The Communications Authority of Kenya (CA) has acknowledged Safaricom’s right to raise concerns about the licensing of independent satellite providers, including Starlink.
This development comes amidst growing competition in Kenya’s internet service sector, with satellite internet providers gaining significant traction in recent months.
In a statement, the CA affirmed, “Licensees or service providers are at liberty to raise any issue in the market with the ICT regulator.”
This declaration came in response to Safaricom’s July 15 request for the regulator to block satellite ISPs operating from other countries, a move that could potentially hinder Starlink’s notable uptake in Kenya.
The CA further elaborated on its role, stating, “The authority independently examines such issues within its mandate and regulatory framework and responds appropriately. It is a normal practice as the Authority seeks to facilitate the development of the dynamic and rapidly evolving ICT sector.”
Safaricom’s Security Concerns and Accountability
Safaricom’s petition to the CA raised concerns about potential security risks associated with allowing companies to operate without a physical presence or partnerships with local firms.
The telecom giant argued that licensing such entities could result in “negligible control for the government to ensure accountability for any non-compliance issues.”
Also Read: Starlink Direct-To-Cell: What is it and how does it work?
Despite these concerns, satellite internet has seen a remarkable surge in popularity across Kenya. A recent CA report revealed that satellite internet services more than doubled in the three months leading up to December 2023.
This rapid growth has put unprecedented pressure on traditional telecom providers, including Safaricom, to adapt to changing market dynamics.
Safaricom’s Market Position and Challenges
Safaricom currently holds a dominant position in Kenya’s data market with a 36.7% share, followed by Jamii Telecommunications at 23.2% and Wananchi Group at 22.7%.
The company has made significant investments in infrastructure, laying 14,000km of fiber optic cables and connecting over 400,000 subscribers.
However, recent events have posed challenges to Safaricom’s market dominance. The company faced public scrutiny after releasing conflicting statements about a nationwide internet outage on June 25, 2024, which coincided with countrywide protests over the now-withdrawn 2024 Finance Bill.
This incident, coupled with the rising popularity of satellite internet services, has led to speculation that Safaricom’s move to regulate satellite providers might be a strategy to slow down competitors’ growth, particularly Starlink.
Starlink’s Aggressive Market Strategy
Elon Musk’s Starlink has been particularly aggressive in its approach to the Kenyan market. The company has introduced innovative options to attract a broader customer base, including a new rental plan designed for those unable to purchase hardware upfront.
Additionally, Starlink has implemented strategic price reductions for its hardware kit. The Starlink kit, initially priced at KES 89,000, saw its cost reduced to KES 45,000, with a limited-time offer further dropping the price to an attractive KES 30,000.
These competitive offerings have made Starlink’s service increasingly attractive to Kenyan consumers, potentially threatening to erode Safaricom’s market share.
As the story develops, it will be crucial to monitor how the CA balances the interests of established players like Safaricom with the potential benefits of increased competition and technological advancement offered by newcomers like Starlink.
