SPacX’s satellite internet service Starlink is cutting prices in Nigeria to attract more customers. The cost of its kit has been reduced by 20%, from ₦378,000 ($378) to ₦299,000 ($299). Additionally, the company has collaborated with Jumia, the leading e-commerce platform in Nigeria. According to the Wall Street Journal, Starlink targeted $12 billion in revenue in 2022, but only made $1.4 billion.
In 2023, Star link ventured into Africa with the ambition of bringing high-speed Internet to its remote regions. With a download capacity of 100 Mbps, the service offers speeds almost ten times the average mobile Internet speed in sub-Saharan Africa, a region where access to broadband is limited. However, despite its immense potential for African demographics, cost and regulatory issues have hampered its widespread acceptance.
Starlink has faced difficulties establishing its presence in the Nigerian market due to the high cost of its kit, making it unaffordable for a significant portion of the population. As Nigeria struggles with low internet speeds, affecting around 70% of its residents and dropping to an average of 10.9% in 2023, Starlink’s prices remain prohibitive. Even after offering a 20% discount, it remains out of reach for many, especially since Nigeria’s typical monthly income is less than ₦124,000 ($124).
Besides pricing challenges, Starlink has also encountered unexpected regulatory hurdles in Africa. For example, the South African government banned the importation, sale and use of Starlink, but many South Africans have found ways to circumvent these regulations. Zimbabwe and Botswana have expressed concerns about Starlink operating without the necessary licenses, especially since it intends to launch there by the third quarter of 2023. Additionally, during a In a recent incident, Senegalese authorities arrested five people for distributing Starlink equipment without the proper permits.
Rwanda has leveraged the Starlink service to strengthen education. In July, Paula Ingabire, the national ICT minister, unveiled the introduction of Starlink in 50 educational institutions aimed at enriching students’ internet learning experiences. There are plans to expand this to 500 schools by the end of 2024.
Starlink has collaborated with e-commerce giant Jumia to manage sales and distribution of their kits across Africa. Given Jumia’s stature as a leading e-commerce platform in the region, with 3.1 million active users per quarter, it is the exclusive distributor of Starlink in Africa. Hisham El Gabry, Chief Commercial Officer of Jumia, is confident in their ability to navigate the nuances of the African retail and merchandise sector.
“He revealed to Bloomberg that the company would begin sales in Nigeria this month through its websites and representatives, followed by Kenya. Currently, the company is only licensed to operate in Nigeria, Mauritius, Mozambique, Sierra Leone, Rwanda and Kenya. They plan to expand to other African countries by the end of the year.