SpaceX, the owner of Starlink, has told Icasa that South Africa's licensing rules are holding back competition, in an inquiry into whether the regulator should start issuing new national network and service licences. The inquiry follows a policy directive from communications minister Solly Malatsi.

Wholesale provider Easttel, an existing licence holder, told Icasa that buying an existing pair of network and service licences from another company now costs more than R1 million, before Icasa's R84,738 fee to apply for the transfer.

To build a network or sell telecoms services nationally, a company needs individual licences from Icasa, known as I-ECNS for networks and I-ECS for services. Submissions to the inquiry say that because new licences are not readily available, companies that need one buy an existing licence from a current holder instead, which has created a secondary market with high prices.

Icasa is asking whether it should move to a system where anyone needing a licence could apply at any time. SpaceX told the regulator it could afford to pay an existing holder R1 million, but its transfer would still fail, because it is not 30% owned by historically disadvantaged groups, as the rules require. That ownership rule has kept Starlink out of South Africa for years.

Malatsi has issued a policy direction asking Icasa to accept equity-equivalent investment programmes, in which a foreign company invests in local development instead of selling shares, as an alternative. Icasa has said it cannot fully apply that without an amendment to the Electronic Communications Act, and SpaceX has not yet lodged a formal licence application. Icasa published its discussion document on 30 October and gave the industry 45 working days to comment, which takes the deadline into early January 2027.

MyBroadband reported the submissions from SpaceX, Easttel and others. TechCentral reported in August that Icasa could not give full effect to Malatsi's direction on equity equivalents without changing the law, and that the Electronic Communications Amendment Bill, as introduced, says nothing about ownership. We covered the earlier round when SpaceX appeared at Icasa's hearings.

The R1-million figure is not a fee anyone set. It is what scarcity costs. When a regulator stops handing out new licences, the existing ones become valuable assets that their owners can sell, and every new competitor pays a premium just to get in the door.

That affects far more than Starlink. Smaller internet providers, wholesale operators and startups that want to build networks all face the same hurdle, and the cost ends up in what customers pay. Opening licences to anyone who qualifies would lower that barrier for everyone.

The ownership question is separate and still contested. Supporters of the 30% rule see it as essential for transformation, while SpaceX and others argue that equity equivalents could achieve the same goals while letting foreign operators in. That debate now sits with Parliament, not Icasa.

There is also a fair question about who controls critical networks, raised by Starlink's restrictions in Ukraine. Businesses and providers that want a say on how licences work should comment before the January deadline.

You might also like our piece on Musk's SpaceX share pledge, the Réunion subsea cable, and Revolut's SA licence bid.

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