On May 27th, 2022, Starlink, Elon Musk’s internet satellite company announced that they expect their service to go live in two African countries: Nigeria and Mozambique.
Starlink stated that they received regulatory approvals from both countries with Nigeria giving the company two licenses that take effect on May 1 and will expire in 2027 and 2032.
Currently, that would mean that Starlink is available to three African countries: Malawi, Mozambique and Nigeria with more African countries in the process of licensing the service.
With the promise of delivering speeds of up to 100+ Mbps, could Starlink be a disruptive competitor for local internet service providers in Africa?
How Starlink Works
Starlink wants to “connect the unconnected” with its satellite internet service by proving internet service in areas with unreliable connectivity.
By purchasing a Starlink satellite and setting it up in a favorable position devoid of trees and tall buildings, users can enjoy up to 100 mpbs of download speed.
There is not much overhead when it comes to getting the service. All you need is the Starlink satellite dish, a router and a power source and you’re good to go.
All in all, setup is pretty much simple.
But there is a giant hurdle that many prospective users will face: Pricing.
Price Will Be A Giant Hurdle
As much as Starlink is rated for its high speeds, the average African consumer might be priced out of getting themselves a kit to access the service.
Currently, consumers will have to pay $110 per month to access the Starlink internet service. But before, you will have to pay a one-time fee of $599 before you receive before receiving the Starlink satellite dish and router.
Currently, other internet service providers in Ghana can get prices ranging from 100 GHC – 500 GHC for 200 GB and above which well below the $110 per month that Starlink offers. Plus, African users get the option of “Pay As You Go” where they can buy a specific amount of data to use and re-up when it gets exhausted.
But could Starlink decide to change its pricing for the African region to get more customers onboard? That remains to be seen.
Could 5G Be A More Favorable Option?
Currently, some African countries have started adopting 5G tech. Countries including Botswana, Egypt, Gabon, Lesotho, South Africa, Uganda, Zimbabwe, Madagascar, Kenya, Ethiopia and Nigeria have all launched 5G commercially with Ghana planning its pilot in 2023.
5G technology can deliver to up to 20 Gigabits-per-second (Gbps) peak data rates and 100+ Megabits-per-second and may be more reliable than Starlink especially, for on the go.
Starlink fits in the scenario where telco networks might not be able to set up in rural areas but then again, affordability of the Starlink hardware and service would definitely be a hurdle for those same areas.
Starlink is planning on launching in other African countries including Egypt, Ivory Coast, Angola and Kenya in 2023.
It’s still early days and with the advent of 5G in many Africa countries, Starlink seems out of the picture. If the company ever decides to push and be aggressive with lower pricing, telcos might need to consider the threat of this new player.
Until then, pricing will stop many from even thinking about signing up for Starlink. But the threat still remains for telcos in the long term.