The Potential Impact of Starlink on Kenya’s Existing ISPs and Telcos

Since its launch in Kenya in early 2023, the satellite internet service by SpaceX has marked some notable milestones against Kenya's existing ISP landscape and Telcos. In fact, it is shaking things up for the existing ISPs and Telcos.

The following are some of the impacts:

Competition: Entry of Starlink increased the competition, hence forcing the traditional players in the ISP market-for instance, Safariccom, Jamii, and Zuku-into a position where they are forced to think afresh about their price and service offerings. The Kenyan internet market has been dominated by a relatively small number of players, now, with Starlink's entry into the market with its global reach and potential for widespread coverage, it could introduce a new level of competition not only in pricing but also in terms of the services offered. This development has not gone without notice from competitors, as Safaricom has been actively lobbying the CA to impose stricter regulations on such satellite operators as Starlink.

Safaricom goes on to say that satellite ISPs should not operate independently but in conjunction with local providers for fair competition. In an effort to retain market dominance, Safaricom had upgraded its fibre speeds and introduced new packages seemingly aimed at reducing customer churn, while other ISPs offered discounts and promotional packages to retain users, directly taking on Starlink's competitive pricing model.

Market share: It has rapidly emerged as the 10th largest ISP in Kenya, having captured a market share of 0.5% within the first year.This is impressive growth for something that, until today, would take several years of investment for a traditional ISP to achieve. Forcing the more established players to work a bit harder to hold their market share, the flexibility in the satellite infrastructure enables Starlink to bypass the febre networks in areas where the ground-based infrastructure is poor or simply does not exist. Rural Connectivity: Starlink is particularly fitted for areas where rural connectivity has always been unreliable or completely unavailable. The infrastructure allows the satellite to reach the most remote and underserved regions in cases where traditional players have faced difficulties in setting up infrastructure.

This makes it a game changer for many Kenyans who had limited to no access at all. Value-for-money pricing: Starlink subscription packages are attractive to different categories of subscribers, considering its competitive speeds at affordable rates starting from KES 1,300 per month for speeds up to 200 Mbps. Which is lower than many comparable packages from traditional Nissho often have higher operational costs reflected in their pricing structures. Thus, prompting other providers to reconsider their pricing structure to stay competitive.

Regulatory challenges: the existing ISPs are lobbying for regulations that may restrict Starlinks's operation.Like Safaricom has been leading the way in measures to protect its market leader position, called upon the Communications Authority to view satellite service providers from operating their business independently in Kenya. They said that because of the technology, that allow this kind of operation without any local partnership, could be at the center of any number of regulatory challenges and accountability issues. Safaricom, however, claims the only means through which satellite ISPs can be allowed to operate is by license rights from a local company so it may be subjected to the same local laws. Kituo cha Sheria has filled its case against Safaricom and CA, on the basis that the curtailment of Starlink's operation would in effect reduce Kenyans' access to affordable internet. It also highlighted the need for increased competition in the market, which would have the salutary effect of driving down the prices that consumers are called upon to pay and improve the quality of the services that the consumers would enjoy. Kituo cha Sheria is convinced that the right of access to the internet is part of the socio-economic rights of all Kenyans. 

Mobile connectivity and the growth of broadband: Increasing mobile broadband adoption has laid the ground for ever-increasing internet demand in Kenya. In June 2024, subscriptions to mobile broadband were at 38.5 million, while expansion into 4G and early 5G networks supported this. This mobile-first environment gives ground to ISPs, such as Starlink, to tap into high demand for internet services at both individual and business levels.

The role of Starlink

Conversely, Starlink is not an addition of another ISP but rather a marked shift in the incremental nature of the Kenyan internet market, with high-speed and low-latency satellite internet, Starlink is better equipped to serve areas that fibre and mobile phone networks have previously underserved.

The CA concurs with the change in stating that the ease of deployment and scalability of satellite internet presents it as a suitable option for the extension of broadband access into the under-served areas. This development also aligns with the government's broad objective of achieving increased digital inclusion, where every citizen is expected to have access to reliable internet.

In conclusion The expansion by Starlink in Kenya marks a pivotal moment in the digital landscape of the country. The fact that the firm can manage to achieve a 0.5% market share within one year underscores an increasing demand for high-speed internet. While challenges are at hand, such as regulatory hurdles and fierce competition from local ISPs, this is what will make Starlink, with its value proposition, a glimpse into what the future of internet connectivity could look like.

By offering reasonably priced packages, high speeds, and focusing on serving under-served areas, Starlink was among those projects that might continue changing how internet access has been delivered in Kenya. Currently, the internet market in Kenya stands at a crossroads where satellite technology, mobile broadband, and fiber networks will be employed in a cooperative manner to meet the growing demand. With the competition growing, consumers are expected to get better prices and services.