Mobile network operators (MNOs) and Internet service providers (ISPs) have expressed their readiness for the impending competition, even though they agreed that Nigeria’s telecommunications sector would be very competitive this year, especially with the arrival of Elon Musk’s Starlink Space X for broadband services.
In December of last year, the Nigerian government announced that it had authorized Starlink’s request to operate as a High Throughput Satellite (HTS) Low-Earth Orbit (LEO) Operator in the nation’s telecom sector.
“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 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.
The announcement caused anxiety in some parts of the sector, with some analysts claiming that Starlink will drive some of the present operators out of the market given Musk’s financial resources and the high level of service the brand is recognized for globally.
However, telecoms providers who talked with The Guardian claimed that the Nigerian telecommunications market is large enough to support additional participants. They brushed down suggestions that Musk would drive them off the market.
An experienced executive from a telecoms company who wished to remain anonymous explained a key aspect of the situation as follows: “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 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 is set up costs; device penetration costs, among others.”
In a previous conversation, Biodun Omoniyi, Group Managing Director/Chief Executive Officer of Nigerian ISP operator VDT Communications, claimed there is a manner that a powerful global provider may energize a market like never before. In terms of service quality and cost, he asserted that Starlink would have a substantial competitive impact on the industry’s ISP subsector.
Omoniyi asserted that there is a sizable market for everyone but added that Nigeria is still a land where high-quality broadband service is hard to come by. He emphasized that given its size, population, and level of Internet penetration, Nigeria is the most significant and alluring Internet market in Africa.
The VDT boss said Starlink, being a satellite and fixed broadband offering, “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 highbrow homes and offices.”
The setup hardware costs $600, which, at the current black market exchange rate of N730 to $1, translates to N438.000 for Nigerians interested in the service. Meanwhile, reports claim that Starlink must have spent between $5 billion and $10 billion in its attempt to reach 5% of the world’s population.
Additionally, the monthly fee for Starlink’s service in Nigeria would be $43, or roughly N31,000. As it gets ready to launch this year, the business said Nigerians may pre-order the $600 hardware.
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