• Thursday, July 18, 2024
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Inside Starlink’s rise as third largest ISP in Nigeria

Elon Musk’s Starlink slashes price to N440,000 on stronger naira

On January 30, 2023, SpaceX tweeted, “Starlink is now available in Nigeria – the first African country to receive service.” The service has become the country’s third largest internet service provider (ISP), with 23,897 active subscribers in 12 months.

The satellite internet provider, which allows direct connections from satellites, trails only established players ISPs Spectranet Ltd (113,869 active subscribers) and FiberOne Broadband Ltd (27,000 active subscribers).

ISPs are still generally behind mobile internet providers in a country where mobile internet is the primary gateway to the internet for many (mobile internet subscriptions were 163.35 million as of December 2023), but 262,206 subscribers depend on them for fast internet access.

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Unlike mobile internet services, ISPs (fixed broadband) offer faster speeds by bringing connectivity closer through fibre cables. Mobile internet, reliant on radio waves from base stations, suffers from congestion and lags fixed broadband speeds.

Starlink’s initial launch price of N274,098 for hardware and a monthly subscription fee of N19,260 did not deter those seeking faster internet. This is a significant advantage in a country where typical speeds are around 20 Mbps, and reliability is a concern. Starlink offered speeds ranging from 50Mbps to 200Mbps.

Furthermore, the satellite internet provider isn’t encumbered by the many challenges that ISPs face. Nigeria’s underdeveloped fixed broadband infrastructure and economic hardship burden ISPs, as well as rising diesel costs and multiple taxes, further exacerbate their burden.

Ayoola Oke, a former advisor to Ernest Ndukwe, the former chief executive officer of the Nigerian Communications Commission, recently stated that about 90 percent of these telecom firms might fold up within the next five years.

Starlink leverages a network of satellites launched into orbit by SpaceX rockets. These satellites communicate with user terminals (hardware) on earth. They can beam high-speed internet to nearly every corner of the planet. With almost 6,000 Starlink satellites in orbit today, a SpaceX engineer reported that over 42 petabytes of data were transmitted daily in January 2024.

Starlink satellites orbit the earth at much lower altitudes than traditional satellite internet services, enabling them to cover small areas and requiring a user terminal for continuous connection with passing satellites. This low-earth orbit approach gives Starlink an edge over ISPs requiring expensive, large-scale infrastructure rollouts for expansion.

The technology brings internet access to underserved areas. In a country where broadband penetration is less than 50 percent, and 27 million people live in areas without broadband access, the satellite internet provider offers a solution, albeit at a price that is still largely out of reach to many.

“Starlink is ideally suited for areas where connectivity has been unreliable or completely unavailable,” its main page reads. “People across the globe are using Starlink to gain access to education, health services, and even communications support during natural disasters.”

“Everywhere on earth will have high bandwidth, low latency internet,” Elon Musk, owner of SpaceX, predicted in 2020. On May 20, 2024, he tweeted, “Congratulations to the @SpaceX team on passing 3 million customers in 99 countries! And thanks to you for buying @Starlink.”

Despite its growth, Starlink has also had to adjust to Nigeria’s economic realities. Due to the naira’s devaluation, the hardware price initially rose to N800,000 but now sits at N440,000. The monthly subscription fee is currently N38,000.

While Starlink may not become the primary internet gateway for most Nigerians, it has undeniably disrupted the market by offering faster and more reliable internet service.

“Some people will take up the solution, some will continue to rely on their mobile devices for internet access, and others will be for fixed wireless access. If this happens, the consumers are provided with alternatives,” said Biodun Omoniyi, chief executive officer of VDT Communications.