In September 2024, SpaceX's satellite Internet service, Starlink, officially launched its operations in Zimbabwe and it is already making a significant mark on pricing of Internet services in the Southern African nation.
In Zimbabwe, Starlink's user terminals retail from US$200 for the mini kit which offers unlimited Internet and speeds of over 100 Mbit/s for US$30 per month.
With this pricing Starlink has now become the cheapest Internet provider in the country.
In just over two months, Starlink's equipment has also sold out in the country's capital of Harare, as well as other surrounding areas.
Starlink making headway in Zimbabwe
The launch of broadband services via Starlink's low-Earth orbit (LEO) satellite constellation had been long anticipated in the country.
Before the September announcement by the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ), several residents had opted to use Starlink's roaming services via service providers in neighboring countries such as Zambia and Mozambique.
However, it came at a high price, with Starlink kits averaging at US$600 (due to third-party suppliers) along with a monthly bill of US$50 for unlimited roaming Internet services.
Internet is a sought-after commodity in the country. However, due to the hefty prices charged by Internet services providers (ISPs) – which average at around US$500 for unlimited Internet – many have had to resort to monthly data packages from mobile network operators (MNOs), often at exorbitant rates.
Erratic Internet service from MNOs is also the norm and the reason why Starlink is now the preferred choice.
Speaking to Connecting Africa, Sammy Tatenda Nyere, ZimCyber-Security's chief technology officer, said the current electricity crisis is also contributing to unreliable Internet services, especially for MNOs who often need to use electricity for their network boosters.
Before Starlink's official launch in Zimbabwe, some residents had been using its roaming services via service providers in neighboring countries, however this came at a high price. (Source: Timothy Sithole)
Nyere commended Starlink for having the capacity to accommodate several users per terminal, which allows households in a particular street to share one Starlink kit and contribute towards monthly payments, in return for accessing faster Internet at a lower price.
"Starlink's inception in Zimbabwe has been most welcome, most people especially in high density areas are sharing Starlink costs, which means more people will have access to the Internet creating a more tech-savvy generation which understands that Internet is not only for WhatsApp and TikTok," said Nyere.
In addition, information technology company Compulink believes that the arrival of Starlink in the country represents an opportunity to improve Internet connectivity and coverage, especially in rural areas.
"Despite being fairly new, Starlink has already begun making an impact as it is already oversubscribed in Harare. It has the potential to significantly enhance the Internet landscape by providing an alternative to traditional providers. Early adopters have already experienced improved access. Many see it as a potential game-changer, enabling more people to access high-speed internet, which is crucial for education, business, and communication," a Compulink spokesperson told Connecting Africa.
"Starlink's pricing, which includes an upfront cost for the hardware and a monthly subscription, is cheaper than local Internet providers for families or organizations. It also promises higher speeds and reliability," Compulink's spokesperson added.
The unfettered communication link between Starlink and its customers has also contributed to its warm reception in the country.
Unlike many of the local ISPs, who tend to have quite bureaucratic sign-up processes to acquire their services, Starlink offers direct engagement with its customers without the need to involve any third parties.
Starlink's impact on the local pricing models
The impact of Starlink's presence has not only been felt by the consumers, but also by the local service providers (LSPs) who have already started adjusting their pricing models.
Telone, a state-owned voice and Internet service provider, is amongst the handful of LSPs that have been given the green light to resell Starlink kits.
Telone announced its reseller status after Starlink revealed its launch in the country.
The company had over the years been only offering asymmetric digital subscriber line (ADSL) and fiber Internet services but recently announced it was now offering mobile Internet services through long-term evolution (LTE) geo-locked SIM cards.
The rollout of the geo-locked SIM cards, which were initially priced at US$1, began in 2019 but were only limited to the Harare province, comprising Harare, Chitungwiza and other satellite towns.
Since then, getting hold of these SIM cards has become a mammoth task, with those in possession of the geo-locked SIM cards selling them at over 1,000% markups on the initial price.
However, since the arrival of Starlink, Telone is now offering its LTE services in other cities such as Gweru and Mutare and has promised to increase its coverage to other cities and towns across the country.
At the same time, Econet, the biggest MNO in the country, launched its SmartBiz LTE SIM card, which is not geo-locked, offering unlimited Internet from US$45 per month.
Although Telone and Econet are yet to match Starlink's pricing model, Jasper Mangwana, an ICT researcher, network engineer and innovator, said the recent changes in pricing and service models by LSPs such as Econet and Telone were made in response to Starlink.
"Starlink has shown a lot of value for customers because the competition it has brought in has forced a lot of ISPs to provide cost effective Internet solutions for instance, the expansion of LTE by local Internet providers because they have seen that the inception of Starlink has provided an alternative for the public," Mangwana said.
"However, to some extent, the inception of Starlink is a threat to the local existing players because they have taken a bigger market, especially for those that just require seamless Internet especially when it comes to resort areas. Nevertheless, it has opened up competition, which will in turn reduce the price of Internet services especially where data has been expensive so that's why Starlink has become a game-changer," he added.
In addition, the Compulink spokesperson said while Starlink could pose a challenge to local Internet providers by attracting more customers seeking better services, it may also encourage local providers to improve their offerings and compete more effectively.
"The presence of an alternative provider can stimulate market dynamics, prompting innovation and potentially better service for consumers. The entry of Starlink is likely to increase competition and thereby reduce overall prices locally. However, this might also negatively affect LSP business, and in turn the economy," concluded the Compulink spokesperson.
Source: https://www.connectingafrica.com/connectivity/starlink-s-entry-into-zimbabwe-lowers-internet-tariffs