By Kabui Mwangi & Collins Omulo
What you need to know:
- Glaring downsides of Starlink is limitation of services like online gaming and video calling.
- Kenya is the sixth African country explored for business by Starlink.
Kenya is one of the 10 fastest growing digital economies in the world, with a substantial slice of its population having access to the internet.
Mobile network operators like Airtel Kenya, Safaricom and Telkom Kenya have been instrumental in expanding internet coverage, enabling millions of Kenyans to stay connected.
However, access to high-speed and reliable connectivity is still a challenge, especially in rural areas. The leading telcos have been relying on fibre optics and submarine cables, leaving many areas without coverage.
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The situation could potentially change with the entry of the American satellite internet company Starlink, a subsidiary of Elon Musk’s SpaceX, into the Kenyan market. It promises to offer download speeds of up to 250 Mbps and upload speeds of up to 35 Mbps.
“The allure of Starlink is undeniable, offering high-speed connectivity through a robust network of satellites, promising to bridge the digital divide in a country where access to reliable internet in some places has been a mirage,” says innovation platform DEMO Africa founder Harry Hare.
Starlink said it will focus on remote areas. This will set the stage for intensified competition with local players, including Safaricom, Jamii Telecommunications Limited (JTL) and Zuku, to tap into the burgeoning mobile Internet adoption in the country.
But how will the pricing play out? Will it water down the competition?
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A quick analysis shows that for the Starlink home-use package, a subscriber in Kenya will be required to part with about Sh100,000 to get the installation, a figure that could potentially be off-putting for a majority of typical users as it is almost a ten-fold increase from what local products cost.
The biggest chunk of the cost goes to the purchase of the hardware kit that includes the dish, a mounting stand, cables and a power source for Sh89,000, while the shipping fee is Sh3,100. The user would have had to first book the kit at a non-refundable fee of Sh14,000 ($99).
After installation, one pays an activation fee of Sh6,500, which is also the monthly subscription charge.
Hardware kit for an office package costs Sh349,106 plus a shipping charge of Sh7,500, while the monthly subscription is Sh13,572.
The payment structure is a far cry from that offered by local providers like Safaricom and Zuku, where customers usually receive hardware components such as routers, whose cost is almost the same as the monthly subscription charge.
“What’s the point of getting Starlink if their internet service is expected to be possibly slower or the same as what you have at home or on 4G or 5G in Kenya? Not to mention the high cost of acquiring the Starlink terminal?” queries Moses Kemibaro, founder and CEO of digital marketing agency Dotsavvy Africa.
A spot check, however, shows that Starlink’s set pricing for the monthly subscription sits at the midpoint of what other internet service providers are charging monthly.
A bronze fibre package of 8 Mbps speed for home use is, for instance, offered by market leader Safaricom at Sh2,999 per month while a silver bundle with speeds of 20 Mbps goes for Sh4,100.
Office-use packages by Safaricom include gold with 40 Mbps speed and diamond with 100 Mbps speed priced at Sh6,299 and Sh12,499 respectively.
JTL offers a 40 Mbps speed package at a monthly fee of Sh5,250, 65 Mbps at Sh10,500, 90 Mbps at Sh15,750 while 140 Mbps goes for Sh21,000.
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Starlink technology is poised to support services that are not possible with traditional terrestrial communications solutions, allowing unmodified smartphones to connect to satellites in areas with coverage gaps.
Mr Hare says Starlink’s competitive advantage lies in its constellation of satellites, providing unparalleled coverage even in remote and underserved areas, arguing that the promise of reliable connectivity holds immense potential for schools, businesses and individuals in remote and underserved areas.
“If Starlink can deliver on its claims of robustness and quality of service, it could revolutionise the landscape, uplifting entire communities with newfound access to education, opportunities, and a global market,” says Mr Hare.
Some of the glaring downsides of Starlink is the limitation of services like online gaming and video calling despite the increased appetite for services such as ultra-high video resolution streaming and real-time 3D gaming.
The multinational indicated that users in Kenya will only be able to engage in common internet activities like mailing, online shopping or streaming movies.
There is also the issue of the actual speeds varying, likely due to cloud cover and weather-related issues affecting satellites, but the firm committed to improve its services dramatically over the next year.
Compounding challenges likely to face Starlink include Safaricom’s spelt out plan to launch a parallel satellite internet service in the local market through a partnership with Starlink’s Texas-based rival AST SpaceMobile, which has signed agreements with the telco’s parent firm Vodafone Group.
Starlink’s entry into Kenya is still in the early stages, identifying Nairobi, Kisumu, Mombasa and Nakuru as the first-stop points. Kenya becomes the sixth African country to be explored for business by Starlink after Nigeria, Mozambique, Mauritius, Rwanda and Comoros.
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Data from the Communication Authority of Kenya released in March this year showed the overall uptake of mobile broadband continues to record growth.
The data indicated that the overall number of mobile data subscriptions rose by 160,000 to hit 47.96 million as of March, out of which 67.1 percent were on mobile broadband.
It is only Safaricom that has rolled out 5G data bundles targeting its over 400,000 customers who use 5G smartphones with typical speeds of between 400Mbps and 700Mbps.
However, the high-internet service rolled out last October is only available in 28 towns across Kenya’s 21 counties.
Airtel, Kenya’s second-largest telco, is also in the same boat but with primary focus on high-end select Nairobi neighbourhoods that have the enabled gadgets and the corresponding purchasing power.
But even if this service was to be scaled up, only about 200,000 out of the close to 30 million smartphones in use in the country, are 5G-compatible with the high cost of acquiring such devices priced between Sh25,000 and Sh150,000, putting off millions of subscribers willing to switch from 4G phones to 5G.
Although this plays perfectly to Starlink’s aim, it awaits to be seen how the dynamics of the new order will play out.
