Latest news with #B-BBEEAct
Daily Maverick
24-06-2025
- Business
- Daily Maverick
Starlink promises internet for rural SA schools — if BEE rules bend
The satellite operator has dangled a deal: free high-speed connections for 5,000 isolated schools in South Africa. In a letter to Trade, Industry and Competition Minister Parks Tau, Starlink's senior director of market access, Ryan Goodnight, made a simple case: let us in under the Equity Equivalent Investment Programmes (EEIPs) instead of the traditional 30% local ownership requirement, and we'll transform rural education connectivity. 'Today, millions of children are being denied access to education resources because South African broadband networks do not extend to the most rural parts of the country,' Goodnight wrote. The deal? Fully funded Starlink kits and service for more than 5,000 rural schools, complete with installation and maintenance support through local South African companies. But the Starlink letter also reveals the company's growing impatience. Despite being 'interested in providing high-speed internet to South Africa since we first deployed our constellation', efforts remain grounded by what it calls outdated ownership regulations – a requirement that Starlink says it cannot meet while maintaining operational control across its global network. But you know this already. Opening Malatsi's box At the centre of the situation sits Minister of Communications and Digital Technologies Solly Malatsi, who has tried to thread the needle between transformation imperatives and technological pragmatism. During a parliamentary portfolio committee meeting on 27 May, Malatsi defended his policy directive allowing the Independent Communications Authority of South Africa (Icasa) to recognise EEIPs, arguing that the work 'predates the events of last week [President Cyril Ramaphosa's fateful visit to Washington]' and represents continuity rather than capitulation. 'The intention is to ensure a whole and consistent application of the B-BBEE Act and the ICT sector codes,' Malatsi told the committee, explaining that the directive aims to bring telecommunications regulation in line with what already exists in other sectors. Microsoft, IBM and Amazon already use EEIPs successfully in South Africa – why not satellite internet providers too? Malatsi's reasoning rests on section 3 of the Electronic Communications Act, which allows ministerial policy directives consistent with national policies. He argues that Icasa's regulations have created a gap, failing to wholly consider the ICT sector code's provisions for alternative pathways to transformation compliance. Defending the empowerment dream But if Malatsi thought his careful legal reasoning would satisfy critics, he was mistaken. The portfolio committee meeting descended into accusations of undermining South Africa's transformation agenda. Committee member Oscar Mathafa argued that the directives 'dilute or undermine those particular hopes' of voters for social justice and equity, and Colleen Makhubele described the approach as 'a denial of a constitutional right of a historically disadvantaged group to own the economy'. Committee members also accused Malatsi of 'trying to amend legislation using a ministerial policy directive'. Perhaps most damaging was an observation that 'we are altering our legislation for Starlink whereas where it goes to operate in other countries it did not utilise this coercion'. An industry body, the Association of Communications and Technology, has tried to stake out middle ground, supporting the minister's effort to resolve regulatory ambiguity while insisting on 'regulatory parity' for all players. Its chief executive, Nomvuyiso Batyi, who was critical of Malatsi in her last conversation with Daily Maverick, sent a careful statement: 'We've supported the roll-out of satellite technology in South Africa, within the same rules that everyone else follows.' The association's support for EEIPs comes with a crucial caveat – implementation must be 'transparent, consistent, and with an equal application of the law'. Network operator ground offensive Faced with potential satellite competition, South Africa's network operators have been aggressive in demonstrating their commitment to reducing data costs and expanding connectivity. The numbers they presented to Parliament are impressive. MTN claims a 46% price reduction on 1GB bundles since 2019, whereas Vodacom reports that effective rates have decreased by 50% over two years. Telkom says that per-gigabyte costs have dropped from about R99 in 2010 to R79 today, and Cell C has reduced data rates by more than 28% since 2023. These operators are also making substantial infrastructure investments, spending more than R143-billion in the past five years alone – which means jobs, not just internet from the sky. MTN invests about R9-billion a year in capital expenditure, achieving 99% 2G coverage, 98.9% 3G coverage and 97.8% LTE coverage. Its 5G now covers nearly 45% of the population. Vodacom has pledged R60-billion over the next five years for