ISMAIL JOOSUB: Starlink, the law and future of our youth

The potential arrival of Starlink in SA has sparked a national debate that touches on law, policy, economic empowerment and the future of our youth. It is a debate we must engage with clarity and purpose.

As things stand, the Electronic Communications Act of 2005 requires that any telecom provider operating in SA must secure an individual licence, and in terms of section 9(2)(b) that licence can only be granted if a minimum of 30% of the ownership rests with historically disadvantaged groups. This rule, which was designed to promote transformation, is now being tested against the demands of innovation and global connectivity.

Starlink, the satellite internet arm of Elon Musk’s SpaceX, falls squarely within the regulatory net of the act. Unlike firms such as Google or Microsoft, which offer services over existing networks and are not classified as telecom operators under the law, Starlink provides direct-to-consumer connectivity through a constellation of low-Earth orbit satellites.

That means Starlink must obtain a network and service licence from the Independent Communications Authority of SA (Icasa) and comply with the ownership requirements in law. Its challenge, and the reason it has not yet launched in SA, lies in the structure of its business model: a wholly foreign-owned enterprise with a global policy against local equity divestment.

To navigate this impasse Starlink has proposed a solution rooted in an existing policy framework. The ICT sector broad-based BEE codes allow for an alternative to the 30% equity requirement: an equity equivalent investment programme (EEIP) that permits multinational companies to invest in projects of equal value to the equity they would have otherwise transferred.

This model has precedent. Microsoft, IBM and Amazon have all implemented EEIPs in SA, using local investments in enterprise development and skills training to comply with BEE obligations. But there is a legal snag. While the codes recognise EEIPs, the Electronic Communications Act itself does not. That is why communications minister Solly Malatsi recently issued a policy direction to harmonise the law with the ICT codes, giving Icasa the discretion to approve licences on the basis of EEIPs.

However, until the act is formally amended the 30% equity rule remains in force, and that raises constitutional questions. Section 9(2) of the constitution authorises corrective measures to promote equality, while section 22 protects the freedom to choose and practise a trade or profession. When applied rigidly, a law that was meant to enable inclusion may now be limiting access to vital infrastructure. SA must ask whether it is better served by sticking to form or adapting to achieve the substance of empowerment: that is, broader access to economic opportunity, education and connectivity.

Globally, SA is not alone in facing this dilemma. Malaysia, a country that has long enforced a 30% Bumiputera ownership requirement, recently waived that condition for Starlink, granting it a 100% foreign-owned licence in 2023. Brazil, another major developing economy, imposed no equity requirement and instead partnered with Starlink to connect more than 19,000 rural schools.

For its part, the EU avoids racial or ownership-based empowerment mandates altogether, preferring competition and universal service obligations. These examples demonstrate that transformation and technological progress are not mutually exclusive. They can coexist if policy frameworks are designed to accommodate both.

In SA, that means recognising the difference between ICT companies and telecom network operators. Google and Microsoft, which do not require licences under the act, have voluntarily participated in BEE through EEIPs. Starlink is required to comply with the law. What it seeks is not exemption but equivalence: the ability to meet empowerment obligations through targeted investment in infrastructure, youth education and enterprise support. That proposal deserves serious consideration.

A flexible, outcomes-based approach may be more in tune with the realities of today’s digital economy than rigid quotas that risk shutting out beneficial services. Critics argue that allowing EEIPs in place of equity ownership could undermine the spirit of BEE. That concern is not without merit, but the remedy lies in enforcement, not resistance to change. Any EEIP approved for Starlink must be subject to rigorous oversight, quantifiable targets and public reporting. Investments must be channelled into underserved areas and monitored for impact. If the value of the EEIP truly matches the equity requirement, the public interest will be served.

The urgency of this issue becomes clearer when we consider the broader implications for the country. SA has more than 20,000 state schools, many of which remain disconnected from the internet. Rural police stations and clinics often lack reliable communications. Small businesses in outlying areas struggle to compete in an increasingly digital marketplace. Starlink offers a technical solution to many of these challenges. With latency under 50 milliseconds and download speeds of more than 100Mbps, its satellites can deliver broadband where fibre cannot reach.

Case studies from around the world illustrate what is possible. In Canada’s Arctic region, Starlink has enabled real-time communications for remote police stations. In Rwanda, nearly 50 schools have been brought online. In Haiti, a remote village received internet access for the first time in 2023, transforming a school and clinic in the process. These are not isolated examples. In each case connectivity brought with it new opportunities for learning, safety and economic participation.

SA’s young people, in particular, stand to benefit. Coding academies, online universities and freelance work platforms all depend on reliable internet. For a teenager in rural Eastern Cape the difference between opportunity and exclusion may come down to a single Starlink dish. That is not hyperbole. It is the reality of a world in which digital literacy is the new passport to economic mobility. According to the World Bank, every 10% increase in broadband penetration is associated with a 1.2% rise in GDP. The maths speaks for itself.

This is not a call to abandon transformation. It is a call to realise it. A company such as Starlink, properly regulated and held accountable, can be part of the empowerment agenda. It can invest in township tech hubs, train young coders and connect schools that the market has left behind. But to do so the law must be clear, coherent and fit for purpose. That is the task before parliament and Icasa: to ensure our regulatory framework protects our sovereignty, promotes our values and prepares our country for the challenges of the digital age.

The debate around Starlink is more than a dispute over licensing. It is a test of whether SA can adapt its policies to unlock the future. If we want a generation that is not left behind, we must ensure they are connected, informed and ready. That means reforming laws when they no longer serve their purpose, holding companies to account when they enter our market, and never losing sight of why we have transformation laws in the first place: to build a country in which every South African has a fair shot at success.

That goal is not negotiable. But nor is progress. The path forward lies in making room for both.

• Joosub is constitutional advancement manager at the FW de Klerk Foundation.