Starlink seek greater market share in Africa with “game-changing” router-free service

By Seth Onyango, bird story agency

Billionaire Elon Musk’s Starlink looks set to further disrupt Africa’s internet market with a router-free offering.

Cutting out the need for expensive hardware would help Starlink undercut traditional monopolies like Safaricom and MTN and expand its market share in a region where high costs have long been a barrier to wider internet access.

Martin Macharia, a Kenyan tech analyst, sees this development as a pivotal moment for Africa’s internet landscape.

“Starlink’s router-free option could be a game-changer in Africa. It removes one of the biggest cost barriers and could lead to widespread adoption of satellite internet. This will for sure upset incumbent providers,” Macharia said.

“It is not just about cheaper internet—it’s about breaking the stranglehold that local providers have on the market which is good because general offering improves.”

Innovation Village reported that the satellite provider’s strategy will enable mobile phones to connect directly to satellites, bypassing needless expenditure on hardware.

Starling submitted a filing outlining its plans to the US Federal Communications Commission (FCC) in May of this year.

Such a service removes one of the last remaining barriers to the widespread adoption of satellite internet in Africa, where high upfront hardware costs have kept many potential users on the sidelines.

The move comes as Safaricom, the leading telecommunications provider in Kenya, pushes for tighter regulations on Starlink, wary of the potential threat to its lucrative data bundle business.

Safaricom has enjoyed near-monopoly status in Kenya, leveraging its extensive infrastructure and customer base to maintain a stronghold on the market.

The Vodacom-owned East African giant in June 2023 announced its intention to use AST SpaceMobile’s satellite internet offering to improve its broadband services. Vodacom’s majority owner, Vodafone and AST SpaceMobile have trialed space-based voice and data, announ ing success with space-based 5G voice calling and data and download speeds of nearly 14 Mbps by September 2023. 

In March, MTN Group, Africa’s largest telco by subscriber base, announced a foray into direct-to-device (D2D) satellite services, after partnering with US-based satellite broadband provider Omnispace.

In a joint statement, the two said they were exploring using S-band (2-4GHz) frequencies for satellite services to expand MTN’s portfolio of wireless services to its over 290 million customers in 19 countries.

However, Starlink’s aggressive push into the region with its cost-cutting strategy could erode the dominance of established telco’s like MTN and Vodacom.

The impact of Starlink’s move could be especially significant in rural and underserved areas where traditional ISPs have struggled.

Starlink’s technology, which doesn’t rely on ground infrastructure, could offer a viable alternative to the patchy service many Africans currently experience.

“Safaricom and others need to wake up,” Macharia added. “Starlink’s aggressive push could very well upend the current market dynamics.”

Safaricom’s push for tighter regulation on Starlink is a clear indication of the fears within the industry that Musk’s satellite service could destabilise the traditional telecom hierarchy that has existed for years.

Starlink’s planned approach, sidestepping the need for ground infrastructure, could provide a more reliable and affordable alternative to traditional ISPs, many of which have struggled with providing consistent service in remote locations.

Its move could force incumbent ISPs like Safaricom and MTN to lower their prices and rethink their strategies to remain competitive.

Macharia notes that the shift towards satellite-based internet could also lead to significant changes in how data is managed and utilised across the continent.

With Starlink’s  planned direct-to-satellite connections, there is potential for a new wave of digital services and applications that leverage this high-speed, low-latency internet.

This could drive innovation in sectors like fintech, e-commerce, and education, where connectivity has been a limiting factor.

However, the success of Starlink’s expansion into Africa is not guaranteed. While the router-free service may lower costs, the overall affordability of Starlink’s service remains a concern.

The initial cost of the Starlink kit, even without the router, and the ongoing subscription fees may still be out of reach for many low-income households.

This raises questions about whether Starlink can truly democratise internet access in Africa or if it will remain a service for the more affluent.

Additionally, regulatory hurdles could pose significant challenges.

African governments have a history of imposing strict controls on new technologies, particularly those that threaten existing monopolies.

Starlink will likely face scrutiny and possibly resistance from both regulators and traditional ISPs looking to protect their market share.

How these dynamics play out will be crucial in determining whether Starlink can establish a foothold in Africa’s competitive telecom market.

The coming months will be critical as Starlink’s plans for Africa become clearer. Whether the company can deliver on its promise of affordable, high-speed internet will determine its impact on the continent’s digital future