network development, expanding 5G population coverage from 20.6% in 2022 to 51.7%. Telkom says its mobile network covers 85% of the population directly, extending to 99% through roaming agreements. Rural connectivity A focus on rural connectivity is particularly relevant in view of Starlink's school promise. Vodacom's rural coverage has risen from 89.63% in 2023 to 95.4%, with a target of 97%. Rain, despite being the smallest operator, covers 61 million people with 4G and 21 million (35% of the population) with 5G. Universal service obligation (USO) achievements also provide context. MTN claims a 100% USO scorecard achievement, having invested R380-million over the past decade. It has connected 1,360 mainstream schools and 140 special needs schools, also providing laptops, printers and projectors. Vodacom has connected 3,000 schools, 1,500 beyond its obligations, and 934 of the 4,000 institutions required by new spectrum-allocation obligations. Telkom works with the government on SA Connect to connect 40,000 government institutions, and Rain has connected 2,166 public service institutions. But there are problems that satellite providers like Starlink would largely avoid. MTN spent more than R4-billion in 18 months to secure its network against load shedding. Telkom reported more than 2,000 vandalised sites costing more than R300-million to repair. Starlink's infrastructure in space is immune to load shedding and vandalism, potentially offering more reliable service to rural areas. But this advantage comes at a cost – about R900 a month, based on pricing in Botswana, plus equipment costs of R3,200 to R6,700. Operators want regulatory reform, fast-tracked spectrum access and infrastructure sharing. And they want OTT players (read: WhatsApp and Netflix) to finally pay up for riding their pipes. For now, Starlink remains in orbit. Whether it lands with a bang or a crash depends less on tech and more on who controls the regulatory runway. And if you're in rural Limpopo waiting for decent download speeds, you probably don't care if it's a billionaire's satellite or a homegrown telco – you just want it to work. DM
The Citizen
04-06-2025
- Business
- The Citizen
Cosatu says debate on B-BBEE is needed for beneciaries' benefit
Cosatu calls for reform of B-BBEE to ensure real empowerment for workers and disadvantaged communities, not just political elites and business insiders. The debate about the broad-based black economic empowerment (B-BBEE) is needed on how to ensure it benefits the beneficiaries. This is according to union federation Cosatu spokesperson Matthew Parks, who was reacting to the ongoing debate on whether the B-BBEE policy is aimed at being biased against whites. Inequality persists 'While we support the B-BBEE Act, we believe a debate is needed on how to make sure it reaches its intended beneficiaries, in particular historically disadvantaged individuals and communities,' he said. 'We support the objectives of B-BBEE. These are necessary given three and a half centuries of systematic discrimination and disempowerment under colonial and apartheid rule. South Africa is 31 years into democracy but remains the world's most unequal society.' Parks said the policy was a necessity to help historically disadvantaged persons and communities to enter the economy, not only as wage earners but also as owners of businesses. He said Cosatu cannot remain satisfied with progress when the colour of one's skin still largely determines one's economic status. ALSO READ: Minister extends date for comments on R100 billion transformation fund 'Ticking time bomb' He added the majority of shares on the Johannesburg Stock Exchange are owned by whites, similarly with regards to ownership patterns of businesses. 'This is a ticking time bomb that we must address. It's not racism against whites and, in fact, white women and white South Africans with disabilities are included. White South Africans and investors are not excluded,' he said. 'All the policy seeks to do is to boost the economic empowerment of those still disadvantaged. It has helped to begin the journey of building a nonracial society. While some progress has been made in building a black middle class and black industrialists, it is not enough given the inequalities still so prevalent.' Parks said more must be done to ensure 'it benefits workers and not just the elite and worker ownership and employee shareholder ownership programmes should be ramped up'. He added more must be done to ensure investors honour their B-BBEE shareholders and equity equivalents. Equity equivalents offer alternative for foreign investors When asked if Cosatu supports the equity equivalents, Parks agreed and said that has been one of two options under the B-BBEE Act for many years. He said they provide a useful option for international investors who are not able to do the B-BBEE shareholders' option. ALSO READ: DA transformation policies stance dents its image and may lose it votes, says expert 'Equity equivalent option allows investors to support local manufacturers, create jobs, skill workers or invest in local communities,' he said. 