Safaricom has opened the mother of all battles with the newest entrant into the Kenyan internet market. Starlink, owned by US billionaire, Elon Musk, is giving Safaricom a run for its money after registering a good growth in the number of subscribers in its year. The subsidiary of Musk’s aerospace company, SpaceX, first entered the Kenyan market in July 2023.
In a long letter dated July 5th, 2024, the M-Pesa providers are asking the government of the day to reconsider its decision to award licenses to satellite internet providers.
The lead telco, in terms of revenue and subscribers, is asking the Communications Authority of Kenya (CAK) to re-evaluate its decision to grant independent licenses to Satellite service providers. They warn the plan could allow for illegal connections and negative interference to mobile networks.
Elon Musk is the world’s richest person, with a staggering net worth of $237 billion (KSh30.6 trillion) and that cannot be underestimated. He is lowering internet costs even further in a tight market dominated by Safaricom, Zuku, and Jamii Telecommunications Limited (JTL).
Mid this month, Starlink introduced a rental plan for its equipment in a bid to lower the initial cost of connectivity. The monthly lease cost of the kit is KSh1,950. This is on top of the KSh1, 300 charges for the company’s 50 GB data plan, or the KSh6, 500 monthly fee for its unlimited package.
Initially, users had to part with KSh45,500 upfront without the rental option to purchase the hardware kit.
Kenya’s internet market is dominated by Safaricom with a market share of 37.4% from the latest data reports. The giant telco is followed by JTL at 22.6%, Zuku at 18% and Poa Internet Kenya at 13%.
The communications authority has given satellite landing rights to 10 firms.
Safaricom Plea to CAK
Safaricom wants Starlink to be compelled to partner with existing internet providers already in the market. They are opposed to Starlink opening a stand-alone shop, arguing that their direct entry to the market poses a danger to the network quality of mobile telephony.
“Safaricom kindly requests the Communications Authority of Kenya to carefully assess the risks of granting independent licenses to Satellite service providers and the consequent harm it may cause to Kenya,” said Safaricom in a letter to the CEO of CAK, David Mugonyi.
“We propose that the CA instead consider mandating the Satellite service providers to only operate in Kenya subject to such providers establishing an agreement with an existing local licensee,” in theletter written by its acting Chief Corporate Affairs Officer, Fred Waithaka.
Safaricom wants the Satellite service providers to operate as infrastructure providers while giving the operating license to the existing mobile network operators (MNO).
“Co-existence with mobile networks will not be possible and in the absence of effective management and co-ordination, Satellite provided service will cause interference to mobile networks which will ultimately adversely affect end users and related socio-economic benefits,” said Waithaka.
Mr Mugonyi (CEO of Communication Authority), and Starlink did not immediately respond or comment on the Safaricom plea letter.
Starlink’s Disruptive Entry
Starlink’s entry has stiffened the competition further for the local players, by targeting disenfranchised areas using conventional terrestrial technology.
Communications Authority data shows its internet subscriptions hitting 4,808 in March, up from 2,933 in December. This marks 1,875 new users, representing a 63.92% growth.
Many Kenyans welcomed the new player with demand for the internet surging beyond entertainment to work-related.
Starlink Challenges In Africa
Other African countries that have welcomed Starlink include Nigeria, Rwanda, Mozambique, Malawi, Zambia, Benin and Eswatini. Its entry into Africa has not been smooth though. It has been met with numerous obstacles, such as Cameroon, Cote d’Ivoire, South Africa, Senegal, and DRC, classifying it as ‘illegal’.
Cameroon even ordered the seizure of Starlink equipment at ports stating that the provider was not licensed. South Africa, Musk’s country of birth, Starlink was denied access after it failed to comply with the requirement to cede a 30% stake to the locals.
The biggest concern by African governments is the need to control the content shared on Starlink.
In April, US media Wall Street Journal reported the existence of a black market for Starlink’s user terminals which are being used even by terrorists in Sudan.
Kenya’s internet connectivity stood at 29% by the end of 2023. This is below the global average of 65%. Djibouti leads the pack in the region at 69%.
According to a World Bank report, Kenya, however, pays less for mobile data compared to its peers, following a conducive policy environment and higher incomes.
