Elon Musk’s Space Exploration Technologies Corp. (SpaceX) has launched more than 1,000 satellites for its Starlink internet service and at the beginning of last year was signing up early customers in several countries including the U.S., U.K., and Canada. A year down the road– in July and September this year, Starlink wants to go live in two African countries: Nigeria, and Mozambique.
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AIn 2021, SpaceX has told investors that Starlink is angling for a piece of a $1 trillion market made up of in-flight internet, maritime services, demand in highly populated countries, and remote rural customers. This is a good solution for most African countries. Starlink is ideally suited for areas where there is poor or no internet connectivity. Where digital banks want to “bank the unbanked,” Starlink wants to “connect the unconnected.”
Expected to start on May 1, the government of Nigeria gave Starlink two 5 and 10-year licenses, which means they will expire in 2027 and 2032. The service is registered as an entity in the Victoria Island area of Lagos state.
In areas where current Internet Service Provider’s (ISP) internet is slow due to the high cost of extending 3G and 4G coverage to rural communities for access to high-speed internet. Most telcos are concerned about recovering investments from low-income, low-frequency users, worried about the cost of operations and maintenance, and fear the cost of repairs after vandalism or theft. This will not be an issue for Starlink as users everywhere will share the same satellite infrastructure in space.
Starlink connection costs, coverage, and speeds
After securing the approvals, Starlink is asking consumers to order installation kits by making a $99 deposit. This price could not be affordable for most rural dwellers in Africa. With the recent closure of Google’s Project Loon, which some users had hoped would kick off, it is clear that other options are welcome on the African continent.
This is not a cheap solution at least for now. According to Starlink testers who have used the service since November 2020 said the initial cost of equipment is about UGX 1.9 million ($500), which includes a flat dish and antenna (see featured image). Beta testers were also paying about UGX 376 k ($99) a month for speeds of up to 100 megabytes per second for downloads and 15 to 20 for uploads — far faster, than any 4G network we have tested.
After a price review in March, it now costs a one-time fee of UGX 2.3m ($599) for the dish and router and UGX 418 ($110) for a monthly subscription. A premium product tier costs UGX 9.5 m( $2,500) for installation and UGX 1.8m ($500) in monthly fees.
The Starlink solution was supposed to be a huge disruption in the telecoms space in Africa given the massive coverage that satellite technology offers. There are now roughly 2,500 functioning satellites in orbit, heralding an age of mega-constellations that have prompted worries about visual pollution for astronomers.
But the Starlink array in low-Earth orbit, closer to the planet than traditional satellites, is enough to enable SpaceX to roll out service globally. As SpaceX sends up more satellites, the coverage area will grow, expanding the potential customer base — and revenue stream — beyond the initial stages of today.
Sub-Saharan Africans spend the highest proportion of monthly income on smartphones, the chief means for accessing existing internet services. Where the global average is 26%, it is 45% in the region. In the US, Canada, and European countries where Starlink is currently active, the average user does not have device affordability problems on Africa’s scale.
It is yet to be seen if Starlink will adopt different pricing strategies in Africa and least developed countries, the way companies like Spotify and Netflix do– well, this remains to be seen.
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