'These have benefited many local businesses, workers and communities. They have been successful in many sectors, including clothing and motor manufacturing. Many companies have utilised this option before.' Malatsi's draft policy Communications and Digital Technologies Minister Solly Malatsi was recently criticised for unveiling a draft policy direction in the Government Gazette 'proposing an alternative to the B-BBEE ownership requirements for the ICT [Information and Communication Technology] sector'. 'The new model would allow companies to meet empowerment obligations through equity equivalent programmes rather than direct ownership transfers,' one critic said. The proposed amendment to the Act could facilitate the entry of investors such as Elon Musk's Starlink into South Africa's telecommunications market and contribute to the empowerment of the previously disadvantaged people without having done a direct transfer of ownership. Malatsi's critics said he was trying to pave a way for Starlink to do business in SA. Musk has previously criticised the B-BBEE policy, saying it was racist. NOW READ: Proposed Starlink deal 'wrong in principle and practice'
IOL News
26-05-2025
- Business
- IOL News
The impact of Starlink on South African digital inclusion
Elon Musk's Starlink: A New Era for South Africa's Telecommunications? Image: Leon Nicholas/Independent Newspapers The anticipated potential entry of Elon Musk's Starlink into the South African telecommunications market has ignited a flurry of strategic considerations among industry players, regulators, and policymakers. Vodacom, the giant South African network operator, has waded into the debate saying satellite technology should be seen a complementary force in expanding digital inclusion rather than a direct threat to its core operations. This comes amid recent government developments, including the gazetting of a new B-BBEE policy that could potentially facilitate the entry of companies like Starlink, shortly after a high-profile meeting between President Cyril Ramaphosa and US President Donald Trump, whose campaign was partly funded by Musk. Responding to IOL, a Vodacom spokesperson clarified the company's position on satellite internet providers like Starlink. 'We recognise satellite networks as a valuable addition to our existing infrastructure. They are instrumental in bridging the connectivity gap, particularly in remote and hard-to-reach areas where terrestrial networks face limitations. 'We focus on investing in and expanding our 4G and 5G networks to serve urban and semi-urban communities.' The company said its strategy aligns with a broader industry trend of viewing satellite networks as enablers of digital inclusion rather than outright competitors. The Vodacom media team added that the telecom giant has partnered with global satellite providers such as AST and Amazon's Project Kuiper to extend its network reach across Africa and Europe. 'These collaborations leverage low Earth orbit (LEO) satellite technology to enhance coverage and resilience, especially in underserved regions.' Starlink's potential entry into South Africa raises significant questions about the country's regulatory landscape and market dynamics. ICASA, the national telecommunications regulator, has been examining a proposed satellite framework. Industry stakeholders have urged a balanced approach that promotes innovation while ensuring fair competition. Vodacom has welcomed ICASA's consultation process, advocating for a licensing framework that aligns with existing laws and maintains a level playing field. Mofihli Ramari, spokesperson for the B-BBEE Commission, emphasised that the ICT Sector Charter Council and ICASA oversee the B-BBEE Act and related sector codes. 'Any potential changes to B-BBEE legislation or the entry of new players like Starlink should be carefully examined within the current regulatory and transformation framework,' Ramari stated. 'The focus remains on ensuring that transformation goals - such as black ownership and enterprise development - are upheld, regardless of the nature of technological advances or new entrants.' Regarding employment, Vodacom reassured that technological innovation will not threaten existing jobs. 'Satellite networks serve specific use cases and do not replace the cost-effective, high-capacity terrestrial infrastructure that supports urban centers,' the company noted. "Vodacom's long-term vision emphasises investment in local workforce development, skills training, and support for black-owned enterprises through the ICT Sector Code. Amid fears of disruption, Vodacom said reiterated that it remained optimistic about satellite technology's transformative potential, as CEO Shameel Joosub highlighted at the 2024 UN General Assembly. 'Harnessing satellite and mobile technology together can finally close the digital divide—reaching rural communities, farmers, students, and underserved populations. We aim to ensure no one is left behind in South Africa's digital journey.'
