Safaricom CEO Peter Ndegwa.
Safaricom has opened a battlefront with US billionaire Elon Musk’s Starlink after it asked the government to reconsider its decision to award licences to satellite internet providers.
The telco asked the Communications Authority of Kenya (CA) to re-evaluate its decision to grant independent licences to Satellite service providers, warning that such an arrangement could allow illegal connections and harmful interference to mobile networks.
The number of Kenyans using satellite internet has surged since Starlink, a subsidiary of Musk’s aerospace company SpaceX, entered the Kenyan market in July last year.
The American firm riding on the back of the world's richest persons with a net worth of $237 billion (Sh30.6 trillion) is betting on lowering internet costs in a segment dominated by Safaricom, Jamii Telecommunications Limited (JTL) and Zuku.
But Safaricom wants the satellite operators to partner with existing internet service providers instead of firms like Starlink opening shop as stand-alone operations, arguing that their direct entry to the market poses a danger to 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 CE chief executive officer 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,” added Safaricom in a letter 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 licence 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 in the letter dated July 5, 2024.
Mr Mugonyi, and Starlink did not immediately respond to requests for comment over the Safaricom letter.
The regulator has given satellite landing rights to 10 firms.
Starlink’s entry into the Kenyan market has intensified competition with local players, especially for the far-flung areas that are yet to be served using conventional terrestrial technology.
CA data shows that satellite internet subscriptions hit 4,808 in March, up from 2,933 in December—marking an enrollment of 1,875 new users or an equivalent of 63.92 percent growth.
This month, Starlink introduced a rental plan for its equipment that could see Kenyans lease the kit at a monthly rate of Sh1,950 on top of the Sh1,300 charge for the company’s 50 gigabytes (GB) data plan or Sh6,500 monthly fee for its unlimited package.
Users have to part with Sh45,500 without the rental option to purchase the hardware kit.
Kenya is among the few countries in Africa that have allowed Starlink. Others include Nigeria, Rwanda, Mozambique, Malawi, Zambia, Benin and Eswatini.
Obstacles
But Starlink’s entry in Africa has been met with numerous regulatory obstacles in some countries. Several African markets have classified Starlink as ‘illegal,’ within their territories. They include Cameroon, Cote d’Ivoire, South Africa, Senegal and DRC.
Earlier this year, Cameroon ordered the seizure of Starlink equipment at ports as the provider was not licenced.
Part of the concern by governments in Africa is the need to control the content being shared on Starlink.
In the case of South Africa, Musk’s country of birth, Starlink was denied licence after it failed to comply with the requirement to cede a 30 per cent stake to the locals.
In April, US publication 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 fixed internet is dominated by Safaricom which enjoys a market share of 37.4 per cent respectively, latest data from the regulator shows.
The giant telco is followed by JTL with a market share of 22.6 percent, Zuku (18.8 percent) and Poa Internet Kenya (13 percent).
The demand for the internet in Kenya has surged as its use goes beyond entertainment to work-related activities.
A study by the International Telecommunications Union (ITU) put Kenya’s internet connectivity by the end of 2023 at 29 per cent, which is below the global average of 65 percent. Kenya’s internet connectivity lags that of Djibouti at 69 per cent.
A combination of a conducive policy environment and higher incomes has however helped Kenyans pay less for mobile data compared to their peers in the region, according to another report by the World Bank.
For every Sh100 a typical Kenyan earned in a month last year, they spent less than Sh2 on 2GB of mobile data, the lowest ratio among the 11 countries sampled and an indicator of the country’s economic prowess in the region.
President William Ruto’s Digital Superhighway Project, approved by Cabinet, will prioritise the expansion of fibre network coverage countrywide coverage.
