BusinessMTN, Airtel, Others to Lose Market Dominance as Starlink Makes a Debut

MTN, Airtel, Others to Lose Market Dominance as Starlink Makes a Debut



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June 26, (THEWILL) – With last month’s approval of Starlink in Nigeria, there is an indication that some existing network providers in the country may lose part of their market shares in the telecommunications industry. This includes major players like MTN Nigeria and Mafab Communications, as well as other Internet service providers, such as Globacom, Airtel, and 9mobile.

Starlink is a SpaceX satellite Internet service owned by American billionaire, Elon Musk.

With the vantage position of Nigeria as one of the largest markets in Africa, Spacex had in 2021 entered into talks with the Nigerian Communications Commission (NCC) to secure licences needed to launch the network. In May 2022, and as part of SpaceX plan to roll out the satellite Internet service in the continent, the company received the nod to introduce the network in Nigeria.

The Starlink approval is coming very close to the issuance of final letters of award of the Fifth Generation (5G) Spectrum licences to MTN and Mafab Communications, winners of the 3.5 gigahertz (GHz) spectrum auction conducted by the Commission on December 13, 2021.

With the issuance of the licence, both licenced operators are set for 5G network rollout anytime soon. For instance, MTN Nigeria had already confirmed that it will roll out a 5G network by August 24, 2022.

Speaking on the possible emergence of Starlink network in the country, a Microsoft Certified Technology Specialist, Network and Software Engineer, Engr Yusuf Aweda Jimoh, said the impact of Starlink network in Nigeria will be massive.

Noting that none of the existing internet providers for mobile phones in the country would match one third of Starlink’s value, Engr Jimoh said, “The impact SpaceX’s Starlink of Elon Musk would have in any country would be massive”.

Explaining further, Engr Jimoh added, “Starlink is illustrious for its impressive internet speed ranging up to 104Mbps, none of the internet providers for mobile phones would match one third of this value. This is clearly a big threat to the already existing internet service Provider companies”.

Advising the new network provider, he said, “In my opinion, I feel Starlink should not relate directly with the users. It can be the primary provider where the existing companies that are not as big as it is in the business would partner to provide services to the end users”.

Also, a US based Information and Communications Technology (ICT) consultant, Dr Ben Idegwu, said the multiple network provision is good for industrial growth.

Dr Idegwu pointed out that there would be little or no harm done to the operators already awarded the Fifth Generation (5G) Spectrum Licence. He however, noted that there is a difference between the adoption of optic fibre and satellite based network systems.

Listing latency/performance, security, mobile/stationary, congestion and route diversity/up-time as major areas where both network systems differ, Idegwu said, “Fibre optics is fast as it does not have to travel to the orbit and back to transfer data like the way satellites do. It is also cheaper with a relatively low loss and interference”.

“On the other hand, you know the Satellite system is wireless. This enables it to cover regions where fiber optics infrastructure is not possible. Even at that, it has slower data rate and reliability as compared to fiber optics. The reason for this is because fiber optics is wired network and requires a huge investment in establishing it appropriately.”

To Media expert and Chief Executive Officer of Newstide Publications, Dr Marcel Mbamalu, the expectation is that Starlink’s arrival in Nigeria will aid speedy expansion of Internet services to rural areas and create more jobs in those areas to stem rural-urban migration.

Dr Mbamalu also pointed out that the network will offer a child in rural areas, same opportunity enjoyed by those in urban cities in terms of internet connectivity.

“That gap is bridged by Internet access and it can only get better as Starlink adds to the competition to encourage existing providers like MTN, Airtel, 9Mobile and Globacom, improve service quality and delivery”, Mbamalu emphasised

Other telecoms experts who spoke with THEWILL are, however, of the view that, with the approval of Starlink, the emergence of the network would definitely spark up stiff competition amongst operators.

According to SpaceX, Starlink was launched as a low-earth orbiting (LOE) constellation of satellites to provide low latency, high bandwidth internet to consumers across the globe.

A low latency network connection is one that generally experiences small delay times, while bandwidth refers to the amount of information that a connection to the internet can handle at a given time.

Starlink Internet is said to work by sending information through the vacuum of space, where it travels much faster than in fiber-optic cable.

It is also said to be ideally suited for areas where connectivity has typically been unreliable or completely unavailable. With a high population density of most Nigerians in the rural areas, it is believed that satellite based network systems would appeal and effectively cover those potential customers that live in such areas.

Some of the countries where Starlink have been approved include: Nigeria and Mozambique in Africa. Also the network has been approved in the Philippines, Southeast Asia and Ukraine in Eastern Europe.

Meanwhile, Nigeria has been witnessing phenomenal growth in its Information and Communication Technology (ICT) industry, thus enabling socio-economic development in Nigeria and across the African continent.

In the last 20 years, Nigeria has achieved robust growth in its telecoms industry where it went from less than half a million connected telephone lines to over 200 million active mobile lines as at April, 2022. According to reports, the broadband penetration in Nigeria is now 42.79 per cent, just as the country has grown from Second Generation (2G), to 3G, 4G and now the 5G which is about to commence.

In terms of the 5G network, the licenced operators have since declared their readiness to hit the ground running.

At the 90th edition of the telecom consumer parliament, organised recently by the Nigerian Communications Commission, NCC in Ikeja, Lagos, operators said they are upbeat in terms of rolling out the network system.

Also, while declaring open the consumer parliament, themed: 5G Technology: Opportunities and Challenges”, the Executive Vice Chairman of the Commission, Prof Umar Danbatta reinforced the mandate and said the winners, MTN and Mafab Communication, are now expected to accelerate the deployment of 5G network that will usher Nigeria into a more robust Fourth Industrial Revolution, 4IR, and a more digitised Nigerian economy.

According to Danbatta, “in line with the terms and conditions of the 5G license, the licensees are expected to commence roll out of 5G services effective from August 24, 2022”.

He, however, said that industry collaboration is very essential to successful deployment of 5G Services in Nigeria and urged industry stakeholders to stand with the Commission to explore the prospects and potentials of the new technology, which is enormous.

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