daniel chigunwe
Nelson Gahadza
To license or not to license Starlink was a debate that raged in the country for months. There were pros and cons that experts and non-experts pushed in support of whether the Low Earth Orbit (LEO) satellite operator owned by SpaceX and led by American billionaire Elon Musk should be licensed in the country.
As the debate raged, some individuals and companies were arrested and fined for illegal possession of Starlink devices at a time when the service provider was not yet licensed in Zimbabwe.
But all that debate was put to rest when President Mnangagwa shared on his social media account last Saturday, that he had approved the licensing of Starlink by POTRAZ, the country’s telecommunications regulator, to provide advanced internet and related digital processing services in Zimbabwe.
He underscored the importance of technology in daily activities, emphasizing the government’s commitment to promoting investment in the sector.
Starlink is expected to deploy high-speed, low-cost internet infrastructure across Zimbabwe.
However, the internet space already has existing players providing the services through underground data cables and base stations.
According to the Potraz third-quarter 2023 Zimbabwe Telecoms Industry report, there are five internet access providers, namely Liquid Telecoms, accounting for 69 percent of the market, followed by TelOne at 28.05 percent, and Powertel at a distant 1.3 percent. Dandemutande and Telecontract account for 0.9 percent and 0.2 percent of the market, respectively.
In the mobile internet services, Econet accounts for 72 percent, NetOne at 27.9 percent, and Telecel at 0.1 percent.
The internet penetration rate according to Potraz, has been on an upward trajectory in recent years due to an increase in internet adoption necessitated by the movement away from voice-centric services to data-centric services.
Mobile internet and data traffic increased by 6.2 percent to record 44.67 petabytes in the third quarter of 2023, up from 42.06 petabytes recorded in the second quarter of 2023.
The entry of Starlink will be disruptive to the current market setup due to its competitive tariffs and high internet speed efficiency.
Currently, in Zimbabwe, Econet is the only mobile network operator with 5G network infrastructure, while other providers are lagging in the deployment of next-generation technologies.
Starlink’s website says, “Starlink users typically experience download speeds between 25 and 220Mbps, with a majority of users experiencing speeds over 100Mbps.”
An industry player who requested anonymity confirmed to Business Weekly that the coming of Starlink will disrupt the current operations or business models.
“This will largely affect the internet service providers, internet access providers, and organizations that are pushing the internet to the consumer and enterprise, including the government.
“The impact to the existing licensed operators is that they’ll suffer competition, they’ll lose market share and revenues will go down. There will be shedding of staff to limit the exposure.
That is inevitable, it’s going to happen,” said the executive.
The executive said Starlink is pushing very competitive pricing for internet access and with a significantly good throughput in terms of speed.
“So players are likely to suffer from Starlink, particularly the fixed internet service providers (ISPs) who supply wired infrastructure services to the customer like fiber, copper-based solutions, and also fixed wireless access solutions like Long Term Evolution (LTE) products that are pushed through to homes.”
The industry player noted that Starlink’s approach is more consumer-centric, so the consumer market would grab onto this, and there will be a swap out of current services from ISPs, fixed telcos, to satellite-based solutions.
The executive, however, said the narrative around the rural-urban digital divide and the stories about bridging the digital divide and so on are not entirely accurate.
“I don’t think it will sell because these people need to buy devices that are expensive. I don’t think the rural community will be able to purchase if not assisted by the government. So I see advantages to rural schools, clinics, where the physical fibre infrastructure will be difficult to reach.”
Enock Rukarwa, an investment analyst, told Business Weekly that the introduction of Starlink is a welcome development in Zimbabwe as it ensures improved internet connectivity and economic development by impacting related value chains in the economy.
“Data affordability and intermittent connectivity have been the major challenges within our telecommunications value chain, and the coming in [of] a new player should be able to push prices lower and enhance product quality,” he said.
In terms of price comparison, Starlink’s monthly data costs are: 50 mbps (US$38), 100 mbps (US$45), and 1000 mbps (US$85).
This compares to Telone’s 25 mbps which costs [cost] US$600, Liquid Telecom’s 10 mbps for US$621, and Dandemutande’s 20 mbps at US$275. However, these prices could be linked to the infrastructure and cable investments made by these companies towards providing the service.
Liquid Telecom has over the years invested over US$500 million in broadband infrastructure, while Telone has invested at least US$20 million in the network. Starlink utilizes a constellation of satellites in low Earth orbit (LEO).
The Starlink Standard Kit costs $599, and the Flat High Performance Kit costs $2,500. Rukarwa said the deployment and maintenance of Starlink’s ground infrastructure will be a key enabler for job creation in the economy.
Another industry expert said mobile network operators (MNOs) will benefit in a big way as this will be an alternative backhaul connectivity between base stations. He said there are many areas where fiber cannot be deployed, and for ISPs in some cases it can mean competition.
ICT expert Jacob Mutisi told our sister publication, the Chronicle, that the entry of Starlink and other satellite-based internet services has the potential to significantly impact local mobile and telecommunications service providers in several ways.
He said Starlink’s global coverage and high-speed connectivity can directly compete with traditional broadband and mobile internet services offered by local providers.
“This increased competition may force local providers to improve their services, lower prices, or develop new offerings to stay competitive,” he said.
He noted that Starlink’s satellite-based network reduces the need for extensive local infrastructure, such as cell towers and fiber optic cables, to provide internet access, and this may diminish the importance and revenue streams for local telecom companies that have traditionally relied on building and maintaining this infrastructure.
“As Starlink and other satellite internet providers gain market share, local providers may need to adapt their business models, technologies, and service offerings to remain relevant and cater to changing customer needs,” he said.
Botswana became the latest southern African country to license Starlink following Zimbabwe’s approval. Starlink is already operational in various African nations, including Nigeria, Mozambique, Zambia, Kenya, and Malawi.
Batanai Matsika, an analyst, said Starlink is a disruptive player simply because it provides access and is very competitive.
“So definitely, it disrupts existing operator’s markets as it will bring a lot of competition, but it’s positive for the economy simply because it results in improved access and good-quality services,” he said.
Economist Brains Muchemwa recently said the resultant effect of Starlink’s entry onto the scene was that of lower tariffs.
“Starlink’s competitive prices will shake a sector that has been reaping huge oligopolistic profits, with the resultant effect being long-term lower prices of data across the wider market spectrum,” he said.
Potraz director general Dr Gift Machengete said last month that the regulator had received an application for a license from Starlink to operate in the country. He noted that the regulator was seized with the matter and working on the modalities for the licensing.
Mutisi said Starlink’s focus on providing internet access to underserved and remote areas may pose a particular challenge for local providers that have traditionally struggled to serve these regions profitably.
He said this could result in a shift in market share as customers in these areas migrate to Starlink or other satellite-based services.
Another expert said satellite technology, if undersubscribed, will push good speeds, “but when they are over-subscribed, the speeds that are promised and the throughput that are promised will then degrade because of many people now subscribing.”
Bongani Ndlovu