Starlink to launch in Nigeria and Mozambique
In a tweet, by Elon Musk, on May 27th, Starlink, SpaceX’s owned service, has been approved in Nigeria and Mozambique. The subsidiary aims at democratizing access to the internet, by providing high-speed, low latency broadband internet to countries across the globe. SpaceX points out that these regulatory approvals imply the low-Earth orbit network will now have been approved to operate on all the continents.
Through these approvals, Starlink aims at providing fast internet connectivity in areas where internet connectivity has been unreliable or completely unavailable. The overarching goal of the network is to enable internet users in rural areas to have as much access in speed and quality to the internet as users in the urban and developed areas.
Increasing internet connectivity in Africa
Africa is reckoned as having about 400 million people connected to the internet, of a population of over 1.2 billion. What this implies is that more than half of the continent is still cut off from access to the internet. Of these countries of Africa connected to the internet, Morocco has the highest internet penetration at approximately 84.1 percent, followed by Seychelles. Even in spite of these, many countries of Africa are leveraging connectivity to the internet in transforming their economies. As such, these have resulted in the emergence of many startups across the continent aimed at solving many challenges within their communities. Yet, there are challenges that exist with regards to having fast and reliable access to the internet for many of these countries. As such, in terms of internet speed, many top African countries rank poorly, with, Reunion, South Africa, Morocco, Madagascar, Kenya, and Congo all ranking remarkably better, in comparison to other African countries.
The network’s 100 Mbps download speed is remarkably about five times higher than the highest median download speed recorded in Nigeria for fixed broadband between January and March this year. The average download speed for mobile internet in sub-Saharan Africa stood at 9 Mbps in 2020. For Nigeria, this stands at about 17.38 Mbps.
The challenge of affordability
In spite of these promising opportunities for bridging the gaps in connectivity on the continent, the service may yet be too expensive for its targeted users. Following a recent price review downwards, the service now costs a one-time fee of $599 (formerly $499) for the dish and router and $110 (formerly $99) for a monthly subscription. Meanwhile, the premium product tier costs about $2,500 for installation and $500 in monthly fees.
In terms of affordability, Africa’s internet usage has improved drastically, with A4AI reporting that the cost among the regions has fallen from 4.4% to 3.3$ between 2020 and 2021. Of all the African countries, Malawi had experienced the greatest improvement in terms of affordability in 2021 with costs falling from 14% to 6.2%, in 2021. Countries like the Democratic Republic of Congo, Madagascar, Sudan, and Ethiopia also have seen remarkable cost reductions in their 1GB of mobile data.
On the continent, annual living wages are poor, as many African economies struggle with debt and poor infrastructure. In Nigeria and Mozambique, the situation is even worse, with poverty rates at above 40% in both countries (implying that over 91 million people in Nigeria live below the country’s poverty line of $381.75; in Mozambique, these poverty rates stand at an alarming 60%).
Starlink: Hidden opportunities for African economies
In the face of these unique challenges, the news of Starlink’s entry into Africa brings a dilemma between access and affordability. Starlink’s offerings appear rather costly, and, as such, cut off from access of the common man in Africa. It appears that the service may only enhance the usage of a majority of urban dwellers on the continent who are keen on faster and more reliable internet services. Starlink’s entry however would ensure that businesses across the continent can operate a lot easier, with reduced operational costs, having the ease of connectivity within its country of location. At the moment, a lot of these businesses are subject to the regular epileptic internet supply of Internet Service Providers. Also, the entry of the new player would ensure that the competition for internet services increases, and allows a beatdown of internet prices for a bulk of the population seeking access.
It is also envisaged that this service can help in transforming remote work in African countries, as people would no longer be constrained by areas with great access to ISP services. As long as users can afford the payment for the service, they can work almost anywhere within the country where they live, and access super fast internet service. These services are not also dependent on network infrastructure like base stations that would need to be run with an alternative power supply.
While people may lament the weighty cost of securing these services for rural areas, it is remarkable to note that these services can be useful in connecting schools, hospitals, businesses, etc. within these rural areas that struggle with poor internet connectivity due to neglect. According to Elon Musk, one Starlink can provide fast internet services to a school with hundreds of students. As such, communities and governments can pull resources together to purchase these for people within their communities. Also, while currently, the costs of acquiring the service appear exorbitant, it is very possible that Starlink bows to pressure to tailor its costings to match Africa’s peculiarities in terms of consumer purchasing power and the existing market dynamics. If this happens, the competition for internet services will increase rapidly and herald faster and more affordable internet services for Africans.
Either way, the entry of Starlink into the African market offers many salient opportunities for individuals and businesses to grow.