Vodacom supports Starlink being blocked in South Africa because of BEE

Vodacom says satellite operators like Starlink should be held to the same standards as terrestrial operators, particularly regarding local ownership, control, social obligations, performance, and sanctions.

This is according to the Independent Communications Authority of South Africa (Icasa), which released its consultation document about a proposed licensing framework for satellite services.

Icasa received at least 47 written submissions to its initial discussion document, which sought input on the proposed licensing framework.

Companies that provided feedback include Afriforum, Amazon, Eskom, Liquid, Maziv, MTN, MultiChoice, SpaceX, Telkom, and Vodacom.

Vodacom pointed out that mobile operators already comply with B-BBEE requirements in South Africa, such as equity ownership and control limitations, as well as ICT Sector Code obligations.

It also noted that B-BEEE requirements formed part of the qualifying criteria for acquiring radio frequency spectrum in Icasa’s 2022 auction, in which Vodacom spent over R5 billion.

“Satellite operators should be subject to similar B-BEEE requirements for ground earth stations located in South Africa and for service provision,” Vodacom stated.

“​​If Icasa wishes to amend local presence or B-BEEE requirements, it should do so for all market players, including mobile operators, through a transparent consultation process.”

The Electronic Communications Act states that telecommunications operators offering services nationally must be at least 30% owned by historically disadvantaged groups.

However, Icasa published regulations in 2021 that would make anything less than 30% black ownership insufficient.

In the same breath that it announced these new regulations, Icasa suspended them to an undetermined future date, leaving them hanging over the industry like a proverbial sword of Damocles.

This regulatory uncertainty caused SpaceX to pause plans to roll out Starlink in South Africa. Where South Africa would have been among the first Sub-Saharan countries to receive Starlink, we will now be among the last.

There is evidence showing that SpaceX had been gearing up to launch in South Africa for some time, including the establishment of a local company.

CIPC records show that SpaceX registered a local entity in 2019 called SpaceX Internet Services South Africa (Pty) Ltd.

Win for Vodacom

Vodacom’s submission to Icasa shows that Starlink halting its South African rollout was precisely what it wanted.

While MTN, Maziv, and others agreed that all telecommunications network operators should be treated equally in terms of licensing requirements, Vodacom went a step further.

Vodacom advocated for guardrails to be established to govern how satellite services integrate into terrestrial infrastructure.

South Africa’s largest mobile operator said this is to ensure that satellite players would not harm existing services to consumers or the associated infrastructure investments.

“A prudent approach would be to consider satellite operators’ direct-to-device services as supplementary infrastructure providers to local licensees,” Vodacom said.

It used the term direct-to-device (D2D) to refer to communication services delivered directly to a smartphone or similar consumer-grade device.

Vodacom suggested that Icasa clarify that satellite operators who intend to provide D2D services need to gain the agreement of mobile network operators on mutually agreeable commercial terms.

It argued that this would help enhance mobile broadband availability in underserved areas, rather than Icasa imposing costly obligations on terrestrial networks to extend coverage to these regions.

“This approach could allow for a more efficient and cost-effective solution to bridge the digital divide,” Vodacom stated.

“In doing so, it is crucial that Icasa balances the push for innovative network architectures to meet these coverage goals with the need to maintain the quality of existing terrestrial services.”

Vodacom said Icasa must also protect spectrum usage rights and minimise the risk of harmful interference, both domestically and internationally.

The Starlink threat

Its inputs about direct-to-device satellite services suggest that Vodacom considers Starlink a much bigger threat than it has been letting on.

Vodacom previously told MyBroadband that it considers satellite communication a complementary service rather than a threat to its business.

“Key to our ambition to connect the next 100 million lives across our markets are satellite partnerships,” Vodacom said.

“We believe that satellite connectivity projects have the potential to enhance our rural connectivity plans as well as improve the stability and speed of Internet services in urban areas.”

Through majority shareholder Vodafone, Vodacom has announced partnerships with AST SpaceMobile and Amazon’s Project Kuiper to fill coverage gaps and launch D2D services in future.

However, both these projects are years behind Starlink.

While some exciting tests have been conducted using conventional smartphones on AST SpaceMobile, the company has few satellites in orbit, and Kuiper is not yet operational.

Starlink is active and has shown interest in going directly to consumers without working through middlemen — something that clearly scares companies like Vodacom.