KENYA : The rift between Telsa-Billionaire Elon Musk's owned Space X satellite Internet Starlink and local Kenyan Internet service Providers is far from over.
Just a few weeks after Kenya's leading Telco, Safaricom PLC lodged a complaint with the Communications Authority against the American entity's entry into the East African Country's market, another internet service provider has voiced concern.
Elon Musk's Starlink is facing accusations of predatory pricing, with Jamii Telecommunications Limited (JTL), the country's second-largest internet provider, requesting a regulatory investigation into the company's pricing strategy.
The controversy centers around Starlink's significantly low pricing of Sh1,300 per month for 50GB - compared to its US price of $120 (Sh15,504) - and the reduction of equipment costs from Sh89,000 to Sh45,500, which competitors argue is unsustainable and designed to eliminate competition in the Kenyan market.
Since entering the Kenyan market in July 2023, STARLINK has captured 0.5% market share with 8,063 users, while operating in over 100 countries globally, including 14 in Africa.
The company has faced similar accusations in other markets, notably experiencing controversy in Nigeria where it attempted to raise prices by 97.3% citing inflation, before suspending the increase amid regulatory discussions.
The dispute has now drawn in the Competition Authority of Kenya (CAK) and the Communications Authority of Kenya (CA), with major telecoms providers including Safaricom and Airtel Kenya joining JTL in raising concerns about Starlink's operations and pricing strategies.
The Communications Authority of Kenya (CA) is seeking assistance from the UN's International Telecommunication Union (ITU) to develop regulations for satellite internet providers like Elon Musk's Starlink, amid growing concerns over fair competition and regulatory challenges.
The cross-border nature of Starlink's operations, which uses over 6,400 active satellites to provide low-latency broadband, has created a regulatory "conundrum" that requires global coordination on issues including spectrum allocation, space debris management, data privacy and cross-border compliance.
The regulatory push comes as Safaricom and other local telecoms protest Starlink's operations, with Safaricom urging regulators to require satellite providers to partner with local mobile operators and citing security risks.
While Starlink currently operates under a temporary one-year license from June 8, 2023, offering services at Sh1,300 per month compared to $120 in the US, its entry has faced mixed reactions across Africa
Starlink's entry into Kenya's market has sparked a timely discussion on affordability and inclusivity of internet offerings, exposing inefficiencies in traditional pricing models.
While established providers raise concerns about regulatory imbalances and sustainability, the focus should remain on addressing persistently high internet costs that have survived even major infrastructure investments like the TEAMS undersea cable. SMEs and consumers—key drivers of Kenya's economy—stand to gain from the competitive pricing and expanded access necessary for innovation and growth.
Their satellite-based approach demonstrates how technology can disrupt traditional infrastructure limitations, delivering competitive services at lower prices.
Its 50GB package at KES 1,300 ($10) starkly contrasts with the KES 3,000 ($23) average from local ISPs. This monthly savings of KES 1,700 ($13) represents nearly 10% of the average urban household's disposable income, making internet access significantly more attainable for many Kenyans.
The pricing disparity puts necessary pressure on incumbents to rethink their value propositions.
This disruption could be the catalyst needed to finally deliver on the promise of affordable internet access, fostering innovation and economic growth.
While concerns about long-term market sustainability warrant consideration, dismissing Starlink's move solely as predatory ignores the potential benefits of shaking up a stagnant and overpriced market.
Starlink's entry presents an opportunity to reimagine Kenya's internet landscape, enabling critical developments in digital commerce, remote education, and telemedicine while fostering a new generation of tech entrepreneurs previously constrained by connectivity costs.
Elsewhere, Starlink has temporarily suspended new residential orders across Nigeria pending regulatory approval from the Nigerian Communications Commission (NCC) for proposed price adjustments.
The company, which launched in Nigeria in January 2023, seeks to increase its monthly subscription fee by 97% from ₦38,000 to ₦75,000 and hardware costs by 34% from ₦440,000 to ₦590,000, citing "excessive inflation."
While residential plans are suspended, the business plan remains available at ₦159,000 monthly.
The situation has sparked controversy in Nigeria's telecommunications sector, with local operators accusing the NCC of double standards, claiming their requests for price adjustments have been denied for years.
The NCC has responded by stating that Starlink's actions violate Sections 108 and 111 of the Nigerian Communications Act, 2003, and the company's licensing conditions, leading to its suspension.
Starlink's challenges in Nigeria come amid high demand for its services across Africa, exemplified by sold-out terminals in Harare, Zimbabwe, less than two months after launching there. Earlier this year, the company had already faced capacity issues in five major Nigerian cities, leading to service restrictions in urban centers like Lagos, Abuja, and Port Harcourt.
Starlink has cautioned that its ability to continue delivering high-speed internet in Nigeria is dependent on receiving the necessary approvals.