Starlink’s South Africa Ambitions Tested By B-BBEE Rules And Radio Licensing Requirements

The regulatory challenges facing Elon Musk's satellite service aren't unique. Major global technology companies have long navigated South Africa's Broad-Based Black Economic Empowerment (B-BBEE) framework when entering the market.

According to Paul Colmer, executive member at the Wireless Access Providers Association (Wapa), what makes Starlink different is its need for a radio license, which under Section 9(2)(b) of the Electronic Communications Act requires 30% equity ownership by historically disadvantaged South Africans. SpaceX's global policy prohibits local equity dilution, creating an impasse that's played out in government gazettes, ministerial directives, and parliamentary committee objections throughout 2025.

In December 2025, communications minister Solly Malatsi issued a policy directive instructing Icasa to align its regulations with the ICT Sector Code, which recognises Equity Equivalent Investment Programmes (EEIPs) as an alternative to direct ownership.

SpaceX has committed R2.5bn in local investment, including R500m to connect 5,000 schools with free internet and equipment. The ball now sits firmly in Icasa's court – and regulatory processes aren't resolved by ministerial finger-snapping, regardless of political pressure.

But here's what's puzzling: OneWeb's Leo services are already operational in South Africa through partnerships with Paratus, Q-Kon Africa, and others. Amazon's Project Kuiper is preparing to launch. Yet these services generate minimal public interest. The hype surrounding Starlink has overshadowed a more fundamental question: what is the actual addressable market, and who really needs this service?

The affordability question

Starlink promises affordable broadband connectivity anywhere at fibre-like speeds. But the word "affordable" requires context. Published pricing in neighbouring Eswatini and Lesotho shows a monthly subscription cost between R900 and R950, plus a R3,800 once-off equipment cost (for the Starlink Mini kit). These figures likely indicate what South Africans can expect.

Compare this to fibre-to-the-home (FTTH) services, which typically cost around R950 per month for uncapped 100Mbps connectivity. At its entry level, Starlink is therefore coming in at the higher end of the FTTH market, and pricing only goes up from there, making it comparatively less affordable.

According to Icasa's State of ICT Sector report, South Africa has 2.7 million fixed broadband subscriptions, with 2.47 million being FTTH connections. A household committing to R950 monthly sits firmly in LSM7-10 brackets – those with at least R20,000 monthly income. In the 2023 tax year, 1.3 million people earning over R500,000 annually contributed 75% of all personal income tax.

This suggests that between 1.3 and 2.5 million households can afford premium internet subscriptions – and most already have them, either through FTTH or fixed wireless services from local Wisps.

The data points to a sobering reality: the addressable market for Starlink broadband services in South Africa will be a fraction of middle-to-high income households. Some may switch providers, others may use it as a backup or for mobile connectivity during travel. But these represent incremental additions, not a transformative market opportunity.

South Africa has over 19 million households. In lower LSM bands, innovative companies are already building fibre networks in townships and low-income areas. Fibertime has connected over 250,000 homes with uncapped 100Mbps at R5-a-day, targeting two million homes by 2028. TooMuchWifi serves over 70 communities in the Western Cape, providing uncapped internet to over one million users, also at R5-a-day.

R5 daily equals R150 monthly – nowhere near Starlink territory at current pricing.

The real opportunity: remote infrastructure

Where Starlink's value proposition becomes compelling is in areas where traditional infrastructure remains economically unviable: game farms, forestry stations, remote rural communities, villages, and schools.

This is where local Wisps have a significant opportunity. Within its proposed equity equivalent obligations, Starlink has committed to providing free connectivity for 5,000 schools. But here's the crucial detail: Starlink isn't an infrastructure provider or a Wisp. It's a satellite service delivering connectivity to a location – not a complete solution.

This creates an ecosystem opportunity for local Wisps to build infrastructure around these remote Starlink deployments. It's not a box-drop solution; it's about creating local and wide area networks on farms and at remote schools, establishing proper network management, and providing ongoing technical services. The satellite terminal gets connectivity to the site – but someone needs to distribute that connectivity throughout the premises, maintain the equipment, troubleshoot issues, and integrate it with existing systems.

This is precisely why mobile provider solutions like fixed wireless and fibre haven't succeeded in these regions. They treat remote deployments as drop-box solutions, delivering connectivity to a point without concerning themselves with last-mile distribution to every classroom, every house on a farm, or every building in a village. Starlink will encounter the same limitations unless local connectivity providers are engaged to bridge the gap from the terminal to the actual devices people use.

For Wapa members and other Wisps, this represents a genuine business opportunity: not competing against Starlink, but complementing it by providing the infrastructure, management, and support services that transform satellite connectivity into usable internet access for end users.

Market context and competition

Starlink reportedly has over 7 million subscribers globally, making South Africa an attractive market even if only a fraction of households adopt the service. The demand was proven when over 12,000 "illegal" terminals were sold and activated in South Africa between 2023 and early 2024, demonstrating real appetite despite regulatory uncertainty.

Will Starlink serve a purpose? Absolutely. Significant gaps exist in internet coverage across South Africa, particularly outside fibered urban and suburban areas. Is the South African market critical to Starlink? Perhaps less than the hype suggests.

By the time political and regulatory processes conclude, other Leo providers – Amazon's Project Kuiper and China's Thousand Sails constellation – will be ready to compete. For Starlink, entering before these competitors gain traction matters strategically, but the market itself will be divided among multiple providers.

Once Leo broadband satellite services become fully operational in South Africa, they'll serve a significant portion of the population, though universal access remains unlikely.

Given current pricing structures, extending these benefits across all economic segments will require targeted strategies tailored to different income levels – and crucially, local infrastructure partners who can turn satellite connectivity into meaningful internet access for communities that need it most.