Internet promises for remote areas, but can Kenyans afford Starlink?

By | August 12, 2023

Kenya is one of the 10 fastest growing digital economies in the world, with a significant portion of the population having access to the internet.

Mobile network operators such as 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 connections remains a challenge, especially in rural areas. The leading telecommunications companies have been dependent on fiber optics and submarine cables, leaving many areas without coverage.

The situation could potentially change with the US satellite internet company Starlink, a subsidiary of Elon Musk’s SpaceX, entering the Kenyan market. It promises to offer download speeds of up to 250 Mbps and upload speeds of up to 35 Mbps.

“Starlink’s allure is undeniable, offering high-speed connectivity through a robust network of satellites that promises to bridge the digital divide in a country where access to reliable internet has been a mirage in some places,” says the founder of the innovation platform DEMO Africa, Harry Hare.

Starlink said it will focus on remote areas. This will set the stage for heightened competition with local players including Safaricom, Jamii Telecommunications Limited (JTL) and Zuku to capitalize on the burgeoning mobile internet adoption in the country.

But what will the pricing look like? Will it dilute the competition?

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 to a majority of typical users as it is. almost ten times what local products cost.

The major part of the cost goes towards the purchase of the hardware kit which includes the dish, a mounting stand, cables and a power source at Sh89,000 while the shipping fee is Sh3,100. The user had to first book the kit for a non-refundable fee of Sh14,000 ($99).

After installation, you pay an activation fee of Sh6,500, which is also the monthly subscription fee.

Hardware kit for an office suite costs Sh349,106 plus a shipping fee of Sh7,500, while the monthly subscription is Sh13,572.

The payment structure is a far cry from that offered by local providers such as Safaricom and Zuku, where customers usually receive hardware components such as routers whose price is almost the same as the monthly subscription fee.

“What’s the point of getting Starlink if their internet service might be expected to be 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?” asks Moses Kemibaro, founder and CEO of digital marketing agency Dotsavvy Africa.

However, a spot check shows that Starlink’s flat rates for the monthly subscription are in the middle of what other ISPs charge on a monthly basis.

A bronze fiber bundle with 8Mbps speed for home use, for example, is offered by market leader Safaricom at Sh2,999 per month, while a silver bundle with speeds of 20Mbps goes for Sh4,100.

Office usage packages from Safaricom include Gold with 40Mbps speed and Diamond with 100Mbps 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.

Starlink technology is poised to support services not possible with traditional terrestrial communication solutions, enabling unmodified smartphones to connect to satellites in areas with coverage gaps.

Sir. Hare says Starlink’s competitive advantage lies in its constellation of satellites that provide unmatched coverage even in remote and underserved areas, and argues that the promise of reliable connectivity holds enormous potential for schools, businesses and individuals in remote and underserved areas.

“If Starlink can deliver on its claims of resilience and quality of service, it could revolutionize the landscape and uplift entire communities with newfound access to education, opportunity and a global market,” says Mr. Hare.

Some of the glaring disadvantages of Starlink are the limitation of services such as online gaming and video calling, despite the increased appetite for services such as ultra-high definition video streaming and real-time 3D gaming.

The multinational indicated that users in Kenya will only be able to engage in common internet activities such as mailing, online shopping or streaming movies.

There’s also the matter of actual speeds varying, likely due to cloud cover and weather-related issues affecting satellites, but the company committed to improving its services dramatically over the next year.

Compounding challenges likely to face Starlink include Safaricom’s outlined 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 deals with the telco’s parent Vodafone Group.

Starlink’s foray into Kenya is still in the early stages, identifying Nairobi, Kisumu, Mombasa and Nakuru as the first stops. Kenya will be the sixth African country to be explored by Starlink, following Nigeria, Mozambique, Mauritius, Rwanda and the Comoros.

Data from the Communication Authority of Kenya released in March this year showed that overall mobile broadband penetration continues to register growth.

The data indicated that the total number of mobile data subscriptions rose by 160,000 to reach 47.96 million in March, of which 67.1 per cent were on mobile broadband.

Only Safaricom has rolled out 5G data packages targeting its over 400,000 customers using 5G smartphones with typical speeds between 400Mbps and 700Mbps.

However, the high speed internet service, which was launched in October last year, is only available in 28 towns in Kenya’s 21 counties.

Airtel, Kenya’s second largest telco, is also in the same boat, but with a primary focus on exclusive selected Nairobi neighborhoods that have the enabled gadgets and the corresponding purchasing power.

But even if this service were to be scaled up, only about 200,000 out of the nearly 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, deterring millions of subscribers willing to switch from 4G phones to 5G.

While this plays perfectly to Starlink’s goals, it remains to be seen how the dynamics of the new order will play out.

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