• Saturday, December 02, 2023
businessday logo


Starlink’s mobile ambition must come down to earth

Starlink’s internet speed rattles competition

The School of Media and Communication (SMC) at the Pan-Atlantic University, a private university sitting on 250 hectares of land located at Ibeju-Lekki, Lagos, prides itself on being a technology-driven executive communication school. Students in the SMC programme are often exposed to the latest internet connections aimed at facilitating an experiential learning environment.

The SMC department recently joined the growing list of Starlink subscribers in Nigeria. It is a major attraction for students in the programme. However, the expectations of a high-speed and stable connection are hardly met. There is only one router in one of the large classes. Apart from the network tripping off intermittently, once students exit the class, the internet is off.

“The router itself doesn’t seem to be strong unless you use a signal amplifier, which I don’t think they have,” said Emmanuel Paul, one of the students.

According to experts, to effectively cover a large office space, classroom, or home, users require WiFi extenders and possibly an extra router, which all come at additional costs.

Read also: We are engaging Starlink to reduce service costs – NCC

In October, Starlink disclosed the details of its plans for a satellite-delivered cell phone service on its website. The service will operate on bog-standard LTE from cellphone towers in space, which will provide ubiquitous coverage. The company set a timeline for text service in 2024, voice and data in 2025, and Internet of Things service in 2025.

The news got many people speculating whether mobile network operators (MNOs) were going to see serious competition. A post, which was widely shared on WhatsApp, claimed that Starlink will “soon be competing directly with mobile telecommunication companies, like MTN, Globacom, Airtel, and 9mobile, that are providing services with ground equipment.”

Starlink, Elon Musk’s high-speed satellite internet service, may have ambitious plans for Nigeria and other African countries, still, experts say it will take a longer time before the company is ready to take market share from the dominant MNOs on the continent.

“Starlink cannot compete with the telcos in Nigeria, not in the near future anyway. The cost will be much higher,” said a professional in the satellite industry who pleaded anonymity. “The service is likely to be relatively slow by terrestrial standards, with speeds estimated at between two and four megabits per second, but its true advantage will be in the breadth of coverage, potentially helping the service expand its reach and increase its user base from the current 2 million to tens of millions.”

Despite its ambitious projections, Starlink has not had much success in its efforts towards achieving ubiquity. The company only recently surpassed 2 million subscribers globally. SpaceX, the parent company of Starlink, announced on September 23 that the satellite company was supplying broadband internet to more than 60 countries on all seven continents while adding around 500,000 subscribers between early May and late September this year. The subscriber numbers nevertheless fall short of early projections made by SpaceX for the satellite constellation. In 2015, the company told investors that Starlink would have 20 million subscribers by 2022. Five years after the predictions, Starlink closed the year 2022 with only 1 million subscribers.

While it has deployed its services in six African countries—Nigeria, Kenya, Mozambique, Rwanda, Mauritius, and Sierra Leone—its progress on the continent has been slower than anticipated. In some African countries, Starlink is banned. For example, in August 2023, South Africa’s telecom regulator, the Independent Communications Authority of South Africa, ordered IT Lec, the only company rerouting Starlink’s network, to cease the importation of Starlink kits. It also demanded that the Northern Cape-based internet service provider discontinue any active Starlink internet services to users in the country. Starlink is also illegal in Zimbabwe and Senegal.

Starlink faces its biggest test in Nigeria, which, ironically, was the first country where it launched its service in Africa. Since it debuted in January 2023, Starlink has garnered a good number of followers and subscribers. Almost all of those subscribers come from the 1 percent of the country’s population and businesses that can afford the service. For individuals and institutions with large spaces, additional kits to make their Starlink WiFi efficient and stable come at a huge cost.

Read also: IXPN targets 1 Tbps internet traffic by 2024

In October 2023, Starlink slashed the price of its kits by 21 percent in Nigeria. With the price slash, Starlink’s hardware now costs N299,500, down from the N378,000 it was being sold before. However, the monthly subscription to be paid remains unchanged at N38,000 per month.

The 21 percent slash is unlikely to change the minds of many Nigerians grappling with record inflation since the removal of the petrol subsidy and the floating of the naira. The pressure on consumer wallets is already beginning to show, with more subscribers choosing to forgo internet data consumption. Broadband penetration fell to an eight-month low in August, indicating consumers are prioritising food over the internet. The inflation has also led to upward data price adjustments by local internet providers.

Starlink’s direct-to-mobile strategy is expected to give it greater access to local consumers by delivering high-speed internet to them. But that expectation may be disappointed.

Documents released last year reveal that the Direct-to-Cell system will be able to provide “theoretical peak speeds of up to either” 3Mbps or 7.2Mbps peak upload (Earth-to-Space) over 1.4MHz or 5MHz bandwidth channels per beam, respectively, and up to either 4.4Mbps or 18.3Mbps on the downlink (Space-to-Earth) over the same bandwidth channels per beam using LTE (4G) technology.

A mobile internet speed of 3Mbps or 7.2Mbps peak upload is not remarkable. The average user requires 10 Mbps of download speed or even for basic surfing and a seamless online experience.

Experts also say Starlink’s ability to compete with local MNOs is limited without fibre technology. “Even with low-orbit satellites, Starlink still needs fibre in the ground for all-round-quality services.

“They’re expanding their services and will now be competing with satellite phone operators like Thuraya, Inmarsat, and Iridium, who have been charging an arm and a leg for communications,” said a satellite industry professional.

Starlink’s biggest setback is its lack of physical presence in the market. It currently operates through third-party distributors. Getting complaints resolved is not so easy. Also, the lack of presence means that it is not contributing much to the local economy—it is not paying taxes—hence regulators are likely to prioritise operators with physical locations when creating policies.