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The South African satellite broadband industry is evolving and growing with new services from Eutelsat-OneWeb, Starlink, Amazon LEO and SpaceSail already available or expected to come onstream in the near future. These broadband satellite services – provided by US, European and Chinese constellation operators – are being delivered within the context of the highly regulated South African telecoms ecosystem and against the backdrop of a shifting global geopolitical landscape.
We consider how the future of the South African broadband satellite industry could unfold, and the likely influence of satellite supply models, service prices and regulation.
Introduction
The South African and wider African telecommunication industries are highly regulated – and with good reason. It was this regulatory framework that underpinned the success of investments in mobile networks and ultimately, the incredible growth of mobile services across Africa. Yes, any regulatory framework should be dynamic and able to adapt to changing circumstances in order to achieve a balance between incorporating emerging technologies and protecting national interests. However, there is also strength to be found in a certain degree of rigidity.
What makes broadband satellite a more challenging case is the fact that satellite networks are built in the sky, thereby placing the network equipment literally beyond the scope of national regulations. Since there is no technical need to build any infrastructure within the end user’s home country, it is quite possible for services to be provided to anyone, anywhere who purchases a user terminal and connects to the satellite network.
This is of course the root cause of the debate around Starlink satellite services and their availability to end users in South Africa – even though the service had not been approved within the existing regulatory structure. Equally, the regulations also stipulate that any telecommunications service must be delivered only by a licensed service provider and for this reason, Starlink and any other global operators are currently required to comply with the regulations put in place by the South African authorities.
This short introduction has been included in order to provide context for our review of the following different market scenarios based on models for market demand, regulatory compliance, government policy and local infrastructure requirements.
Current Status
As a starting point for discussing future scenarios, the current situation is summarised in the latest ICASA ICT report (2024). This gives a current total of 13,667 satellite broadband subscriptions in SA, or less than 2% of the current total of 903,784 wireless broadband subscriptions. Adoption of terrestrial fixed wireless broadband surged during 2024, and accounted for the majority of the growth in this sector.
The total fixed broadband market grew significantly in 2024 to 2.7 million subscriptions, primarily due to the rapid expansion of fibre-to-the-home/building (FTTH/B) Internet subscriptions, which grew from 1.4 million in 2023 to 2.4 million in 2024. These numbers provide a point of reference for the potential scale of market demand from currently unserved end users.
Steady-Growth Scenario
What happens
LEO satellite technology is market-ready, and service delivery is able to meet market demand and price points. Also, ICASA maintains the current regulatory framework that supports local industry development whilst protecting the long-term interests of the market with a strong focus on servicing multiple end user price points. Global satellite operators accept this structure and adopt a wholesale distribution model for service delivery to the market through partnerships with local service providers.
Structure
Established ISP’s and service providers are an effective and immediate channel to market that will also create competition on different levels leading to service delivery at all price points.
Outcome
The growth of broadband LEO satellite sector will be steady and will achieve a comparable market growth to the current wireless fixed broadband industry, with a CAGR of 38%. An expected initial burst in uptake over the first two years of 30,000 new subscribers will lead to a base of 150,000 subscribers over 5 years. Thereafter, the market will continue to grow to reach one million subscribers.
Burst-Limited Scenario
What happens
Telecommunications regulations are revised to allow global satellite providers to directly service the South African market. The broadband satellite service stack (including user terminals and delivery processes) are market-ready, and service delivery can meet market demand.
Structure
Global operators will then be allowed to service the broadband market directly and it is expected that they will do so using online ecommerce platforms for service ordering, customer engagement with credit card payment platforms, courier deliveries of equipment and a reliance on end user self-installed services.
Outcome
A burst of end user growth is expected, driven by higher income end users with credit card payment facilities. Service delivery to enterprises and retailers with a requirement for end-to-end network services (including fibre primary links) will be slower and uptake in lower income market sectors will be minimal. The initial two-year uptake will be a burst to perhaps 100,000 terminals, whereafter delivery will slow and be limited to 250,000 high-income end users and retail and enterprise use cases where no viable alternatives are available.
Delayed-Growth Scenario
What happens
This is similar to the “Steady-Growth” scenario outline above, whereby ICASA maintains the current regulations and global satellite operators accept this structure to deliver service in partnership with local service providers. However, in this case end-to-end LEO satellite services and technology are not yet fully market-ready, with various limitations in available satellite capacity, user terminal functionality and shortcomings in full-service delivery, possibly also linked to expensive pricing.
Structure
In this scenario, local service providers will be absolutely critical to managing expectations and delivery to market, as well as in leading engagement with global network operators to push for technology maturity and adaptation of global network planning models to on-the-ground realities.
Outcome
The growth of broadband satellite LEO will then be delayed, and service roll-out will be constrained by the initial slow delivery and fulfilment. The initial two-year roll-out phase will reach around 15,000 subscribers and the expected five-year growth would reach a total of 100,000 subscribers, with overall market potential remaining at one million.
Table 1: Broadband LEO satellite services deployment scenarios for the South African market.
Conclusions
It is not a matter of if broadband LEO satellite services will be available to service the South African market, but rather a question of when and how. While there are multiple variables, we have considered the possible scenarios based on the most likely market dynamics, local telecommunication regulation frameworks, and service readiness and pricing.
Looking at the current VSAT market and expected growth rates, these models show that the best long-term outcome for South Africa is the “Steady-Growth” scenario based on a wholesale model. This combination would provide a best-of-both-worlds outcome where the service is based on the technological strength of the global constellations, augmented by local delivery and market expertise provided by local operators such as Q-KON with their Twoobii Smart Satellite Services. This scenario is also likely to obtain the greatest number of subscribers because it services the full spectrum of end users, as well as providing an integrated delivery model for retail and enterprise use cases
