Safaricom has opened a battlefront with US billionaire Elon Musk’s Starlink after asking the government to reconsider its decision to grant licences to satellite internet providers.
The telco asked the Communications Authority of Kenya (CA) to review 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 American company, backed by the world’s richest person 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 satellite operators to partner with existing internet service providers instead of companies like Starlink setting up shop as standalone operations, arguing that their direct entry into the market poses a threat to mobile network quality.
“Safaricom kindly requests the Communications Authority of Kenya to carefully assess the risks of granting independent licences to Satellite service providers and the consequent harm it may cause to Kenya,” Safaricom said in a letter to CA 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,” Safaricom added 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 the operating licence is given to the existing mobile network operators (MNOs).
“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,” Waithaka said in the letter dated July 5, 2024.
Mr Mugonyi and Starlink did not immediately respond to requests for comment on the Safaricom letter.
The Communications Authority has granted satellite landing rights to 10 companies.
Starlink’s entry into the Kenyan market has intensified competition with local players, especially for the far-flung areas yet to be served by conventional terrestrial technology.
CA data shows that satellite internet subscriptions reached 4,808 in March, up from 2,933 in December – an increase of 1,875 new users or 63.92 percent.
This month, Starlink introduced a rental plan for its equipment, allowing Kenyans to rent the equipment at a monthly rate of Sh1,950 on top of the Sh1,300 charge for the company’s 50 gigabytes (GB) data plan or the Sh6,500 monthly fee for its unlimited package.
Users will have to part with Sh45,500 without the rental option to buy the hardware kit.
Kenya is one of the few countries in Africa to have approved Starlink. Others include Nigeria, Rwanda, Mozambique, Malawi, Zambia, Benin and Eswatini.
However, Starlink’s entry into Africa has faced numerous regulatory obstacles in some countries. Several African markets have classified Starlink as ‘illegal’ within their territories. These include Cameroon, Ivory Coast, South Africa, Senegal and the Democratic Republic of Congo.
Earlier this year, Cameroon ordered the seizure of Starlink equipment at ports because the provider was unlicensed.
Part of the concern of governments in Africa is the need to control the content that is shared on Starlink.
In the case of South Africa, Musk’s country of birth, Starlink was denied a licence after failing to meet a requirement to give locals a 30 percent stake.
In April, the Wall Street Journal reported the existence of a black market for Starlink user terminals, even used by terrorists in Sudan.
Kenya’s fixed internet is dominated by Safaricom with a 37.4 percent market share, according to the latest data from the regulator.
The telecoms giant is followed by JTL with a 22.6 percent market share, Zuku (18.8 percent) and Poa Internet Kenya (13 percent).
Demand for the internet in Kenya has soared as its use extends beyond entertainment to work-related activities.
A study by the International Telecommunications Union (ITU) puts Kenya’s internet connectivity at 29 percent by the end of 2023, below the global average of 65 percent. Kenya’s internet connectivity lags behind Djibouti’s 69 percent.
However, a combination of a favourable policy environment and higher incomes has helped Kenyans pay less for mobile data than their peers in the region, according to another World Bank report.
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 surveyed and an indicator of the country’s economic strength in the region.
President William Ruto’s Digital Superhighway project, which has been approved by cabinet, will prioritise the expansion of fibre network coverage across the country.
