Elon Musk’s satellite internet company, Starlink, has been gaining traction on the African market, setting the stage for intensified competition with local service providers. Recently, Musk announced through his Twitter handle that Starlink has operationalized services in Kenya, making it the sixth African country to get Starlink services this year after Nigeria, Mozambique, Rwanda, Mauritius, and Sierra Leone. This development has sparked curiosity among African consumers about what Starlink has to offer compared to existing internet providers on the continent.
Kenya’s high-speed internet, that is 5G and 4G, is concentrated in major towns as opposed to the countryside. Therefore, offering higher speed, low latency and flexibility, and better coverage become the selling points for Starlink in Kenya and other African nations. This is because faster internet in Kenya has been the subject of debate as many parts of rural Kenya not being able to get faster internet.
But as Starlink gains momentum on the continent, other existing internet service providers (ISPs) are forced to up their game when it comes to offering faster internet. Factors such as coverage, speed, reliability, and pricing, will most probably determine the decision of all customers and businesses when choosing which service to use, whether they will stick with what they have been using or they will switch to Starlink the new entrant.
Better coverage but higher prices
Different service providers in Kenya are working around the clock to provide 5G internet and expand their market by reaching areas where there has been little to no internet connectivity. Starlink, therefore, walks into the Kenyan market with a promise to offer download speeds of up to 250 Mbps and upload speeds of up to 35 Mbps, which is faster than the speeds provided by the local internet service providers for both fixed and mobile connections.
According to Ookla’s Q3 of 2022 report on Internet Performance Report on the state of Kenya’s mobile and fixed networks, Safaricom had a download speed score of 22.19 Mbps, followed by Airtel 15.69 Mbps, Faiba 12.00 Mbps, and lastly Telkom 5.80 Mbps. For fixed broadband, the data reveals that Faiba had the highest Speed Score of 25.66 Mbps followed by Access Kenya 9.23 Mbps, and then Safaricom 8.19 Mbps
Despite its faster internet, Starlink’s prices are a disadvantage for ordinary Kenyan people. For home users, the terminal purchase cost for the kit which includes the Starlink dish, mounting stand, cables, and a power source is Ksh89, 000 ($628) along with a Ksh3, 100 ($21.88) shipping and installation fee, totaling KES 92, 100 ($650). Plus there is a monthly subscription charge that is set at Ksh6, 500 ($45.89). Business users will need to pay Ksh 349, 106 ($2,465) for hardware purchase, and a shipping charge of Ksh7,500, while their monthly subscription payment is fixed at Ksh13, 572 ($95.81).
Comparatively, ordinary fibre-powered broadband connections from local internet service providers like Safaricom, Faiba and Zuku cost a fraction of that amount. Customers usually only pay monthly subscription charges and receive other hardware components free of charge, such as routers, from their internet service providers. Local ISPs also offer a complimentary ethernet cable, whereas Starlink charges an additional fee for this.
For home users, Starlink has their monthly subscription payment fixed at Ksh 6, 500 ($45.89), while Kenya’s internet service market leader Safaricom has a silver bundle with speeds of 20 Mbps set at Ksh4,100 ($28.94) per month
Safaricom’s office-use packages include a gold service with 40 Mbps speed priced at Ksh6, 299 ($44.47) and a diamond package with 100 Mbps speed priced at Ksh12,499 ($88.24). On the other hand, Starlink’s business monthly subscription payment is fixed at Ksh 13, 572 ($95.81).
The prices have been a subject of debate with Kenyans taking to Twitter to express their thoughts on the topic.
Web developer and digital strategist Ole Pundit on Twitter says that the prices of Starlink are not friendly to potential customers, especially for people with internet in urban centres where the internet is quite accessible.
“I think Starlink unless they standardize those prices, then it’s just not feasible in Africa. Why should I pay Ksh 14,000 for Wi-Fi? I think the value proposition will be for peeps in remote locations.” He said in a tweet.
Starlink, therefore, makes sense for rural areas because many localities, besides major towns and urban centres, lack wireless or wired internet providers. This gives Starlink an edge, as it seeks to bridge the gap, tapping into areas that other service providers have not tapped into. Whether people in rural areas will be willing to pay that much for internet service is yet to be seen and can only be measured by how Starlink performs after its launch.
Competition among existing Internet providers
As stated earlier, Starlink has forced existing internet providers on the continent to up their game, despite its unattractive prices. In Kenya for instance, Safaricom is preparing to introduce satellite internet service in the local market through a collaboration with AST SpaceMobile, a Texas-based competitor of Starlink.
AST SpaceMobile has already established agreements with Vodafone Group Plc, which is the ultimate parent company of Safaricom.
“After successful completion of the trial, AST SpaceMobile will scale up their satellite deployments in partnership with Vodacom to provide ubiquitous communications to 4G devices across African and beyond,” Vodacom disclosed in its Integrated Report 2023.
“This capability will enable Vodacom to provide coverage in rural areas, where it is challenging to provide connectivity through traditional terrestrial communications solutions,” Vodacom said.
The introduction of satellite internet connections has the potential to disrupt traditional telecoms services that rely on infrastructure, a situation that often leaves many areas without coverage, particularly in rural regions of the country. The move could significantly improve internet accessibility in underserved areas. Interestingly, this initiative comes at a time when there is fierce competition in providing faster internet. This month alone, Airtel and Safaricom rolled out 5G internet services across Kenya.
Airtel currently holds the lead with 370 active 5G sites spread across 16 Kenyan counties and 180 wards nationwide. Safaricom being the latest to roll out 5G stepped up its game to compete with Airtel Kenya in the race for 5G dominance. According to Safaricom’s latest annual report, the telco plans to add 595 new 5G sites by the end of March next year, bringing the total count to 800.
By the end of March 2023, Safaricom had deployed 170 additional 5G sites, reaching a total of 205, compared to the 35 sites it had at the same time in 2022.
Despite Airtel’s higher number of sites, Safaricom’s 5G coverage extends to 23 counties, whereas Airtel’s spans 16 counties. With Safaricom’s aggressive expansion plans, the competition between the two telcos is intensifying in the race to provide superfast 5G speeds to their customers, and now Starlink is throwing its hat into the ring.
The competition that Starlink brings is forcing existing ISPs to expand their services while extending them to the rural areas that Starlink is targeting. In this regard, Starlink expansion will ultimately benefit African consumers.
