There are close to 50 million active internet users in South Africa, with almost 80% of people using mobile devices to access the internet.
It’s not the convenience of mobile connectivity that has made it the medium of choice for most South Africans, but rather the fact that there are far fewer fixed line options across the country.
As of January 2025, only 2.4 million households have access to fibre-to-the-home (FTTH) connectivity, serviced by eight major fibre network operators (FNOs).
Access to reliable, high-speed, high-volume connectivity has become essential for people from all walks of life, and yet South Africa’s regulatory environment and government policies have been hampering the growth of coverage across the country.
Fibre operators looking to expand have found it challenging to do so in the face of regulatory opposition, while alternatives like the satellite connectivity offered by the Starlink service have been banned.
Fortunately, we seem to be seeing a major shift among decision makers in government, with a growing number of voices calling for greater competition and more alternatives in the connectivity space.
Reaching for the stars
The SpaceX-run Starlink satellite connectivity service has been operating in countries like Nigeria, Ghana, and Botswana for years, delivering high-speed internet to underserved communities.
South Africa, however, has blocked the service because the Elon Musk-owned company does not meet the B-BBEE criterion that requires companies to be 30% black-owned.
Despite repeated requests for Starlink access in South Africa, regulators weren’t budging on this requirement until recently.
Following a meeting between President Cyril Ramaphosa and Elon Musk at the end of last year, South Africans may soon have access to Starlink – if an agreement can be reached that balances equity goals with securing investments from the South African-born billionaire.
A trade-off?
According to news reports, Musk suggested a trade-off in the meeting, proposing significant local investments, including the establishment of a Tesla battery production facility, in exchange for easing the B-BBEE ownership requirement.
SpaceX and the President’s office have not yet commented on this, but the potential for collaboration could unlock a wave of technological advancements and economic benefits across South Africa.
Not only would the benefits of connectivity that reaches even the most far-flung areas help grow the South African economy, having SpaceX and Tesla operations in the country would create much-needed jobs while advancing the country’s technological capabilities.
However, non-profit organisation Public Interest SA is urging the South African government not to bend its transformation policies to accommodate the launch Starlink in the country.
Tebogo Khaas, chairman of Public Interest SA, says that allowing Starlink – or any other corporation – to circumvent current policies would not only undermine the transformative goals of BBBEE, but also set a dangerous precedent for other sectors.
Integrate black ownership
“South Africa cannot afford to erode its regulatory frameworks to appease foreign investors, no matter how enticing their offerings. Instead of seeking exemptions, corporations like Starlink should explore creative ways to integrate black ownership into their business models. Doing so would not only align with South Africa’s laws, but also foster goodwill and trust among the local population,” Khaas said in a statement.
This statement shows a lack of understanding around the business repercussions of pursuing a B-BBEE policy that continues to hamper South Africa’s economy.
Allowing an exemption to the black ownership requirement is the only way to offer real economic benefits for the local population – especially if the company pursues further investments that will lead to job growth.
The politics of communication
The decision by Parks Tau, Minister of Trade, Industry and Competition, to file an appeal to the Competition Tribunal’s decision to prohibit Vodacom from acquiring a co-controlling stake in fibre operator Maziv, is another example of the shift we are seeing in South Africa’s communications environment.
The Competition Tribunal’s ruling – after deliberations that took three years – will block infrastructure development that would have amounted to a R30-billion investment from Vodacom. The deal had the support of communications regulator Icasa, the Department of Trade, Industry and Competition and even some of Vodacom’s rivals.
Tau’s appeal is a positive sign that government is starting to become aware of the need to expand South Africa’s communications landscape. Unfortunately, communications also seems to offer politicians an opportunity to further their own agendas.
The DA praised Tau’s decision to appeal, saying it is important that South Africa show the world that it is open for business.
Revisiting the Vodacom case
“This unprecedented move by the minister offers an important opportunity not only to revisit this specific case but also to promote meaningful reform of South Africa’s competition policy more broadly,” said Mlondi Mdluli, the DA’s spokesman on Trade, Industry and Competition, adding that there is an urgent need to rethink competition law and how competition policy can better serve South Africa’s developmental needs, particularly in fostering investment and expanding critical infrastructure like fibre broadband.
The EFF, however, has taken the exact opposite view. It slammed Tau’s decision, accusing him of conspiring to protect the interests of “white capitalist elites”.
“This interference is a clear attempt to protect the Rupert family, the interests of the white capitalist elites, and entrench the duopoly of Vodacom and MTN in South Africa’s telecommunications industry,” the EFF said in a statement.
This type of politicking is precisely why most South Africans remain reliant on a handful of mobile network providers for internet connectivity. While we allow political considerations to inform decisions that should be made based on economic considerations, we will continue hampering South Africa’s potential for growth.
Richard Firth is CEO of MIP Holdings.
