A year ago, Elon Musk-owned Starlink announced plans to launch in Africa’s most populous country – Nigeria. The Space X subsidiary said last year that it had come into a partnership with the Nigeria Communications Commission (NCC) and had started the process of procuring necessary licenses to be able to fully launch the internet service in Nigeria.
The NCC noted that the Starlink proposal had been taken into account and that whatever decision that’d made concerning the proposal will be in line with its regulatory duties to ensure that the competition among telecom companies in Nigeria remains healthy. “As the regulator of a highly dynamic sector in Nigeria, the commission is conscious of the need to ensure that our regulatory actions are anchored on national interest”, the commission stated.
Notably, the Nigeria Communications Commission (NCC) said that Starlink could be one of the ways of achieving the Federal Government’s plan of reaching 90 percent of the country’s population by 2025. The Starlink proposal came shortly after a partnership with Microsoft geared towards providing rural areas with internet connectivity through Microsoft’s Airband Initiative was announced by Vice President Yemi Osibajo.
Just a year after the NCC received the Starlink proposal, the regulatory body granted the Elon Musk-owned company a license to operate in Nigeria. Elon Musk has since taken to Twitter to share the development.
Starlink approved by Nigeria 🇳🇬 & Mozambique 🇲🇿https://t.co/Q1VvqVmJ2i
— Elon Musk (@elonmusk) May 27, 2022
Starlink is a satellite internet constellation operated by Elon Musk-owned space company Space X. Starlink currently provides satellite internet access coverage to 32 countries where it has already acquired licenses.
According to the NCC, “The company received two licenses, which includes the International Gateway license and Internet Service Provider (ISP) license and will be trading as Starlink Internet Services Nigeria Ltd.,” adding that “the International Gateway license has a 10-year tenure while the ISP license is to last for five years. Both licenses take effect from May 2022 and may be renewed after the expiration.”
With Starlink, which is satellite-powered, not far away from being operational in Nigeria, what does this mean for local internet service providers? In Nigeria, four major internet service providers are meeting the needs of the populace. They are MTN, Airtel, 9mobile, and Glo which is an indigenous brand. Starlink’s appearance in the Nigerian market is set to create a different type of competition between internet service providers in the country.
Apart from the four ISPs mentioned earlier, there are a handful of others operating in Nigeria such as Spectranet, Smile, Tizeti, FibreOne, etc. With all these providers available in the country, there is still quite a huge gap to be filled in terms of speed. No one has been able to provide the perfect all-around service or experience for customers.
This may be about to change as Starlink which will soon be available for all in Nigeria provides its internet services via satellite. Unlike others, its internet service will not suffer geographical limitations and will be available everywhere irrespective of if the area is urban or rural. This means someone living in a rural part of Osun state can enjoy the same internet speed as someone living in an urban area in Lagos, which hardly happens with other ISPs as speed has been shown to differ from area to area within the country.
One thing may, however, be an impediment to the advantage Starlink has over other ISPs. This deciding factor is how competitive the price for Starlink’s services will be.
Currently, Starlink costs $110 per month with a one-time equipment fee of $599 for speed levels of 50-250 Mbps. In Nigerian naira, this translates to a monthly fee of 66,000 naira and a one-time equipment fee of 359,400 naira, using the rate of 600 naira to $1. Starlink also has a business plan which comes at a monthly subscription of $500 or 300,000 naira and a one-time equipment fee of $2,500 or 1.5 million naira using the same exchange rate above. When converted to dollars, existing similar internet plans in Nigeria cost just about $50.
The company may, however, consider the Nigerian realities as well as the country’s currency value while deciding its pricing for the country if not the average person will not be able to afford it and Starlink doesn’t seem like it is looking to be an esoteric internet brand.
If Starlink offers competitive prices that consider the realities of Nigeria, it could go ahead to eradicate the stiff competition existing in the market. This will cause ISPs to reduce their prices if they are looking to compete with Starlink which has a big edge over them. This will be hugely beneficial for internet users in Nigeria.
In the past, the Nigerian government has revealed reduced internet plans which it plans to enforce to allow more people access to the internet. If not now, but in the future regulations may force ISPs to reduce their pricing for internet access.
Starlink’s appearance in the Nigerian space promises to come with plenty of benefits. With its fast and ubiquitous internet, Nigeria will be able to narrow the gap when it comes to providing internet services in rural areas and areas where reach has either not gotten to or services are just bad. By design, Starlink is a low latency broadband internet system created to meet the needs of consumers in rural areas with low internet penetration across the globe. With the amount of speed currently offered by Starlink, other ISPs in Nigeria will be challenged to improve their services if they hope to still be at the forefront of providing internet services. Starlink will, therefore, give room for healthy competition and consumer-focused products.
As earlier stated, Starlink was granted two licenses by the NCC. The International Gateway license which is to be used for ten years gives the company the prerogative to own, operate and maintain an international gateway for the provision and operation of international access and gateway services in Nigeria. Hence, the company will be able to offer services such as global mobile personal communication by satellite, mobile radio services, VSAT Services, internet nodes, etc.
Starlink promises to change the experience of internet users in terms of speed. Apart from the licenses it received in Nigeria, the company also received the go-ahead to operate in Mozambique.