Competition between Satellite and Fiber Broadband in Kenya: Where does Starlink fit?

According to Uswitch, a satellite broadband is a way where information is beamed all the way from space to a satellite dish that installed, for example in a home. The satellite dish is then hooked up to a Wi-Fi router just like the normal broadband. This broadband technology has a big advantage where it can be used in the rural areas, since it can be provided virtually anywhere in the world, as long as there’s a clear line of sight to the southern sky (or where the satellite will be).

The satellite broadband works in the same way the satellite TVs and radios work, just that you can send or upload data to the satellite. The broadband provider beams laser signals from its base on the earth up to its orbiting satellites. These signals are then sent back down to your property from the satellite and are received by a satellite dish and transmitter which need to have been installed, mostly on a roof. Since they use the laser technology, the signals work on higher frequencies than the standard radio waves, and they are able to send and transmit more data and information, which a great ideal in this broadband technology.

Despite all that, there are some of the factors that affect the quality of service. They include the number of satellites in the orbit (the more they are, the better and the stronger the signal), how far away the satellites are from the dish (the closer the satellites are, the lower the latency), and the transmission technology (the quality of the satellites and devices used to receive signals in sending and receiving data). Another factor that can affect the quality is the weather. The signal that is beamed down to the satellite broadband dish has to travel hundreds and thousands of miles, and thus these signals can get slowed or broken by clouds, storms, snow and even heavy rains. Again, if the satellite dish is covered by snow or dirt, the efficiency of receiving the signals is affected.

The satellite broadband services are on the expensive side compared to the fiber broadband services. As well as paying a monthly package fee, a pay for the installation is required. In terms of speeds, they all vary from provider to provider but modern satellites have been able to offer great speeds though there may be a lot of lags and delay due to the distance of transmission. Latency won’t be a concern for browsing the web, but while playing online video games and calls, as well as streaming, demanding instant reactions. To get better streaming connections, a greater data plan is required for better quality, which makes it more expensive.

According to Money Supermarket, a fiber broadband is a type of connection that offers a faster and more reliable internet connection. Fiber broadband technology uses plastic or glass cables rather than the standard copper wires. Data is transmitted via beams of light, meaning that it travels at light speed and doesn’t slow down over distances. There are two main types of fiber broadband, fiber-to-the-cabinet (FTTC) and the fiber-to-the-premises (FTTP) also known as the fiber-to-the-home (FTTH). FTTC is the most common of the two since it uses fiber cable to the local cabinet in the streets from where copper wires are used to connect it to the homes. This as well offers ‘superfast’ download speeds. Here, an analogue phone line is used to connect the property to the street cabinet, and thus, a phone line is necessary to access the internet. FTTP is mostly for the fiber cables that go directly to the homes. As a result of having the copper out, it can offer more reliable and faster speeds. This doesn’t require a phone line as it doesn’t connect to a home via a copper wiring. Comparing between the two, FTTC is cheaper than FTTP, and is more readily available nationwide. FTTP is obviously more reliable, but at an extra expense.

According to The Star news on September 2024, Safaricom has been the leading Kenya’s telecommunications provider. The company has been increasing the internet speeds for homes and businesses so that businesses may meet the growing needs of the individual and enterprise customers. The internet service provider has been using the fiber broadband technology, that is not available in some of the areas of the country, and lately, they have introduced the new ultra-fast Home Fiber Platinum plan with speeds of up to 1 Gigabit per second.

Despite now Safaricom being the leading local internet service providers, they have been faced with a competitor in the field of the internet provision services. The new competitor, Starlink, which uses the satellite broadband technology, which is based in America has brought rivalry over the dominance of the Kenyan internet market, bringing on a new twist. 

According to Pulse Live, Starlink has moved in with great reception from Kenyans who continue to warm up to its competitive packages and faster internet speeds. The entry of the competitor rattled Safaricom who responded by writing to the Communications Authority of Kenya (CA), asking for a reconsideration in its decision to grant licenses to the satellite providers in the country. Pulse Live also states that the Safaricom’s Chief Executive Officer (CEO), Peter Ndegwa, didn’t write the letter so as to imply fear of the competition, but rather was aligned in public participation which is enshrined in the Constitution since they are not the regulators. According to an address that was made by President Ruto on 27th September 2024 at New York (on the sidelines of the United Nations General Assembly (UNGA)) during the US-Kenya Business and Investment Roundtable discussion, he stated that he had been encouraging Peter, Safaricom CEO, that the competition makes one to keep ahead and he acknowledged that the CEO had really upped his game towards it.

According to the Pulse Live news, Peter Ndegwa, who was at an interview with Bloomberg, stated that he wasn’t really getting in the way of Starlink, but he noted that it is effective in providing internet to areas where the fiber-based technology is not available. Here, he stated that a partnership with Starlink would be for the benefit of consumers and Starlink would indeed complement the local technology thus improving the quality of the services to the customers. He also stated that the local internet provider has no ability to prevent anyone from operating in Kenya, as it is a regulatory decision.

According to The Star news, Elon Musk, the founder of Starlink and a billionaire businessman, who was in attendance at the UNGA concurred with what President Ruto had said and added that Starlink is there so as to cause the local competitors to provide better services. This makes it even more competitive to the local internet providers.

Having that Safaricom, the leading local internet service provider has agreed on collaborating with the satellite internet service provider, Starlink (as per the CEOs briefing), gives the American-based provider a greater competitive advantage edging it upwards. This means that with it at the fore-front, there is a very minimal to null risk of it falling apart or from the competition. Another thing is that this advantage might affect the local providers where they get less consumers of their services, as compared to a few years back. According to my view, Starlink will still be standing having that they will collaborate with the leaders in the local market. They might as well gain and sustain greater-than-average profit margins comparing with the local providers. All this is because of their access to the rural areas which are very many in our country and their faster speeds.