Elon Musk’s Starlink is set to disrupt the ISP market, bringing hope to 25 million Nigerians without internet access

Kings Nwachukwu

Kings Nwachukwu

Following the issuance of operational licenses to Space Exploration Technologies Corp. (SpaceX), which is owned by the world’s richest man, Elon Musk, to operate in Nigeria, there looks to be hope for connectivity for Nigeria’s approximately 114 access gaps (communities without telecoms services).

According to the Nigerian Communications Commission (NCC), the country’s 114 access gaps currently contain almost 25 million Nigerians without access to basic telecommunication services. It’s also worth noting that, in areas where coverage is already available, telecoms services aren’t always up to par.

Furthermore, the arrival of Starlink is projected to bolster the Federal Government’s attempts to reach 70% broadband penetration, covering 90% of the population by 2025, as outlined in the National Broadband Plan 2020-2025.

Analysts have already predicted that the arrival of SpaceX, which will bring Starlink into Nigeria’s $75 billion telecoms industry, will result in a paradigm shift in the country’s telecommunications services.

Starlink is a SpaceX-operated satellite Internet constellation that now provides satellite Internet access to 32 nations across the world. In the United States and other designated sites in the region, there are approximately 69,000 active Starlink customers. On Friday, Musk tweeted @elonmusk that Nigeria and Mozambique had approved Starlink to deliver services.

According to The Guardian, SpaceX has received six different licenses, including an Internet Service Provider (ISP) operational licence, an International Data Access (IDA) operational licence, a Full Gateway Operational licence, a Sales and Installation Major (S&I- Major) licence, a Gateway Earth Station (GES) Network Frequency licence per Gateway the company is planning to build, and a Very Small Aperture Terminal (VSAT) Network Frequency licence.
 
Starlink’s foray into Nigeria’s telecoms market began in May 2021, when a delegation from SpaceX, a company famed for its innovations, paid a visit to the Nigerian Communications Commission in Abuja. The pact, according to The Guardian, was signed in February 2022 in Barcelona, Spain, during the annual Mobile World Congress.
 
Starlink will compete in the market against MTN Nigeria, Glo, Airtel, and 9mobile, as well as other ISPs. This follows a projected $30 billion investment by the American company to expand its service to a number of markets, including Nigeria.
 
Musk had tweeted at the start of the move last year that Starlink is “expecting over 4,200 Starlink satellites in service within 18 months, which is two-thirds of all active satellites of Earth,” making it a force to be reckoned with in the country.
 
According to The Guardian, Lagos, Abuja, and Benin are among the areas named for Starlink’s availability in Nigeria when it launches. In order to cover 5% of the global population, SpaceX is said to have invested between $5 billion and $10 billion.
 
With Starlink rumored to be offering high-speed, low-latency broadband Internet around the world, hope for better telephony services, albeit at a steep cost, may have arrived in Nigeria.
 
However, it was learned that SpaceX had already launched numerous satellites into space and was actively working on launching a low-earth orbiting (LOE) constellation of satellites to deliver low latency, high bandwidth Internet to all corners of the globe, with Nigeria being a critical market.
 
The arrival of Starlink could be a watershed moment for ISPs in the country, which have seen their numbers decline due to alleged economic issues, a lack of innovation, and other factors that have forced many to close their doors.
 
According to NCC data, there were 73 licensed ISPs with 351,817 connected subscribers in the fourth quarter of 2021, with 198,090 active users.
 
VDT Communications, Dimension Data Limited, Hypria Ltd, Layer 3, IpNX Nigeria Ltd, MainOne Cable Limited, Odua Telecoms Ltd, Tizeti Network Ltd, Cyberspace, Spectranet, and others are among the ISPs with only 1,879 Points of Presence (PoP) across the country, according to the NCC.
 
MTN, Airtel, Globacom, and 9mobile, for example, all offer Internet service thanks to their Universal Access Service License (UASL). They have 145 million users at the moment. As of March 2021, MTN had 60 million subscribers, Globacom had 39.7 million, Airtel had 39.3 million, and 9mobile had 5.5 million.
 
