Can Starlink Disrupt the Internet Service Market in Kenya?

Starlink is a SpaceX initiative to create a global broadband network. It is a satellite constellation system that aims at delivering global internet coverage. The system is ideally suited for geographical isolated areas. Unlike most internet service technologies that use fiber optics cables for transmission, Starlink uses radio signals through space to transmit data. Ground stations broadcast signals to satellites in orbits, which in turn relay the data back to the Starlink users on Earth.

In recent years, Kenya has made significant efforts in advancing its technology, establishing itself as a regional hub for technology and innovation. Despite these efforts, internet access remains unevenly distributed, especially in rural areas where infrastructure is limited or costly to deploy. Traditional internet service providers (ISPs) have struggled to bridge this digital divide effectively. However, with the impending entry of SpaceX's Starlink into the Kenyan market, there is finally a way to break the technological barrier. This essay explores the potential for Starlink to disrupt Kenya's internet service market by examining its capabilities, competitive advantages, challenges, and the potential impact on existing ISPs and consumers.

Starlink in Kenya

Just like most western products, since its arrival in Kenya in July 2023, Starlink has been rapidly growing, with about 2000% increase within the first year alone. Driven by this, Kenya experienced a remarkable rise in satellite subscriptions during the 2023/24 financial year. In June 2024, Kenya's telecoms regulator, Communication Authority of Kenya, ranked Starlink as the tenth largest Internet service provider with about 8,000 subscribers, and that figure is growing. That growth led to Starlink launching a rental option in August 2024, allowing Kenyans to rent its kits for 1,950 Kenyan Shillings (US$15) per month. Starlink's growth in Kenya is expected to increase the use of satellite internet, especially in underserved areas. This could help bridge the digital divide by making high-speed internet more accessible. It provides high-speed satellite internet solutions across Kenya, offering Starlink equipment as well as expert installation. Its mission is to enhance connectivity, even in remote and underserved areas in Kenya. 

Effect of Starlink in the Kenya’s ISP market

Starlink’s entry into the Kenyan space market caused jitters among traditional internet service providers sparking debate on the need for state regulation. This is majorly after its decision to bring down its cost of Satellite Internet service provisions to affordable friendly prices. The previous pricing which was about USD 700 for installation alone and then monthly tariffs of USD 300 was way above what the majority of internet users are used to. They realized they would not gain any traction with high prices and recently decided to go low. They tweaked their pricing, made it low enough and comparable to what the market was offering by simply converting the capital cost of their equipment into an operational cost and dropping their monthly tariff to between 15$ to 50$ depending on the speeds.

Safaricom which has been the leading ISP in Kenya for a long time felt this shock. For a while in Kenya, since the invention of M-Pesa, Safaricom has been the leading ISP. Other providers like Airtel, Jamii, Wananchi or Telkom Kenya have been competing with Safaricom in this sector but due to Safaricom’s advanced digital infrastructure, it has effortlessly remained to be at the top of the chain. The arrival of Starlink which has better infrastructure, pricing and global reach seems to be a point of concern for Safaricom. Safaricom has then fired a warning shot to the regulatory board in the form of a stern letter advising them on the dangers of allowing new technologies owned by big tech foreigners with little investments on the ground. Specifically, such big tech players may not have paid the exorbitant license fees for spectrum, and are not exposed to the same regulatory burdens in terms of quality of service, compliance with data protection laws, and oversight by national security agencies amongst other requirements that local operators are subjected to.

The board was advised that if indeed they still wanted Starlink operations to proceed in the country, that should only be done through existing operators – as opposed to directly engaging with Kenyan subscribers by hawking their equipment through supermarkets. Despite its efforts, it remains to be seen if Safaricom would be ignored, considering Starlink’s vast investments, employment opportunities, and high taxes it pays among other contributions it makes to the Kenyan economy.

Conclusion

Satellite internet in Kenya is set to grow, particularly in underserved areas where traditional infrastructure remains lacking. There is a clear indication of the disrupt cause by the emergence of Starlink in the Kenyan digital market. It is more than evident that Starlink is causing a shock to the current local ISP’s. With the low pricing, effective and reliable connection, it is with no doubt it will eventually rule Kenya’s ISP market.