SpaceX Starlink Internet service will be available in several African nations in the second quarter of this year, and the price in Nigeria has been announced—$600 for the “residential” terminal and a monthly fee of $43. Is there a market for Starlink at that price in Nigeria and other Sub-Saharan African nations?

The IMF projects a GDP per capita of $2,580 for Nigeria this year (and $1,900 in Sub-Saharan Africa and $2,260 for Africa overall) so the market for individual consumer accounts will be much smaller than in what the IMF refers to as “advanced economies.” Instead, we will see shared accounts in government and commercial Telecenters, WiFi hot spots, etc. (Some private companies may encounter payment problems since Nigeria currently has a currency conversion ban).

The first Internet Telecenter was a “Cabina Publica” in Lima Peru, providing access to the non-profit Peruvian Scientific Network founded by Jose Soriano. Around the same time, India was offering Internet services at rural Postal Offices and experimenting with “information Shops.” The Telecenter movement grew and was documented in a book by Andy Carvin in 2005, (Coincidentally, Starlink just became available in Peru).

The availability of mobile phones and laptop computers has enabled widespread WiFi access, but some telecenters still exist. For example, the Cuban government operates both fixed telecenters and WiFi access points,

Note that a rural satellite Telecenter can pivot from satellite to terrestrial connectivity if it becomes available and continue operation offering Internet and other services.

Telecenters and hotspots are shared by individual customers, but government and private organizations in rural areas—schools, clinics, local government offices, small businesses, etc. may also use Starlink connections to the Internet. Here is an early example where Starlink is connecting a school and clinic in rural Chile. Organizations or public access facilities may also create multi-terminal and local area networks on their own using Starlink mesh routers or third-party equipment. A multi-user organization that is more complex than a single residential terminal will require professional support. Starlink can also be used for backhaul from mobile towers in remote areas.

I’ve been talking about the residential Starlink offering because that is all that is currently available in Nigeria, but in other nations, SpaceX also offers a business configuration that is faster, comes with a guaranteed service-level agreement, and offers some support. The current business price is much higher—a $2,500 terminal and $500 monthly charge—but SpaceX has adopted an affordable pricing strategy for the residential service and may do the same for the business service. They also offer maritime and mobile services and may one day introduce other configurations.

Starlink will have competitors.

Today they are the only low-Earth orbit (LEO) broadband Internet service provider, but OneWeb, Telesat, Amazon subsidiary Kuiper Systems, and China SatNet all plan to offer LEO broadband and SES offers competing medium Earth orbit connectivity. With the possible exception of China SatNet, none of these companies plans to offer retail residential service—they are designing for, and marketing to multi-user markets such as we are discussing here and have competitive advantages.

For example, Kuiper will have integration with Amazon Web and Ground station services, OneWeb will soon be offering service, and they have technology and distribution partners with experience in developing nations, OneWeb and Telesat are well positioned to offer multi-orbit service through their geostationary orbit partners. SES is already serving potential Starlink customers and has begun launching next-generation mPower satellites. China SatNet will have political and financial advantages in Digital Silk Road nations.

There will also be competition from terrestrial ISPs. Internet customers in Nigeria and sub-Saharan Africa do not have the same expectations as those in wealthier nations. That is illustrated in this table contrasting the United States with the five nations SpaceX expects to serve in the second quarter of this year Nigeria, Mozambique, Angola, Tanzania, and Kenya. Mobile speed is faster than fixed in Africa and slower in the United States, and mobile service costs less in these and other African nations.

If it turns out that a $600 terminal and a $43 monthly charge do not attract enough customers to utilize available capacity, SpaceX will lower prices, as they have done in other nations.

Available capacity is, of course, a moving target. Capacity per user decreases as new users come online and increases as new satellites are launched. Elon Musk claims the capacity of their second-generation “Starship” satellites will be close to ten times that of their current satellites and they are testing second-generation residential terminals which Musk says will cost a lot less.

I began by asking about the market for a $600 terminal for $43 per month service. I don’t have an answer, but I bet the price will have changed within a year or two.

Update Feb 9, 2022:

The experience of Poa Internet in Kenya indicates the viability of a residential Internet market in Africa. Poa CTO Mike Puchol reports that when they deployed ~160 outdoor Wi-Fi hotspots in Kibera, a district of Nairobi, users consumed little data in spite of the price being 10% of the mobile network operator’s rate and when Poa offered 4 Mbps service with no caps over wireless links to residences, average consumption hit ~140 GB/month and is now over 200 GB/mo. People share access, use desktop and laptop computers, and do different things at home than on mobile networks or Wi-Fi hotspots.

Private or community ISPs will be able to provide wireless or wired residential service using Starlink at, say, 4 Mbps as long as there is sufficient capacity in the community. When Sanjay Bhargava was selected to head Starlink in India in late 2021, he gave a presentation in which he stated a rule of thumb of 100 Starlink terminals in 300 square kilometers. Around the same time, three academic researchers published a paper in which they estimated a mean per-user capacity of 24.94 Mbps at a density of 1 user per 10 km^2. Capacity has increased since 2021 as SpaceX has launched more satellites, some with inter-satellite laser links and perhaps greater throughput, and, as noted above, second-generation satellites promise significant capacity increases.