Elon Musk announced via a tweet (how else) that the government of Nigeria has approved Starlink as an Internet Service Provider. Let’s understand the implications and what this means for you as an investor.
What is Starlink?
Starlink is high-speed internet access delivered via low earth orbital satellites (LEO).
Why is this a Big Deal?
Starlink solves the problems of access and speed of internet services in Nigeria, especially in rural areas. According to the “Digital 2022 Nigeria” report by Data Reportal internet penetration in Nigeria stands at 51% as of January 2022. Thus, 49% of Nigerians or 104.9 million Nigerians, did not use the internet.
The low uptake is due to the infrastructure deficit in Nigeria. Nigerians get internet access mainly via data sold by GSM companies like MTNN and Airtel Nigeria. There are not enough physical cell phone towers to beam data across Nigeria, especially in the rural areas. 53.4% of Nigerians live in urban centres, and 46.6% live in rural areas.
Speed is a crucial advantage of Starlink. Ookla indicates that the average mobile internet speed via cellular is 17.38Mbps, while fixed internet wireless connection is 10.06Mbps. In contrast, Starlinks’ speed is 104Mbps, ten times as fast. For context, the US FCC defines broadband as having speeds over 25Mbps or more.
With faster internet services, more internet applications can become operational in Nigeria. All commercial trucks, for instance, can be fitted with trackers to provide accurate and timely information on traffic flow to aid road safety and other emergency crews. What about banks? All branches could theoretically be connected online and in real-time to the head office, reducing the transaction time for clearing checks in the economy.
What specific sectors will get a boost?
The big win will be a fall in the data prices in Nigeria. Starlink can be looked at as more “supply”. Even though its target is the underserved internet locations, its speed will make it a viable option for all Nigerians. Many startups in “high speed” Lagos will gladly pay to access speeds over 100Kmps. This new competition introduced by Starlink will see prices falling, which is excellent.
Fast broadband internet access will significantly scale up all sectors in Nigeria but allow me to touch on sectors with significant Public and Private sector intersects.
- Agriculture; This is the mainstay of Nigeria’s economic growth, contributing more than 22% of GDP growth. Nigeria’s vision 2020 agenda seeks the intensive use of satellite imagery to predict weather and or climatic changes that affect agricultural production. Nigeria’s challenge has been operationalizing these initiatives for impact. Nigerian firm, Cellulant for instance, developed the Growth Enhancement Scheme (GES) e-wallet used by about 14.5m farmers in Nigeria to acquire subsidized fertilizers via SMS.
- Cellulant, via its blockchain-based mobile platform Agrikore, seeks to connect its farmers’ database in Nigeria to the agricultural markets. A Starlink power internet service in Nigeria’s food baskets will enable farmers to use smartphones, not just USSD, on solutions like Agrikole to get weather and agricultural pricing data. Commodity exchanges like comX by NGEX will be able to expand the “chain of custody” and verification of commodities from farm to the warehouse, derisking the commodity trades and allowing efficient collateralization.
- Education & Health; According to the United Nations, more than half of the out of school children live in sub-Saharan Africa. 89% of students in sub-Saharan Africa do not have access to an internet connection. This is one problem Starlink can solve.
- By deploying the internet to rural, underserved communities, the Ministry of education can perform remote learning. A maths class can be recorded in a classroom in Abuja and simultaneously beamed across Nigeria to all students on a free to watch educational portal. This is a way to reduce the science teacher deficit in schools artificially. Bridge International Academics, for instance, is a data-driven low-cost school where teachers use tablets and smartphones. Both teachers and pupils are monitored and scored on attendance and performance. This innovative use of data can only happen in fast internet environments; with the Starlink providing access, schools like Bridge can expand and scale-up.
Healthcare, like education can leverage the fast internet to add productivity improvements in Nigeria’s rural health delivery. Rural telemedicine becomes a reality when there is fast, reliable video-capable internet in rural communities. A doctor can sit in Atlanta or Lagos and see patients in rural communities with the assistance of a trained nurse.
Does this mean GSM share prices will fall?
No, instead, I see the entry of Starlink as boosting the fortunes of the services provided by MTNN and Airtel. Both GSM companies now have Mobile Money licenses. Starlink enabling the internet in rural locations across Nigeria will mean that more Nigerians will look at mobile money as a viable and reliable means of savings.
A Starlink device can be set up and receive fast internet in less than 30 mins. The internet connects and enriches communities and reduces the cost of doing business. One critical use of the Starlink enabled internet is that the Federal Government can deploy Starlink to transmit census data and election results from all wards and LGA to the headquarters in Abuja.
The internet is finally here.
nice write up but I think that a very important point was missed out. This could potentially be a game changer in the next general elections coming up in 2023. With starlink coming onboard, the brouhaha about transmission of election results vis-a-vis poor internet penetration in certain parts of the country could finally be resolved.
Very interesting news. Hope that the Nigerian factor will not play any role in Its deployments.
Well thought out
There is no internet services in Nigeria that can cover the whole country, but starlink will do that with ease.
The article does not touch on the elephant in the room, which is the cost. In the US the cost of the start up equipment is circa $599 (NGN360k). while the monthly fees is $110 (N66k). Most upper middle class Nigerians in Lagos, Abuja and PH who could afford this already have fibre to home – particularly in Lagos and Abuja.
It is likely that Starlink will be a niche product catering to small SME’s who make enough money to afford it and some individuals, private sector and government agencies in parts of the country where broadband internet is not readily available.
Then others can use the other internet which price will have to go down as competition becomes stiff.
The article did not touch on the crucial issue of the impact of Starlink on security and law enforcement. I would have thought that the systems in use now for tracking and identification of criminals would be significantly enhanced by the establishment of the Starlink system. It would have been useful for the writer to address this very important issue, unless some kind of usage protocol would exclude security because of human rights issues.
This is indeed a development to the communication sector
One thing is certain, current prices of mobile data will fall. But hopefully it will not take time for the implementation
Introducing starlink in Nigeria will be very good because it will help us in data saving and making people in rural areas to look up the internet with it…….The should try as much as possible to launch it in Nigeria before September….it can also help in making the world a better place to live 🙈🙈
Do we have money for it that’s the question ❓ here
It going to be cheaper and more affordable than the usual data we actually purchase. It more like we are buying more for less.
How did you figure this out? $110 monthly is cheaper, to you?
WHEN IS ELON MONK BRINGING STARLINK TO NIGERIA
Perhaps next year.
This is a welcome development and good news. Starlink entrance is hoped to solve the problem of slow internet speed and low rural internet penetration by the existing service providers. It is also hoped that as more customers sign up, the price would go down and be more affordable to majority of Nigerians
Nigerians will definitely patronize it as long as they are getting the value for the money they paid.
Nigerians will definitely patronize it as long as they are getting the value for the money they paid. It won’t be a problem.