The launch of Elon Musk’s Starlink in Nigeria has been generating excitement across all strata of Nigerian society.
While President Muhammadu Buhari celebrated the fact that Nigeria is now the first African country and the only one so far to enjoy the service rollout, the Minister of Communications and Digital Economy, Prof. Isa Pantami was excited that Nigeria has now achieved 100% broadband coverage with the operation of Starlink.
Many Nigerians are also delighted at seeing a new player challenging the existing operators. Expectations are high that with Starlink in Nigeria, they would enjoy better internet speed and the price of data would come down as a result of the competition.
However, some factors could force most Nigerians to stay with their mobile operators even though they would have loved to be on Starlink. 3 such factors are:
Forex issue: Even though Starlink’s price of hardware and subscription are now quoted in naira intending customers are to pay in dollars at the point of checkout. With the suspension of international transactions on naira cards by Nigerian banks, it means only a few Nigerians with dollar cards and those using virtual cards can acquire Starlink for now. Even if international transactions on naira cards were still being allowed, it would have been impossible for anyone to purchase Starlink kits with the $20 daily spending limit.
Nigerians are mobile-centric: The Starlink internet hardware is designed to be set up for homes or offices, whereas most Nigerians access the internet on mobile. This means that even if you have Starlink at home or the office, you will still have to subscribe for your mobile for the periods you are out of the office or at home.
This is why in Nigeria today, despite the increasing number of Internet Service Providers (ISPs) offering unlimited data plans, the four mobile operators, MTN, Glo, Airtel, and 9mobile with their capped data plans, still have the highest number of internet subscriptions.
As of December 2022, the 4 mobile operators in Nigeria had a total of 154 million active data subscriptions, while the over 200 ISPs in Nigeria had a total of 204,810 active subscriptions, according to data from the Nigerian Communications Commission (NCC).
The Pricing: As of today, the price of data on mobile is still the cheapest. People can subscribe for daily or weekly data for as low as N100 and N500 respectively. The operators have significantly brought down their costs such that 2.5 gigabytes of data now go for N500, although with 2 days validity. This is not available with an ISP such as Starlink, whose monthly subscription plan goes for N19,260, though unlimited.
Bottomline: These factors notwithstanding, Starlink will still wrestle some customers from the service providers in Nigeria. This is evident in the number of people that are already placing orders for its kits and are ready to ditch their current ISPs.
Businesses and homes will also find succour in Starlink’s service, and likewise people in remote areas where other service providers have failed to deploy infrastructure. But for now, the mass market for internet service provisioning in Nigeria still belongs to mobile operators.