Elon Musk’s Starlink Set to Improve Nigeria’s ISP Market
Following the operational licenses handed to Space Exploration Technologies Corp (SpaceX), owned by world’s richest man, Elon Musk, to operate in Nigeria, there appears to be hope of connectivity for the about 114 access gaps (communities without telecoms services) in Nigeria.
Data from the Nigerian Communications Commission (NCC) showed that the 114 access gaps in the country currently house some 25 million Nigerians without basic telephony services. It must also be stated that where there are coverage currently, telecoms services have not been optimal.
Besides, the coming of Starlink is expected to boost Federal Government’s efforts, as enshrined in the National Broadband Plan 2020 to 2025, to reach 70 per cent broadband penetration, covering 90 per cent of the population by 2025. Already, analysts have submitted that the coming of SpaceX, which brings Starlink into Nigeria’s over $75 billion telecoms market, is poised to cause a paradigm shift in telecommunications services in the country.
Starlink is a satellite Internet constellation operated by SpaceX, providing satellite Internet access coverage currently to 32 countries of the world. There are about 69,000 active Starlink users in the United States and other selected locations in the region.
Musk had on Friday, tweeted @elonmusk that Starlink had been approved by Nigeria and Mozambique to provide services.
The Guardian gathered that SpaceX, got six different licences, including Internet Service Provider (ISP) operational licence; International Data Access (IDA) operational licence; Full Gateway Operational licence; Sales and Installation Major (S&I- Major) licence; Gateway Earth Station (GES) Network Frequency licence per Gateway the company is to build; and Very Small Aperture Terminal (VSAT) Network Frequency licence.
Starlink’s journey into Nigeria’s telecoms sector actually started May 2021, when a delegation from SpaceX, known for innovations, visited NCC in Abuja. The Guardian, however, gathered that the deal was sealed in Barcelona, Spain, at the yearly Mobile World Congress in February 2022.
As it is, Starlink will be competing against MTN Nigeria, Glo, Airtel and 9mobile and other ISPs in the market. This is coming on the back of about $30 billion, which the U.S company has projected to spend to make its service available in many markets, including Nigeria.
At the commencement of the move last year, Musk had tweeted, where he disclosed that Starlink is, “expecting over 4,200 Starlink satellites in operation within 18 months, which is two-third of all active satellites of Earth,” which makes it a force against existing players in the country.
The Guardian gathered that Lagos, Abuja and Benin are some of the areas mentioned for availability of Starlink in Nigeria when it begins operations soonest. SpaceX is reported to have spent between $5 billion and $10 billion in its bid to cover five per cent of the global population. With Starlink tipped to offer high-speed, low-latency broadband Internet across the globe, hope of improved telephony services may have come to Nigeria, albeit expensive.
But to show its readiness for the Nigerian market, it was gathered that SpaceX had already launched several satellites into space, and currently in the process of launching a low-earth orbiting (LOE) constellation of satellites to provide low latency, high bandwidths Internet to all corners of the globe and Nigeria would be a critical market.
The coming of Starlink may be a decisive period for ISPs in the country, which has continued to reduce numerically due to supposed economic challenges, lack of innovation, among others, that have made many to close shops. Statistics gathered from NCC as at the last quarter of 2021 revealed there were 73 licensed ISPs with 351,817 connected subscribers, of this, 198,090 were active users.
The ISPs, as listed by NCC, includes VDT Communications, Dimension Data Limited, Hypria Ltd, Layer 3, IpNX Nigeria Ltd, MainOne Cable Limited, Odua Telecoms Ltd, Tizeti Network Ltd, Cyberspace, Spectranet, among others, only have 1,879 Point of Presence (PoP) across the country.
Interestingly, the quartet of MTN, Airtel, Globacom and 9mobile, due to their Universal Access Service License (UASL), also offer Internet service. They currently have 145 million users. MTN has 60 million, Globacom 39.7 million, Airtel 39.3 million and 9mobile 5.5 million, as at March 2021.
Broadband users as at first quarter 2021, stood at 80.6 million with 42.7 per cent penetration in the country.
On the possible impact of SpaceX on the Nigerian telecoms sector, the National Coordinator, Alliance for Affordable Internet (A4AI), Olusola Teniola, said satellite is used for many applications right from solving military to medical problems in hard to reach areas. Teniola explained that satellite technology was very prevalent in telecoms in the absence of wide coverage of terrestrial networks especially during the 1980s to 2008 and before the advent of the laying of additional undersea fiber cables in the shores of Lagos.
The former ATCON boss said SpaceX offers another opportunity in addition to 5G and fibre to deliver hyper-fast broadband speeds to those that can afford to subscribe to the offerings being brought to market.
He said it is more than likely that those that live in the affluent parts of the cities will be able to now have an option to choose from. “So SpaceX will present a switching of customers from one technology to another at a price range that might exclude the low-income earners or those struggling to survive on a minimum wage.”
According to him, like the war between GSM and CDMA, SpaceX may challenge the 4G and 5G advance on a per Mbps basis. “I personally foresee a situation where different business models will be created to merge the strengths of each emerging technology to deliver the customer and consumer benefits. Price will always be the determinant and affordability the key outcome and measure of acceptability.
“In the Broadband Plan, it was envisioned that 4G should cover 90 per cent of the population by 2025 and that a mixture of both satellite and 5G technology will fill the remaining 10 per cent,” he stressed.