Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Elon Musk's Starlink service is growing across Africa, with more
Speaker 2: than two dozen countries connected to the satellite internet service.
Speaker 3: We look at LEO satellites and constellations as an integral
Speaker 3: part of the future. We're not fighting them, we're not resisting,
Speaker 3: We're actually embracing them, and we're thinking about the partnership
Speaker 3: models that makes more sense in specific markets.
Speaker 2: But ownership rules in South Africa have held Starlink back
Speaker 2: from the country and the firm has been lobbying hard
Speaker 2: to find a way in Africa's most industrialized economy.
Speaker 3: First of all, you should be questioning why is there
Speaker 3: why they're racist laws in South Africa. That's the first problem.
Speaker 2: That's what you should be attacking.
Speaker 1: Now.
Speaker 3: I'm in the subsid situation where I was born in
Speaker 3: South Africa but can get a license to operate in
Speaker 3: Starlink because I'm not black.
Speaker 2: Does that seem right to you? On today's podcast, we'll
Speaker 2: look at Starlink's progress across the continent and why their
Speaker 2: attempts to enter South Africa are proving to be quite controversial.
Speaker 2: I'm Jennifer's Abasaga and This is the Next Africa Podcast,
Speaker 2: bringing you one story each week from the continent, driving
Speaker 2: the future of global growth with the context only Bloomberg
Speaker 2: can provide. And joining me this week is Bloomberg's senior
Speaker 2: reporter Loney princelou and also our reporter Rivaldo Yankees. Thank
Speaker 2: you both for being with us this week. You both
Speaker 2: have done extensive reporting on this subject, so I'm really
Speaker 2: grateful that you both came on the podcast. Loney, let's
Speaker 2: just start with a look at Starlink and what it
Speaker 2: is exactly and what are the services that the company
Speaker 2: has been offering across the continent over the past few months.
Speaker 1: So as Starlin, as we know, is a low as
Speaker 1: orbit satellites sort of constellation, and at the moment, I
Speaker 1: have something like fourteen thousand satellites orbiting around the which
Speaker 1: makes it one of the easiest ways to connect, especially
Speaker 1: when it comes to rural areas and the cheapest ways.
Speaker 1: So many African countries have actually taken up the starting service.
Speaker 1: I think they are in twenty five African countries at
Speaker 1: the moment, including Nigeria and Kenya. Some of the holdups
Speaker 1: that we've seen in terms of African countries taking up.
Speaker 1: The service is of course licensing and many countries, not
Speaker 1: just in Africa but in other places requiring local ownership
Speaker 1: and starting as a rule do not actually see local ownership.
Speaker 1: So that's been one of the sort of sticking points
Speaker 1: in many of these markets.
Speaker 2: And of course there's been quite a bit of talk
Speaker 2: about the importance of getting the continent connected right. The
Speaker 2: mobile penetration is high, but we still need to get
Speaker 2: connectivity up. When we look at starlink and compare the
Speaker 2: services that it offers in terms of connection, is it
Speaker 2: offering a better proposition or countries compared to some of
Speaker 2: the other players in the industry.
Speaker 1: So you made an important point. There is coverage often,
Speaker 1: but the actual connections to homes in rural areas are
Speaker 1: quite low. Even in a country like South Africa, where
Speaker 1: the connectivity is high across the board more than eighty percent,
Speaker 1: when it comes to connecting rural houses, that's lower than
Speaker 1: one point seven percent in rural South Africa, So you
Speaker 1: can see there's quite a big discrepancy. And the easiest
Speaker 1: and the cheapest way to connect those houses is through
Speaker 1: satellite technology. And what Mask has done very well is
Speaker 1: the way he's packaged his technology, it's very mobile, it's
Speaker 1: very easy to use, it's small kits, so that then
Speaker 1: becomes a very user friendly option for these areas. It's
Speaker 1: also often it's much cheaper than trying to connect through
Speaker 1: a fiber connection when it comes to telecoms providers like
Speaker 1: a Voticon or mpty in so it does, in many
Speaker 1: instances provide a better way to connect things like emergency
Speaker 1: services and rural areas.
Speaker 2: How much cheaper approximately are we talking, Lenie?
