Safaricom Urges Caution in Licensing Satellite Service Providers in Kenya
Safaricom, Kenya’s leading telecommunications company, has called on the Communication Authority of Kenya (CA) to exercise caution when granting independent licences to satellite service providers. In a recent letter to the CA, Safaricom expressed concerns about potential risks and harm to the Kenyan telecommunications landscape.
The company proposed an alternative approach. They suggested that satellite service providers should only be permitted to operate in Kenya through partnerships with existing local licensees. Under this model, satellite companies would function as infrastructure providers to licensed operators, fostering innovation while mitigating potential negative impacts.
To support its claims and illustrate its commitment to innovation, Safaricom discussed its partnership with Avellan Space Technology and Science (AST) for a space mobile solution. AST serves as an infrastructure provider to Safaricom for this service. This would be a Direct-to-Device model where technological advancements enable direct radio access service from space stations to end-user terminals on Earth. If approved by the CA, this collaboration aims to explore the technology’s potential within the existing regulatory framework.
Furthermore, Safaricom underscored its significant investments in acquiring national operating licences and building mobile network infrastructure throughout Kenya. Safaricom reaffirmed its dedication to complying with local laws and regulations. In addition, they contribute to Kenya’s socio-economic objectives, reinforcing its commitment to innovation and compliance.
This news comes after Starlink recently launched a kit rental option to the Kenyan market. Customers can rent Starlink hardware for KSH 1950 (USD 15). Kenyans on social media have welcomed this move, terming it a disruptive technology and enabler of internet services.
A Broader Trend Across Africa: Similar Indications Beyond Kenya
In response to Starlink’s entry into African markets, local telecommunications companies are positioning themselves to maintain their competitive edge. For others, the arrival of Starlink’s Low Earth Orbit (LEO) satellite internet service has sparked concern among established providers. They recognise the potential disruption to their existing business models and market shares.
Disruption to Indigenous Providers
Local telecommunication companies in Nigeria and Cameroon have expressed concerns that introducing Starlink could threaten the operation of state-owned telcos and other Internet Service Providers (ISPs). Although not yet operational in Cameroon, the Minister for Posts and Telecommunications, Minette Libom Li Likeng, said that Camtel, the state-owned telecom operator, has to improve its services or risk a significant takeover from Starlink.
Gbolahan Awonuga, who leads operations at the Association of Licensed Telecom Operators of Nigeria (ALTON), suggested that without proper regulation, Starlink’s presence might lead to the demise of existing Internet Service Providers (ISPs) and stagnate the growth of traditional telecom companies. Similarly, like Safaricom, ISPs in Nigeria have stated that local players have already made significant infrastructure investments to provide internet coverage to rural and remote areas. However, this is also Starlink’s goal- to provide high-speed internet access to these areas, thereby bringing conflict of interest.
Action: Adapting to Change
Other mobile network operators across Africa have taken action to compete effectively with upcoming ISPs. Starlink’s entry has already led to lower prices from local internet providers across many African nations as they look to cement their place in their customer’s minds.
One notable example is Zimbabwe’s state-owned TelOne, which has partnered with Eutelsat OneWeb in response to Starlink’s scheduled launch. In addition, this collaboration allows TelOne to leverage OneWeb’s LEO satellite network. This will enable them to offer comparable high-speed, low-latency internet services. TelOne’s CEO, Lawrence Nkala, acknowledges the move to embrace new technologies to remain relevant in the face of emerging competition.
The focus will shift to making internet services more affordable for consumers. TelOne’s strategic move coincides with Starlink’s anticipated launch. It shows how local telcos are adapting their business strategies to address the changing landscape of satellite internet services in their respective markets.
Not Threatened
Liquid Intelligent Technologies in Zimbabwe maintains a confident stance in the face of Starlink’s entry into the market. According to Chief Commercial Officer Lorreta Songola, the company does not view Starlink as a direct threat to its operations. In addition, Songola clarified that recent price adjustments made by Liquid are not in response to potential competition from Starlink. It is a reflection of broader market dynamics, particularly the stability of the nation’s currency, the Zimbabwe Gold (ZWG). This statement suggests that Liquid is positioning itself as a well-established player that responds to local economic factors rather than reacting to new market entrants.
Future Regulatory Hurdles
In its quest for expansion across Africa, Starlink is facing pushback from local telcos. They have seen the trend across other African countries and are taking a stance to protect their local landscape.
With the operation of Starlink commencing in the third quarter of 2024 in Zimbabwe, the operator had earlier faced regulatory challenges. Recently, Starlink halted its internet services in the country after being labelled an unauthorised operator. The Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) instructed users to stop using the service and cease payments. Moreover, the regulator presented Starlink with three options: partner with licensed Public Network Operators through a Virtual Network Operator agreement, apply for its operating licence, or have its customers obtain private network licences for satellite systems operated from outside the country.
Similar network operators and governments seem hesitant about Starlink’s arrival. Several African nations, including Botswana, Ghana, South Africa, and Zimbabwe, have raised concerns, citing potential threats to national security. However, these operators (and the government) may be primarily concerned about the technology’s potential to limit state control over information flow. This is especially significant during politically sensitive times, such as elections or civil unrest, as seen in Sudan and Libya.
The reality of Starlink entering the African market is that it poses a significant threat to local telecom monopolies in crucial areas like internet access, affordability, and reliability. Moreover, governments with struggling telecom infrastructure will likely work hard to block Starlink for understandable reasons. If Starlink’s threat is real, it could cut these monopolies’ revenue. Consequently, this would result in lower revenues for local telecom companies, reduced tax income for governments, and possible job losses.
Conclusion
With Starlink’s rapid expansion and disruptive technology, one can only adapt, innovate, or phase out progressively. In addition, a potential lifeline would be for local telecommunication companies to partner with providers like Starlink. This collaboration would leverage the company’s strength for the benefit of the telcos and society at large. In addition, it would include providing high-speed internet to remote areas where traditional infrastructure cannot, as well as leveraging its direct-to-device technology to improve mobile connectivity.