Cheaper data coming

New satellite internet roll-out offer faster speeds

SPECIAL REPORT | BIRD AGENCY | Africa’s data market is experiencing a reset, with the aggressive rollout of satellite internet and intense competition promising faster and cheaper services, including markets with some of the world’s most expensive data plans.

A year after the introduction of commercial-scale satellite internet by Elon Musk’s Starlink in Africa, significant developments are beginning to reshape the continent’s internet landscape, with cheaper and faster internet increasingly available in Africa as satellite infrastructure rollouts expand and competition among providers intensifies.

In May, Liquid Intelligent Technologies, a major internet player with a presence in 14 countries in Africa, partnered with OneWeb to expand internet access to remote areas promising to offer better connectivity, using both low Earth orbit and traditional satellites.

“This strategic move anticipates the expected surge in new LEO satellite constellations over the next three years, providing agile and cost-effective solutions for entering and expanding markets,” said Liquid Intelligent Technologies Chief Executive Officer, Ahmed El Beheiry, at the time.

Direct competition between foreign satellite internet providers, regional and domestic fiber and mobile network operators (MNO’s) is shaking up of local internet service provision as well as driving strategic partnerships between satellite internet providers and Mobile Network Operators (MNOs) for mobile satellite data provision.

Despite these intertwined competitions and collaborations, providers share a common goal: to improve internet access by offering high-speed and cheaper data to customers.

According to an International Telecommunication Union surveys, Africans pay more than three times the global median price for mobile broadband services and more than five times the global median price for fixed broadband.

African countries with some of the most expensive data plans in the world are currently witnessing most of these developments as more foreign satellite internet providers gain a footing through strategic partnerships with local Internet service providers.

Strategic partnerships

British firm, Eutelsat OneWeb, which forms part of the French Eutelsat Group and runs a network of low Earth orbit satellites has been making inroads into Africa by expanding satellite infrastructure and bolstering capacities of local internet service providers.

Zimbabwe, Zambia, South Sudan, Botswana, DR Congo, Rwanda, Mauritius are among countries that will benefit from anticipated cheaper data costs. Liquid Intelligent also has a presence in South Africa, Nigeria and Kenya.

In early July, Zimbabwe government-owned, telecom service provider, TelOne entered a strategic partnership to leverage OneWeb’s satellites through a reseller arrangement to offer high-speed internet to its customers at lower market prices.

“We will introduce flexible pricing models to remain competitive. If we need to give discounts on certain products, we will do so, so that we remain in the game,” local media outlet Newsday quoted TelOne Chief Executive Officer, Lawrence Nkala.

The decision came barely a month after the announcement of Starlink’s projected third-quarter 2024 launch in Zimbabwe.

According to UK-based price comparison website cable.co.uk, as of September 2023, Africa is home to some of the ten most expensive internet data offerings in the world.

Zimbabwe has been listed as the most expensive in the world with, with a price of US$43.75, for 1 GB of data, followed by Saint Helena (US$ 40.13), South Sudan (US$23.70), the Central African Republic (US$ 10.90) and Zambia (US$ 8.01).

In the region, average cost of 1GB is US$3.31 which is higher than global average of of US$2.59.

Since 2019, prices per 1GB have dropped significantly, however. Prices in Zambia dropped by 256%, in Central Africa Republic by 80.6% and in Sudan by 71.6%

Northern Africa is the cheapest region in the world overall, according to the report with average cost of 1GB at US$ 0.86. All countries in this region are cheaper than the global average.

While Elon Musk’s Starlink has been saddled by regulatory hurdles to make inroads in a number of African countries, it has also been shaking up markets where data prices are cheaper on the continent.

In Kenya, Starlink has introduced a 50GB monthly data plan priced at US$10 (Ksh 1,300) compared to Airtel Kenya’s US$23.4 (Ksh 3,000) and Safaricom’s US$19.5 (Ksh 2,500) for a 45GB plan.

“Affordable, high speed internet with 50GB of data included for Ksh 1,300/mo (opt in for additional data at Ksh 20/GB,” Starlink offered on its website.

The US$0.15 (Ksh 20/GB ) plan is lower than North Africa’s US$ 0.86 average, reflecting the positive impact of satellite internet in the Kenyan market.

Starlink also allows Kenyan users to pay for the data plans via mobile money services offered by Airtel and Safaricom.

The only competitive advantage the MNO’s have is the relatively high cost of acquiring hardware for the satellite service. While the MNOs’ satellite service will ride on existing registered sim cards, one requires Ksh 45,500 to install Starlink hardware.

The Communications Authority of Kenya’s Sector Statistics Report Q3 FY 2023-24 show the number of 100Mbps to 1GBps users – the highest speed range for internet data in Kenya stood at 4,504 by March 2024 – has increased to the the highest ever since since the launch of Starlink in July 2023.

“The utilized satellite capacity increased remarkably following the launch of Starlink’s high-speed, low-latency satellite Internet in the country,” according to the report.

The regulator’s data showed that between December 2023 to March 2024, Kenya’s Satellite bandwidth grew from 0.44GBps to 48.4GBps.

Starlink’s significant success in Africa is in Nigeria, where the country’s communication regulator has already ranked it as the third-largest internet service provider by subscriber base.

As of the end of 2023, Starlink had 23,897 active customers in Nigeria, less than a year after its launch in January 2023. This number is closing in on the 27,000 active users of Nigeria’s second-largest provider, FiberOne. The country’s largest and oldest ISP, Spectranet, had 113,869 active customers.

While such competition is hottest in urban centers, MNO’s are collaborating with satellite internet providers to cover remote parts of the continent.

In December 2023, giant telco, MTN announced a multi-partnership arrangement with a number of satellite providers to test standard and direct-to-device satellite services.

MTN makes moves

MTN announced plans to conduct pilots with Lynk Global in Ghana and South Africa, negotiate tests with AST SpaceMobile in Nigeria and South Sudan, and conduct enterprise-focused trials with Starlink in Rwanda and Nigeria.

Similarly, Safaricom and other Africa operators from parent company, Vodacom Group are also eyeing entry into mobile data satellite services through a collaboration with AST SpaceMobile.

The cost of data remains high in Uganda despite a government announcement in August 2023 of a 50% reduction in the cost of Internet connection.

At the time, the government said effective August 2023, the price of the Internet data for government would be cut from $70 to $35 per Mbps per month. The minister said he hoped private Internet Service Providers would equally cut data prices.

The minister said the move completion of the initial phases of the National Data Transmission Backbone Infrastructure project (NBI), which would serve as the primary vehicle for all government data, Internet, and telephony services.

At the time, the regulatory body; the Uganda Communications Commission, had just issued a report indicating that the amount of data consumed by an average Ugandan telecom subscriber per month rose from 1.6 gigabytes (GBs) in December 2022 to 1.7 GBs in March 2023.

The report noted that the rise in data consumption was accompanied by a reduction in expenditure on data by 6% during the same period. According to UCC, this implied that consumers are using more data but spending less to get it.

The quarterly report also said telecommunications networks posted a combined 138.5 million GBs in downloads during the period between January to March 2023, which represented a 9.2 million GB growth in comparison with the 129.3 million GBs recorded at the end of December 2022.

Equally, for the first time, there was a spike in internet traffic inconsistent with the seasonal traffic drops that always occur following the November and December annual traffic peaks, said the report. It attributed this largely to the continued adoption of internet usage by households and businesses of all sizes.

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Source: Conrad Onyango, bird story agency