Speaker 1: So it really depends from country to country and what
Speaker 1: your options are, and it's often it's not that it's
Speaker 1: that much cheaper, but it is that it's more convenient
Speaker 1: and that it's the actual only connection that can get
Speaker 1: to that certain spot. So I think in places like
Speaker 1: Zimbabwe it did turn out to be a lot cheaper,
Speaker 1: about fifty percent cheaper. I think the important part is
Speaker 1: that it's often the most usable option when it comes
Speaker 1: to certain areas. Well.
Speaker 2: Let'stick into one of those countries that doesn't currently have
Speaker 2: starlink operating, and that is of course South Africa. As
Speaker 2: was mentioned Reval though, let's bring you in here. But
Speaker 2: because you've been doing some reporting on this, what is
Speaker 2: the opposition, right now to Starlink opening up here in
Speaker 2: the country.
Speaker 4: So the big issue here is regulation South Africa is
Speaker 4: what's called Blaque empalment loose, which basically required telecom companies
Speaker 4: to have at least thirty percent black local ownership. The
Speaker 4: idea is to fix the economic inequalities created during a party.
Speaker 4: Now for Elin Musks basics installing, that's a problem because
Speaker 4: they don't want to give up ownership to enter the market.
Speaker 4: That's really the main barrier right now.
Speaker 2: And of course it's hard to separate Elon Musk from
Speaker 2: the debate. He was born in South Africa but left
Speaker 2: for North America when he was seventeen. Recently he's spread
Speaker 2: a conspiracy theory about a quote genocide against white people
Speaker 2: in the country, and US President Donald Trump has promoted
Speaker 2: the message Rivaldoloni stick with me. When we come back,
Speaker 2: we'll talk more about Starling's plans for South Africa and
Speaker 2: why they're lobbying in the country. Is proving to be
Speaker 2: quite controversial. We'll be right back. Welcome back. Today we
Speaker 2: are looking at Starlink's growth in Africa and why South
Speaker 2: Africa is proving to be a sticking point for the company.
Speaker 2: Loney princelu and Rivaldo Yankeys are both with me still. Rivaldo,
Speaker 2: before the break, we were just talking about some of
Speaker 2: the sticking points for Starlink and Elon Musk around ownership.
Speaker 2: What has the government had to say about this? Because
Speaker 2: Black empowerment laws, as you were just mentioning, they were
Speaker 2: introduced after the end of apartheid and compelled companies and industries,
Speaker 2: including banking, mining and telecommunications to sell stakes to black
Speaker 2: people who were systemically excluded from the economy during white
Speaker 2: minority rule. I imagine the government has had quite a
Speaker 2: lot of commentary around this in particular.
Speaker 4: So this is where things get messy. There's basically a
Speaker 4: political split inside government. I mean sooth Africa. We have
Speaker 4: a government of national Unity. So Minister Soli Malachi of
Speaker 4: the DA as a change the changing these rules so
Speaker 4: companies like Stalling can invest in things like infrastructure or
Speaker 4: communities instead of giving up ownership, which is basically the equity,
Speaker 4: equivalent and alternative to be laws. But the government isn't
Speaker 4: united on this. Members of the AGENC, like Deputy Minister
Speaker 4: only Kungo Beele, they're pushing back. I'm saying that you
Speaker 4: can't just change the law like that. So it's basically
Speaker 4: a split inside or government of National Unity.
Speaker 2: What about Starlink itself, I imagine you spoke to them for
Speaker 2: your own reporting.
Speaker 4: So Stalling hasn't officially commented in interviews, but earlier this
Speaker 4: year they published the blog post responding to the debate.
Speaker 4: So the blog post is basically debunking myths and facts
Speaker 4: about potentially operating in South Africa. So they pushed back
Speaker 4: on some of the criticism and so that they committed
Speaker 4: to South Africa. They're also promised to invest about five
Speaker 4: hundred million rare into things like connecting the rural schools,
Speaker 4: what I speed internet. So the message is from Stalling,
Speaker 4: we can still contribute to the country, just not through local.
Speaker 2: Ownership, Lennie. Clearly, as Rivaldo was just pointing out there,
Speaker 2: this has attracted quite a lot of attention within the government,
Speaker 2: even within I think that the tech industry, which you
Speaker 2: cover quite extensively, and even citizens. Right, when you talk
Speaker 2: about connectivity in South Africa, how important would Starlink operating
Speaker 2: here be for the company. Let's just start with that.
