Editorial | 22 January 2025

Satellites offer unbridled internet access but existing operators are justified in seeking more spectrum.
The telecom industry is on the cusp of major transformation. The communications & digital technologies department will soon invite comments on proposed reforms that include updates on equity ownership requirements and the introduction of equity of equivalence programmes to attract international companies.
It has been a long time coming. For far too long, high data prices and limited access have stifled SA’s digital growth. Traditional telecom operators have enjoyed their monopolistic comforts, leaving many in rural and remote areas with subpar internet.
To be sure, the government itself cannot escape the blame for putting SA in the unadmired position of having some of the highest internet connectivity prices. It took the Independent Communications Authority of SA (Icasa), the regulatory body, about a decade to auction the radio frequency spectrum — the government-controlled airwaves that are licensed to mobile phone companies.
This regulatory inefficiency has enabled MTN and Vodacom to keep prices high to make up for the billions of rand in costs to repurpose the frequency bands used for voice to handle surging connectivity demand. Prices dropped shortly after the government allocated the spectrum, true, but there is scope for more cuts. Even after the government ended the “spectrum crunch” in 2022, some of it is still tangled up in the old analogue TV broadcasts due to the government’s tortoise-paced transition. This is crucial because these frequencies are perfect for covering vast distances, cutting down the need for a forest of towers to get the job done.
The promise of low-Earth orbit (LEO) satellites is a breath of fresh air, and the government’s promised reforms through increased competition could not come soon enough. Under the proposed reforms, the government plans to introduce equity ownership equivalence programmes — a clever workaround for multinationals wanting to tick the broad-based BEE box without parting with equity.
Instead of selling a chunk of their SA operations to black South Africans, they can contribute to economic empowerment in other ways, including skills development, promoting enterprise development and rural women and young people. These contributions can amount to as much as 25% of their local operations, or 4% of their SA revenue each year.
The potential benefits of LEO satellites are manifold. Imagine a world where connectivity is not just a luxury for the urban elite but a right for everyone, from the bustling streets of Johannesburg to the most remote corners of the Karoo. That is the kind of utopia LEO satellites can help us achieve. These satellites are more than a technological marvel; they are great equalisers, bringing high-speed internet to the masses, regardless of their geographical location.
Still, it is not unreasonable to surmise that mobile operators — MTN and Vodacom — are likely to feel aggrieved by the entry of LEOS. They could argue that the playing field isn’t level and that they are being disadvantaged by the regulatory delays in freeing up valuable spectrum that is stuck in limbo, still hindered by the interminable delay in migrating from analogue to digital television broadcasting. If and when LEOS swoop in with their advanced, space-based internet solutions, MTN and Vodacom might justifiably feel they are fighting with one hand tied behind their backs, unable to fully leverage their potential due to bureaucratic inertia.
The promise of integrating LEO satellites and the proposed reforms are important and long overdue. Still, the government must tackle regulatory delays and spectrum limitations for existing players, or risk it creating the very problem it seeks to solve.
‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’.