A few days after it announced it was bidding for licences to operate in Nigeria, Starlink Satellite Internet services of SpaceX has inked a deal with Google’s cloud unit.
Following the deal, SpaceX owned by Elon Musk is expected to install terminals at Google’s cloud data centres around the world with the goal of utilising the cloud for Starlink customers and enabling Google to use the satellite network’s speedy internet for its enterprise cloud customers.
It is a deal that could benefit the market in Africa that SpaceX has its sights set on. Cloud services are often required by organisations having broad footprints, like public sector agencies, businesses with presences at the network edge, or those operating in rural or remote areas.
Starlink seeks to sell internet connections to almost anyone on the planet by way of a growing network of private satellites orbiting overhead. In Nigeria, it would find mostly a market with huge gaps in internet connectivity.
Apart from the poor quality of available internet and uneven distribution of the broadband infrastructure, over 150 communities across the country have yet to be connected for the first time.
As of March 2021, Nigeria’s broadband penetration was at 41.18 percent, a far cry compared with peers like South Africa which has achieved over 90 percent penetration since 2019.
The National Broadband Plan 2020-2025 has set a target of 70 percent penetration. Investment in high-speed internet infrastructure has, however, been slow, as operators struggle to come to terms with high Right of Way fees and regulatory policies that have affected revenues in the past. About 29 states in the country charge fees far above the N145 agreed by the National Economic Council (NEC).
The NCC is also yet to remit its N65 billion counterpart funding pledge for the deployment of broadband infrastructure.
The authorities have in the past identified satellites as a viable alternative to deepening connectivity. This has attracted investors such as MainOne in collaboration with Avanti Communications leveraging Avanti’s HYLAS 4 satellite and Ground Earth Station (GES) infrastructure.
Satellite technology is not dependent on existing telephone line infrastructure, or geographical location. Satellite service is good for people who live in rural areas and in places where traditional telecom infrastructure – like cable, fibre, or phone wiring – isn’t in place.
According to the latest market study by ABI Research, the satellite broadband market will reach 3.5 million subscribers in 2021 — growing at a CAGR of 8 percent to reach 5.2 million users in 2026, and generate $4.1 billion in service revenue.
But embracing SpaceX’s Starlink Satellite internet is practically gambling with a technology that is untested. Starlink may be a spectacular technical achievement that might one day do a lot of things, but at the moment is very much a beta product that is unreliable, and inconsistent.
To be sure Starlink is a name for SpaceX growing network of satellites. The development of the network started in 2015, with the first prototype satellites launched into orbit in 2018. SpaceX has since deployed over 1000 Starlink satellites into orbit across dozens of successful launches. In January, for its first Starlink mission of 2021, SpaceX launched 60 satellites into orbit from Kennedy Space Center using the landable, relaunchable Falcon 9 orbital rocket. Subsequent launches, the most recent of which delivered another 60 satellites into orbit on May 9, have brought the total number of satellites in the constellation up to 1,625. The target is to launch over 12,000 satellites. The company has also indicated that it might ultimately like to launch as many as 30,000 satellites into the constellation overhead.
Starlink has been in development within SpaceX and secured around $885.5 million in a grant from the US Federal Communications Commission at the end of 2020.
In February 2021, SpaceX said that Starlink now serves over 10,000 customers. SpaceX is working toward the expansion of Starlink to some markets in Latin America. SpaceX has also begun to receive pre-orders for the beta version of Starlink from internet consumers in India.
Beyond being untested, the cost of the service could also be a barrier. Although the Starlink is still in beta, the quality of service users get depends on the level of kit they purchase.
For $99 (N40,887) a month, users can expect to see download speeds anywhere between 50 to 150 megabits per second, at a latency (the time it takes to get a response to information sent) of around 20-40 milliseconds.
This is after purchasing the Starlink kit at the cost of $499 (N206,000). For a service targeted at people living in rural communities, the price could be prohibitive.
Starlink expects to double speeds by the end of 2021 as the company continues to launch more satellites, according to a tweet in February by Elon Musk who is CEO of SpaceX. More satellites may not necessarily translate to cheaper internet.
For a country where income levels are shrinking and people living within poverty are among the world’s highest, Starlink may not be worth much of its hype when it confronts these realities.
Nigeria is at the bottom of countries with affordable internet. People in the country have to work 33 hours 42 minutes to afford the cheapest broadband internet in a month, data from Surfshark found. The global average is three hours 48 minutes a month.
But it is still early days and the NCC has said it would take its time to consider the ramifications of the Starlink licence. When it does, it would be one more competitor in the telecommunication market.
How far Starlink Satellite internet services would go would depend largely on the size of its ambitions and how it is willing to deploy resources to achieve in the most populated country in Africa.