Safaricom recently unveiled a new ultra-fast 1000Mbps (Gigabit per second) Platinum package, which is going for the price of KES 20,000 ($155) per month, in response to Starlink’s offer of internet speeds of up to 200MBPs at KES 6,500 ($50), with flexible payment options.
Furthermore, Safaricom has increased the speed of its 10 Mbps package to 15 Mbps for KES 3,000 (about $23), and increased the 20 Mbps plan to 30 Mbps, as reported by Techeconomy.
Customers on the 40 Mbps tier will now experience double the speed of 80 Mbps, while the 100 Mbps bundle, which costs KES 12,500 ($97), has experienced a significant rise to 500 Mbps.
For its gigabit internet service, the company is now allowing 1 Gbps speeds for KES 20,000 ($155), which is a noteworthy achievement for the region’s internet service providers.
Price war between Safaricom and Starlink
Prior to Starlink’s entry into Kenya, the country boasted just 405 satellite internet users; that figure grew to 1,354 two months after Starlink’s launch and more than tripled to 4,808 by March 2024, according to data from Kenya’s ICT watchdog, the Communications Authority (CA).
This growth is a result of the fact that the company came in with offerings of high speeds over 100 megabits per second (Mbps), at a relatively affordable rate, and internet coverage that can reach even the most remote locations.
It reduced prices by nearly half on Huawei’s fourth-generation (4G) Wi-Fi router making accessibility part of its business strategy.
The price was slashed down to KES 6,999 from KES 10,999. Adrian routers were also cut down to KES 5,999 down from KES 9,999.
For Starlink’s initial price, the purchase of a terminal to allow the connections for a Kenyan home user was set at Ksh89,000 ($628) plus a Ksh3,100 ($21.88) delivery fee, which presented some cost challenges for potential users. Nonetheless, the monthly membership rate stood at Ksh6,500 ($45.89).
At the time, only 9.8 million Kenyans (9%) had access to broadband internet, the majority of whom live in metropolitan and semi-urban areas. 38% had dial-up internet, while up to 22 million individuals still had no access to the internet.
Over a year later, in June 2024, a report by the East African showed that Starlink introduced competitive prices, listing its 50 gigabit (GB) monthly data bundle at Ksh1,300 ($10.16), which is less than half of Airtel’s price; Ksh3,000 ($23.44).
In contrast, market leader Safaricom charges Ksh2,500 ($19.53) for a 45GB monthly bundle.
Currently, according to information on its website, mobile broadband pricing for customers’ home service stands at Ksh3,500 for 30GB and Ksh6,000 for 50 GB respectively.
However, the installation hardware in order to have access to Starlink’s services, still constitutes significant cost barriers for its targeted subscribers. The price as of June 2024, stood at Ksh45,500 ($355.47).
Brewing legal altercation between Safaricom and Starlink
Very recently, Safaricom asked authorities to explore mandating satellite Elon Musk’s Starlink, to collaborate with local mobile network carriers.
A month before that, Safricom had written to the director-general of Kenya’s Communications Authority, stating that “Satellite coverage inherently spans multiple territorial borders and in doing so has the potential to illegally provide services and cause harmful interference within the territorial borders of the Republic of Kenya,” as it expressed concerns over the awarding of independent licenses to the company.
Reuters reported that Safaricom urged the Communications Authority to explore mandating satellite providers to serve as “infrastructure providers” for mobile network operators including itself.
The Kenyan company stated that this will guarantee providers invest in Kenya, employ Kenyans, and follow Kenyan laws.
Safaricom’s concern seems to stem from the potential of satellite internet becoming more accessible and inexpensive, thereby usurping traditional providers in their area of service.
This isn’t unique to Kenya as other African governments have expressed similar concerns.
In Ghana, the National Communications Authority (NCA) deemed Starlink’s operations unlawful due to inadequate authorization.
Regulators in Senegal, South Africa, Zimbabwe, and Cameroon expressed similar concerns, citing the lack of license.
However, while legislation and compliance have been key roadblocks to Starlink’s entry in certain African markets, others that initially prohibited the Internet service provider have later granted it licenses and permitted its business to function.
