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January 4, 2023

Telcos, ISPs set to battle Elon Musk’s Spacelink in Nigeria

By Upfrontdigital News 0 262 Views

Musk

By Staff Reporter

AHEAD of the new wave of competition expected in Nigeria’s telecoms space in 2023, especially with the coming of Elon Musk’s Starlink Space X, telecommunications service providers, especially the mobile network operators (MNOs) and Internet service providers (ISPs) seem to be battle ready.

The entrance of Starlink into the Nigerian space was announced last December by the Minister of Communications and Digital Economy, Prof. Isa Pantami, who said that the Nigerian government has approved Starlink’s application as a High Throughput Satellite (HTS) Low-Earth Orbit (LEO) Operator in the country.

“As part of the partnership, Space X is to provide broadband access across the whole of Nigeria, enabling nationwide access to broadband connectivity way ahead of the December 2025 schedule, as outlined in our National Broadband Plan. With this collaboration with SpaceX’s Starlink, Nigeria is set to be the 1st African country to introduce the service,” he said.

Indeed, this announcement sparked fears in some quarters of the industry, with some analysts submitting that with Musk’s financial war chest and service quality the brand is known for globally, Starlink would push some of the current operators out of the market.

But telecoms operators, who spoke with our reporter, said the Nigeria telephony industry is big enough to accommodate more players. They downplayed claims that Musk will push them out of the market.

Explaining the integral part of the matter, a senior telecoms firm’s executive, who preferred anonymity, said: “As you know, Mr. Musk wants to leverage satellite technology as against our GSM/microwave/fibre optic-based network. Satellite is very expensive, but for what Mr. Musk wants to use it for, he will need what they call ‘Low orbit stations,’ which will have strong connectivity for voice and data services. No doubt, this will be very competitive to the services we provide.

“But we are not very worried because to penetrate the market, he will need special terminal devices – mobile phones as presently configured won’t be available to receive signals from the satellite. Only special terminal devices can pick up the signals, you know like DSTV decoders.

“So, a major barrier to entry for Mr. Musk are set up costs; device penetration costs, among others.”

In an earlier submission, the Group Managing Director/Chief Executive Officer, VDT Communications, a Nigerian ISP operator, Biodun Omoniyi, said there is a way that strong global provider energises a market like never before. He said he believes Starlink would have significant competitive effect on the ISP sub-sector of the industry in the area of service quality and pricing.

Omoniyi, VDT boss

Submitting that there is ample market for all, Omoniyi said Nigeria is still a land of scarcity for good broadband service, stressing that the country is the most important and attractive Internet market in Africa, given its population, GDP size and level of penetration.

The VDT boss said Starlink, been a satellite and fixed broadband offering, “it definitely would fill some important gaps that have been gaping all the while.”

According to him, given the entry price point that “I have read in the papers, the market looks more for high brow homes and offices.

MEANWHILE, while news has it that Starlink must have spent between $5 billion and $10 billion in its bid to cover five per cent of the global population, Nigerians interested in the service would need to pay $600 to acquire the setup hardware, which if converted to Naira at the current black market rate of N730 to $1, this amounts to N438, 000.

Space X office, USA

In addition, the subscription to Starlink’s service in Nigeria will cost $43 per month, which is about N31, 000. The company said Nigerians could pre-order the $600 hardware as it prepares to launch this year.

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