Is Starlink the solution to Nigeria’s connectivity woes?

“This may just be the fourth industrial revolution happening before our eyes if […] well leveraged,” says Joseph Agunbiade, co-founder of BudgIT, a social tech enterprise that simplifies country budgets and public data and Founder at Univelcity, a tech training institute.

Trading as Starlink Internet Services Nigeria Ltd, the company has received two licences in Nigeria – the International Gateway licence and the Internet service provider (ISP) licence – both through the Nigerian Communications Commission (NCC).

Both licences, which became operational from May 2022, will last for 10 and five years respectively. Both can be renewed after the expiration date.

Despite having a large tech-savvy young population, Nigeria has a broadband penetration deficit of about 60%. A recent report on Africa’s digital economy from Endeavor Nigeria shows that the country’s fixed broadband subscriptions, 4G mobile network coverage and international internet bandwidth rank 102nd, 120th and 130th out of 134 countries.

The question really is whether the problem is one of access or something else

Due to its low latency broadband internet system, Starlink can deliver 150 megabits per second (mbps) internet speeds to any place on the planet, especially the underserved rural areas. 49% (104.9 million) Nigerians don’t have access to the internet.

Distributed talents, concentrated opportunities

Although Nigeria’s mobile internet users have tremendously grown from 39.57 million in 2016 to over 109 million in January 2022, businesses still depend on broadband internet, which is yet to cover most of the country.

A major bottleneck to startups scaling up their business in many parts of the country is slow or unreliable internet connection, given the country’s low broadband internet penetration. Starlink may help consolidate and improve connectivity.

“Starlink, if deployed can level the playing field of access, by allowing people in the remotest places to connect to the internet and the global digital economy at the same or similar speeds as people in urban centres,” says Sanusi Ismaila, CEO of CoLab, a co-creation hub in the north-western city of Kaduna and the pioneer of Kaduna Technology City.

“This can potentially lead to a more distributed ecosystem, with a more diverse set of problems being solved at the same time.” Nigerian startups attracted 60% of a total $1.7bn capital raised by tech startups in Africa in 2021.

Nigeria has over 83,000 developers, the third-highest in Africa. With this talent base, Nigeria boasts of five – Jumia, Interswitch, Opay, Flutterwave and Andela – of the 11 unicorns on the continent. More may be achieved if the country can unlock capacity through broadband.

“Like AfriLab, which built labs in universities for students to learn how to code, the government can partner with Learning Management System [LMS] platforms with courses readily created, make Starlink internet available, pay on behalf of talented Nigerians in rural areas who may not be able to afford the services individually,” says Agunbiade.

Starlink’s internet speed also has the potential to catalyse new services that will be enabled by the new level of connectivity

He believes that if that is well done, this can reduce unemployment (which is at 33%), facilitate the spread of talent who can get jobs overseas and earn forex and deepen the country’s startup business landscape.

Ismaila, however, cautions that we may not see a sudden interest from the government to adopt this method as cheaper alternatives, such as regular routers, already exist. He also argues that satellite technology isn’t necessarily new, as companies like Cool Link have been offering similar services for a while now without any major adoption drive by the government.

He agrees, nonetheless, that Starlink provides a reasonable alternative to bridge the broadband gap, particularly outside urban areas and opens new doors on the technical side of access. “The question really is whether the problem is one of access or something else.”

Productivity in cities

At 40 milliseconds, Lagos’ internet latency, the time it takes the internet to send, receive and process data, is the slowest of Nigeria’s top five cities with the fastest internet speed, according to Tech Cabal. Kano’s 75 milliseconds is more than twice the global average of 37 milliseconds.

Essentially, the internet speed in Lagos is 19.72 Mbps, compared to Johannesburg (55.64), Tunis (31.32), Nairobi (24.60) and Cape Town (36.68).

Aderonke Ajose-Adeyemi, CEO and founder of Losode Inc, a Lagos-based e-Commerce company, tells The Africa Report that because businesses in Lagos have had to contend with unreliable internet connection, many of them subscribe to multiple service providers at once to guarantee consistent connectivity and mitigate productivity losses, but that is not a sustainable solution. She believes that those who can afford Starlink will be happy to no longer have to deal with connectivity issues.

“Starlink’s internet speed also has the potential to catalyse new services that will be enabled by the new level of connectivity. There is obviously still some way to go before we confirm whether or not Starlink can live up to the billing but there are some reasons to be optimistic.”

Priced out

The regular Starlink equipment costs about $599 (about N250,000). Shipping and monthly subscription cost $60 (about N25,000) and $99 (about N41,000) respectively. For the premium service, the complete kit goes for almost $2,500 (over N1m) and the monthly subscription costs about $500 (over N207,000).

“The current pricing will be an obstacle for many and will most likely mean that Starlink will not drive the rural connectivity it is supposed to. With the current economic situation, it is hard to imagine Nigerians adopting the service en masse,” says Ajose-Adeyemi.

“There have been some conversations around the possibility of different pricing for Africa but until that is confirmed, Starlink will be something people admire from afar.”

[…] telcos, because they have existing base stations, leverage Starlink to distribute data to local communities.

Agunbiade also believes that the high pricing may make it difficult for individual users, especially as it relates to building tech talent and businesses across the country. However, it is possible to have dedicated projects like tech hubs or community efforts to deploy Starlink internet where fibre cables are yet to reach, or are old and thus can’t satisfy the high connectivity demands of modern technology or businesses.

He believes this will make people in remote areas of the country connect with the world without having to go to Lagos or Abuja. People wonder what the effect of Starlink’s entry into Nigeria will mean for existing telecommunication companies, especially the internet infrastructure, quality of service and pricing of data. Agunbiade argues that the impact on pricing may not be quick, as Starlink is more likely to be adopted for dedicated projects.

Similarly, when infrastructure improves, people don’t necessarily use less of some if they are still good, what happens is that consumption increases instead. He, therefore, thinks it might be a win-win situation for existing telcos and Starlink, especially if it boosts consumption.

“[…] telcos, because they have existing base stations, leverage Starlink to distribute data to local communities. They can still make gains from their last mile presence or infrastructure,” Agunbiade says.

Beyond business

Apart from tech talent and business incubation, Starlink can be leveraged for other uses or businesses. Elon Musk tweeted last month that one Starlink can provide Internet for an entire school of hundreds of students. This can be very useful in remodelling Nigeria’s education sector and preparing students for the new global tech economy.

Agunbiade also believes that the e-commerce and health sectors will particularly benefit. With telemedicine, people can consult medical professionals from across the country and indeed the world from their local hospitals and not have to travel to major cities.

It will impact businesses we didn’t know existed or ordinarily would not pay attention to

As more rural areas get connected, more farmers or local small businesses can put their products online by themselves and people anywhere in the country can find and transact with them. On the other hand, it may also reduce the need for businesses in urban centres in the country and anywhere in the world to travel to inspect products or raw materials that they seek if local businesspeople can just live stream.

“Imagine what is possible when people in rural communities start [using] Tik Tok,” says Agunbiade. “Essentially, it will impact businesses we didn’t know existed or ordinarily would not pay attention to.”