more than 5.3 million customers globally.

Starlink has provided tangible results showing that LEO technology can support significantly faster speeds, more bandwidth, and reduced latency at prices competitive with fibre and mobile broadband.

For fixed applications, Starlink is specifically focused on households and businesses in remote areas — where Wisps and GEO satellite providers currently dominate.

Despite not officially launching in South Africa and being considered illegal by the country’s communications regulator, several thousand people have managed to use Starlink through its roaming service in South Africa.

Many of them previously used Wisps or even fixed-LTE services and have praised Starlink for its superior speeds and value.

Q-Kon Africa Group CEO Dawie de Wet has calculated that Starlink’s initial planned fleet would theoretically be capable of supporting 200GB of monthly data traffic at 10Mbps for well over half a million South Africans.

Therefore, he anticipates that Starlink alone will “certainly” impact the revenues of smaller ISPs and Wisps, if it ever launches locally.

De Wet recommended that these companies should embrace LEO technology and work it into their offerings.

However, that is not currently possible with Starlink, which sells its products directly to customers to keep costs down and have full control over the user experience.

The good news — with big maybes

The only approved LEO service currently in operation in South Africa — Eutelsat Oneweb — is focused solely on large businesses and enterprises.

Its products are geared towards optimal performance and redundancy using larger and more expensive equipment than Starlink.

While Starlink has a significant headstart in the consumer space, there are several companies looking to make a play in this industry in the coming years.

Among them is Amazon’s Project Kuiper, which plans to launch its first batch of 27 LEO satellites for commercial operation as soon as Wednesday, 9 April 2025.

Based on its track record in South Africa, Amazon does not appear to be having any issues with navigating the country’s complex local business ownership rules.

The company has had a local presence since the early 2000s, having built a key part of its world-leading cloud services businesses with a team in Cape Town.

It has also hosted Amazon customer support centres in South Africa for several years and rolled out a local e-commerce marketplace in May 2024.

Amazon also appears to be more willing to use third parties to resell its services — at least initially.

However, Project Kuiper’s confirmed partners at this stage are large and established telecoms businesses — including Vodacom and its parent company Vodafone — rather than small local ISPs.

Even if Vodacom acts as a wholesale reseller of the service to smaller companies, it would add another layer of cost to the offering, potentially reducing Kuiper’s competitiveness with Starlink.

Another company that could stake a claim in South Africa is Chinese LEO operator Qiafan, officially known as SpaceSail.

It already has nearly 100 operational satellites and has confirmed deals to roll out services in Brazil and Kazakhstan.

SpaceSail is currently in talks to launch in more than 30 other countries, which could potentially include South Africa.

Like Amazon, the Chinese are no strangers to South Africa’s business environment, particularly the telecoms industry.

Local cellular infrastructure is dominated by Huawei, whose network equipment is used by all the country’s mobile networks.

In Brazil, SpaceSail has signed a memorandum of understanding with the state-owned telecoms operator Telebras.

That suggests it may also be willing to launch locally through partnerships, albeit with larger players rather than small and specialised providers.