Speaker 1: South Africa is of course the biggest economy in Africa,
Speaker 1: in the biggest chem of things. I can't think that
Speaker 1: it would really hit stalling margins, if I can put
Speaker 1: it that way. So it seems emotive. It seems like
Speaker 1: it's very important for him to operate here. And while
Speaker 1: it is the biggest economy in Africa and it must
Speaker 1: be important to operate here, he has many other countries
Speaker 1: around the world to operate and so yeah, one has
Speaker 1: to ask what is motivating him so strongly to comment
Speaker 1: almost weekly on the situation in the country and on
Speaker 1: the sort of black empowerment laws and things like that.
Speaker 2: Exactly. That's sort of what it's seeming like and lonely.
Speaker 2: Maybe just before we wrap up, you mentioned Starlink is
Speaker 2: expanding globally, even on the continent. What are you watching
Speaker 2: for next when it comes to some of these expansion
Speaker 2: plans for Starlink.
Speaker 1: I'll speak specifically on Africa. They've recently opened in Central
Speaker 1: Republic of Africa, so that wasn't much I think, and
Speaker 1: then they've tried to open in Namibia, which they sort
Speaker 1: of we're blocked by the same thing, local ownership. Namibia
Speaker 1: is asking fifty one percent local ownership and so there
Speaker 1: was sent away. They're going to appeal that decision. As
Speaker 1: I understand, but for them, really they're in twenty five
Speaker 1: Africa countries, they want to be in all fifty four.
Speaker 1: This is the sort of messaging we've been getting all
Speaker 1: along for Starling is really also a numbers game, so
Speaker 1: you really want to launch in every country where where
Speaker 1: you can. There's different concerns around US, not only local
Speaker 1: ownership laws, there's also things around security, like information security
Speaker 1: that people are thinking about with a US company operating here,
Speaker 1: what information can they actually access, what information can they use? So,
Speaker 1: as you can understand, the debate is huge, and as
Speaker 1: technology evolves quite fast and different players want to enter,
Speaker 1: this just becomes more and more of a conundrum when
Speaker 1: it comes to regulations and what to allow and not
Speaker 1: to allow in your country, especially if it is that's
Speaker 1: important to have people connected because as you get connected,
Speaker 1: you're also able to access the international economy much easier.
Speaker 1: There's different debates around US.
Speaker 2: Do you think it potentially poses a risk for some
Speaker 2: of the telecom providers already on the continent.
Speaker 1: So the big guys on the continent is empty En, Etail, Vitacom.
Speaker 1: All of these have individually actually partnered with Starling in
Speaker 1: some sort of way where they Startink does owned licenses,
Speaker 1: they sell the hardware of styling, for instance, in their shops.
Speaker 1: It's a combination where the providers will want to work
Speaker 1: with styling Starlink. Of course in many instances want to
Speaker 1: go at it by itself, so it does pose a risk,
Speaker 1: but I think it's sort of there's a lot of
Speaker 1: space for the continent to get connected in different ways.
Speaker 1: So it's a five G or a four G, or
Speaker 1: it's fiber and then satellite. You have to work in
Speaker 1: satellite into the equation. So I think there's room for
Speaker 1: all of these players if you want to connect a
Speaker 1: very big continent as Voss and messes for everyone, I would.
Speaker 2: Say Bloni and Rivaldo thank you again so much for
Speaker 2: joining us this week, and be sure to read Rivaldo's
Speaker 2: report on Bloomberg platforms right now. Will put a link
Speaker 2: to that in the show notes. Here's some of the
Speaker 2: other stories we've been following across the region this week.
Speaker 2: Madagascar's anti corruption authorities are probing major irregularities in the
Speaker 2: management of public resources estimated at three thousand, eight hundred
Speaker 2: and eleven billion ariari about nine hundred and nineteen million dollars.
Speaker 2: That's according to the presidency and Zimbabwe's dollar denominated stock
Speaker 2: exchange has eclipsed the country's one hundred and thirty two
Speaker 2: year old main course, propelled by the biggest listing in
Speaker 2: the nation's history. You can follow these stories across Bloomberg,
Speaker 2: including the Next African Newsletter. We'll put a link to
Speaker 2: that in the show notes. This program was produced by
Speaker 2: Adrian Bradley and tiwa Adebayo. Don't forget to follow and
Speaker 2: review the show wherever you usually get your podcasts. I'm
Speaker 2: Jennifer's Abisanja. Thanks as always for listening.