New satellite technology puts telecom firms on notice
STARLINK, a subsidiary of the Elon Musk-controlled SpaceX, has already “expressed interest in offering services in Zimbabwe”, according to the Postal Telecommunications Regulatory Authority of Zimbabwe (Potraz), and this has put the telecommunications industry on notice.
Experts say it is not so much about Starlink the company but the technology, which thrives on a constellation of advanced low-orbit satellites that make it possible for the internet to reach any part of the world.
And providing such a ubiquitous service at an affordable price is likely going to be hugely disruptive to the telecommunications sector as we currently know it.
The technology is already here.
Late last year, China, for example, announced that it had completed the initial setup of its first high-orbit satellite communication network, which is expected to provide a satellite internet service within its borders and beyond.
What is ominous for the telecommunications industry is that the Asian giant last year became the first country to offer smartphones with satellite-calling features when Huawei launched a 5G phone linked to similar high-orbit satellites.
It becomes an existential battle for mobile network operators (MNOs) and internet service providers (ISPs).
While Starlink has expressed interest to invest in Zimbabwe, it is yet to apply for a licence.
“On the issue of Starlink, the authority wants to categorically state that it is not blocking Starlink in any way,” said Potraz director-general Dr Gift Muchengete recently.
“They have expressed interest in offering services in Zimbabwe and have been provided with all the relevant information to facilitate their application. However, they have not yet applied for a licence.
“As long as they operate without a licence, their services in Zimbabwe are considered illegal.”
The allure of Starlink technology
The allure of the new technology is in its ability to provide universal connectivity at affordable prices, as well as unlimited data, seamless self-installation and high internet speeds.
This is likely to leave telecommunications companies in a lurch, as they usually need huge resources to deploy infrastructure to underserviced and unserved communities.
The cost of setting up a base station is estimated to hover between US$400 000 to US$500 000.
Econet, the country’s biggest mobile telephone company, currently has 5 700 base stations, which is more than half the industry total of 10 598.
Conversely, the Starlink hardware costs an estimated US$600, while subscriptions average US$50 per month.
However, this fee affords subscribers unlimited internet that has download speeds of above 100 megabits per second (Mbps).
It is believed that the cheapest unlimited internet service one can get in Zimbabwe costs about US$240 — US$190 more than Starlink’s — but the speeds are roughly a fifth of what the American company is able to provide.
So, there is no conceivable way local companies could withstand the competition that comes with the new technology.
Zimbabwe has long grappled with sluggish and exorbitant local internet services.
But are Zimbabwe’s internet prices extortionate?
Currently, one gigabyte (GB) of data averages US$3,54, compared to an average of US$1,81 in South Africa, US$1,26 in Eswatini, US$0,78 in Mozambique and US$0,38 in Malawi, according to the Worldwide Mobile Data Pricing 2023 report by Cable.co.uk.
But local telecommunications company TelOne believes its data prices are “uneconomic” — declining to US$6,57 for 10GB as at December 2023, from US$13 for 10GB in April 2023 — due to the depreciation of the Zimbabwe dollar against the green- back.
With regard to pricing, however, the lack of smaller, affordable packages could work against Starlink.
Soaring demand
Overall, the value proposition that Starlink provides has made its internet provision one of the most sought-after services locally, regardless of its licensing status.
In Zimbabwe ISPs must be licensed by Potraz, according to the dictates of the Postal and Telecommunications Act (Chapter 12:05).
However, with the service going live in neighbouring Mozambique in June 2023, locals can easily access it by purchasing Starlink Roaming from Maputo.
In South Africa, it remains banned over non-compliance with the country’s broadbased black economic empowerment requirements.
And earlier in February, Botswana rejected Starlink’s application to provide services in the country, indicating that it had fallen short of statutory requirements.
Further, in December last year, Ghana’s National Communications Authority (NCA)
warned against the illegal sale and use of Starlink equipment.
“Any entity which provides electronic communication services in Ghana without a licence or authorisation from the NCA is in direct violation of Section 3(1) of the Electronic Communications Act 2008, Act 775, which states that, ‘Except as otherwise provided under this Act a person shall not operate a public electronic communications service or network or provide a voice telephony service without a licence granted by the Authority’.”
So, while Starlink had spread its tentacles to more than 71 countries around the world by January this year, the service has not quite received red-carpet treatment in all jurisdictions.
A threat to local ISPs, MNOs
But if Starlink manages to meet the regulatory requirements, it might be licensed, sooner or later, in Zimbabwe.
This raises a key existential question for the local ISPs and telecommunications companies: Will they survive the inexorable disruption?
But how competitive are local service providers?
The Speedtest Global Index showed that in December 2023, Zimbabwe had an average download speed of 27.39Mbps and an average upload speed of 11.71Mbps for mobile internet.
For fixed broadband, the country recorded an average download speed of 14.20Mbps and an average upload speed of 11.01Mbps.
According to international broadband speed checker, broadbandspeedchecker.co.uk, Zimbabwe’s ISPs had an average download speed of 28.83Mbps and an average upload speed of 20.2Mbps as at February 2024.
Meanwhile, Starlink says its users “typically experience download speeds of between 25Mbps and 220Mbps, with a majority of users experiencing speeds of over 100Mbps.
Upload speeds are typically between five Mbps and 20Mbps”.
These numbers show that while local ISPs may lag behind Starlink in download speeds, upload speeds are in range.
Beyond the issue of internet speed, the entrance of a significant player such as Starlink could shrink business for existing players, given the comparatively small size of Zimbabwe’s internet market.
According to the Zimbabwe National Statistics Agency’s 2022 Population Census, the country’s population presently stands at 15,1 million. ◆ Read more on: www.sundaymail.co.zw
The cost of setting up a base station is estimated to hover between US$400 000 to US$500 000 ... Conversely, the Starlink hardware costs an estimated US$600, while subscriptions average US$50 per month.