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Elon Musk’s Starlink to Serve as Catalyst for Rural Economy, Analysts Explain

For a full kit that will include a terminal, mounting tripod, and Wi-Fi router, it will cost $599 (₦330,000) and then $110 (₦60,500) for preorder and monthly subscription. Its premium service costs about $2,500 (₦1.375 million) for the full kit and $500 (₦275,000) monthly

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Elon Musk's Starlink

The entry of ​Elon Musk’s Starlink into the Nigerian broadband market​​​ is expected to open up the rural economy, after several attempts by existing Internet Service Providers (ISPs) to deepen the unserved areas. 

Unserved areas are the rural and semi-urban communities that have no access to broadband service. And some of the ISPs have been constrained over the years to exploit that terrain.

According to a Global System for Mobile Communications (GSMA) survey, the rural-urban divide in mobile internet use in Nigeria has narrowed steadily, from 53% in 2018 to 39% in 2020. Approximately 61% of Nigerians in rural areas are unconnected, compared to 40% in urban areas.

Starlink ​will ​​provide​ satellite Internet access coverage to​ rural areas ​in Nigeria after receiving two licenses​ -​ International Gateway License and Internet Service Provider (ISP) from the Nigeria Communications Commission (NCC ) last week. 

According to NCC, the International Gateway License has 10-year tenure, while the ISP license is to last for five years. Both licenses take effect from May 2022 and may be renewed after the expiration.

The rural economy in Nigeria is predominantly driven by farming and fishing will implode exponentially in terms of growth and output should Nigerians begin to take advantage of the service.

​Analysts say the project has been crawling over the years and expect ​Starlink to add more velocity to the aspiration​ of deploying satellite Internet which is part of what the broadband penetration is meant to do.

Professor Ndubuisi Ekekwe Founder & Chairman of Famiscro Group said on a note obtained by TechEconomy on Monday that ​Beeptool, a satellite and​ TV whitespace Internet has been working with Starlink on the master license. ​

“​We believe that an improved network quality, not necessarily cost, will shift the upper-tier market.​”​

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“We have been using the SpaceX Starlink system in Nigeria for months, and the thing works, Ekekwe said.

“We bought it in the United States and deployed it on a farm in Nigeria, to help in our agriculture business.” 

​Cost Implications

Just like satellite TV,​ ​satellite broadband is an alternative way of getting ​Internet in your home. ​It​ is beamed all the way from space to a satellite dish that’s installed on the property. It then gets hooked up to a Wi-Fi router just like normal broadband

​For a full kit that will include a terminal, mounting tripod, and Wi-Fi router, it will cost $599 (₦330,000) and then $110 (₦60,500) for preorder and monthly subscription. Its premium service costs about $2,500 (₦1.375 million) for the full kit and $500 (₦275,000) monthly.

​In other words, the standard Starlink service costs offer up to 250Mbps speeds, but it’s closer to 100Mbps for most users. ​Then, the ​Starlink Premium has a maximum throughput of 500Mbps. 

​”​The potentials of the satellite-driven rural economy are immense. I however think that emphasis should be on the affordability of the internet access rather than accessibility, ​a major dealer in selling Internet services who prefers to remain anonymous told TechEconomy. 

​He said ​some schools in the urban cities cannot afford the plethora of internet facilities on offer​, let alone rural areas. ​

​TechEconomy gathered that ​Starlink promises the same network latency of 20-50ms. ​By implication, ​no user will connect to anything different on Starlink’s end​​. It’s all about that new dish with double the surface area. ​  ​

“The advantage with Starlink is the fact that the road or infrastructure is available now,” ​said ​ Nayebare Micheal Engineering Consultant at Fieldcloud SAS​.

.”It depends on the size of your vehicle. It is not worth it for any business to invest where there are no returns because the technology is nice and hype.​”​

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​He said the rural people will benefit from goodwill, funding, or building community-based neutral host networks through the aggregation of resources to avoid the high cost of the service.

​Potentials ​

As Starlink arrives, some startups in the satellite space will begin to make progress in the Nigerian rural business space, Ekekwe said. “​Rural education. Rural agriculture. Rural healthcare. Rural economy. 

He said if the network is reliable in Dutse, why do you need to be in Abuja to create that software which is going to be distributed via the internet? “If you can link that school in Ovim with reliable Internet, the Auntie in London can teach the kids how to master calculus after school. Expect more possibilities.”

As new development begins to unfold, Nigerians will be able to redesign what living in a city means, once there is democratized access to certain utilities, with Internet access being at the top of the list.

“The benefits are immense but which businesses can you help make $500 more with Starlink services or have problems costing them more than $500, that the Starlink service can alleviate,” Michael, questioned. 

‘In the end, it will not matter if these businesses are in towns or villages, the fundamentals of business will remain. Just like any other technology will serve already mature sectors in the African economy for example mining and logistics.”  

According to Michael, ​if it’s agriculture it will serve some of the processing or manufacturing and large commercial farmers and definitely the rich for residential purposes.

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Justice Okamgba functions as CONTENT STRATEGIST for TechEconomy.ng with penchant for content planning, development, analysis, management, and measurement. Contact: [email protected]

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