As of the first quarter of 2021, there were 80.6 million broadband customers in the country, representing a 42.7 percent penetration rate.
 
On the potential influence of SpaceX on the Nigerian telecoms sector, Olusola Teniola, the National Coordinator of the Alliance for Affordable Internet (A4AI), said satellites are utilized for a variety of purposes, ranging from military to medical difficulties in hard-to-reach locations.
 
In the absence of significant coverage of terrestrial networks, satellite technology was quite prominent in telecoms, according to Teniola, notably from the 1980s to 2008, and before the deployment of further underwater fiber cables off the coast of Lagos.
 
In addition to 5G and fiber, SpaceX, according to the former ATCON CEO, offers another chance to deliver hyper-fast broadband speeds to individuals who can afford to subscribe to the solutions being brought to market.
 
He believes that those who live in the more wealthy areas of the cities will now have more options. “As a result, SpaceX will provide a client migrating from one technology to another at a pricing range that may exclude low-income workers or those struggling to make ends meet on a minimum wage.”
 
SpaceX, like the GSM-CDMA fight, may challenge the 4G and 5G advances on a per-Mbps basis, according to him. “I anticipate a situation in which alternative business models are developed to combine the strengths of each upcoming technology in order to give customer and consumer benefits.” Price will always be the determining factor, with affordability serving as the primary outcome and criterion for acceptance.
 
“According to the Broadband Plan, by 2025, 4G should cover 90% of the population, with a mix of satellite and 5G technologies filling the remaining 10%,” he said.
 
Biodun Omoniyi, the Group Managing Director/CEO of VDT Communications, an ISP operator, said there is a manner that a powerful global provider energises a market like never before, when asked about the readiness of the Nigerian market for such disruption. In terms of service quality and cost, he believes Starlink will have a substantial competitive impact on the ISP sub-sector of the business.
 
Despite the fact that there is enough market for everyone, Omoniyi claims that Nigeria remains a land of scarcity for reliable broadband service, despite the fact that the country is Africa’s most important and appealing Internet market, considering its population, GDP size, and penetration level.
 
“It absolutely would solve some significant gaps that have been gaping all along,” the VDT CEO said of Starlink, which is a satellite and fixed internet package.
 
Given the “entry price point” that “I have read in the news,” he believes the market is looking for “high brow residences and offices.”
 
According to Kalu Aja, a personal finance specialist, Starlink’s entrance in Nigeria means that a child in Ohafia, Abia State, will have the same or faster Internet connection as a youngster in Ikoyi, Lagos.
 
He announced this in a series of tweets outlining the benefits of Elon Musk’s Starlink Internet company moving into Nigeria.
 
“With Starlink’s arrival in Nigeria, a youngster in Ohafia will have the same or quicker internet connection than a kid in Ikoyi,” he explained. A teacher from Ohafia (a local government in Abia State) can return home to open a school (or clinic), connect to the internet, and create local jobs.”
 
He went on to list the benefits of high-speed Internet in alleviating Nigerians’ frequent aches and pains.
 
“From Plateau, a film crew in Jos can film and upload their footage.” A bank in Bama, Borno State, can communicate with banks in Lagos in real time. Students at ABU Zaria can watch high-speed movies from throughout the world. “This is productivity, GDP growth, and wealth generation,” he explained.
 
Kehinde Aluko, another telecoms specialist, stated that the Nigerian government has a National 5G Policy. “With the 5G policy in place and the satellite that we have, our security institution will be able to leverage emerging technologies like Robotics, Artificial Intelligence (AI), Augmented Reality, Virtual Reality, Internet of Things (IoT), and many others to handle security challenges and to facilitate their activities in control of communication, computing, information gathering, intelligence gathering, surveillance, and reconnaissance,” he said.
 
According to him, satellite operations can be easily conducted with broadband from space, and that, with 5G technology arriving almost simultaneously, the telecoms sector will be redefined to a greater extent, particularly in two ways: accelerating economic development and addressing security challenges.

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