Safaricom PLC has confirmed it is in talks with Elon Musk’s Starlink and other satellite companies, as competition heats up in its home market where it enjoys a dominant position previously seen as insurmountable.
- CEO Peter Ndegwa told Bloomberg TV that the telco has “to partner with Starlink or other satellite providers in future to make sure that that technology plays right through.”
- Starlink has been on an aggressive expansion drive, ostensibly to reach economies of scale in SpaceX’s founder and CEO Elon Musk’s master plan, that have seen it tussle for market share and shake otherwise complacent telco and ISP sectors across the globe.
- Earlier this month, a source, who requested anonymity due to the sensitive nature of their role, told The Kenyan Wall Street that Starlink tried to convince Safaricom to partner with them before entering the Kenyan market but the telco rejected the offer.
“We have had some discussions, and we will continue to have those discussions to the extent that they complement what we are offering,” Peter Ndegwa said.
Safaricom had initially claimed that Starlink’s operation could weaken regulatory oversight due its cross-border service. The decision to re-engage with Starlink shows that both sides have decided to be pragmatic. Musk’s focus has been on building the hardware, and partnering with local firms for distribution.
Safaricom, which enjoys a dominant position in multiple facets in the telco sector including terrestrial fibre, has recently responded to Starlink’s excursions by increasing speeds in its home fibre packages.
Why Safaricom Changed its Mind
Earlier this week, President William Ruto said that the government’s decision to allow Starlink into the country was prompted by the desire to allow competition reign. He added that healthy rivalry would promote quality and cheaper internet services.
“I have my CEO for Safaricom. Sometimes he is not very happy with me for bringing other characters like Elon Musk and others into the space,” President William Ruto said during the US-Kenya Business and Investment Roundtable.
“I keep encouraging Peter that competition makes you keep ahead and he’s been doing pretty well, I must admit, he’s really upped his game,” he added.
The development was soon followed by a confirmation from Musk that “only a few months before there are 300 direct to mobile phone Starlink satellites in operation.” The number is what’s needed to “achieve continuous coverage over mid latitudes.” Direct-to-Cell will be a game changer similar to the mobile revolution that drove Safaricom and other modern telco’s success against traditional phone lines, as satellite phones remain a niche product.
Safaricom’s reservations about Starlink’s operations are shared by other now traditional networks in other countries where the satellite internet service seeks licenses. In countries such as Zimbabwe and Botswana, Starlink’s regulatory approval has been pegged on partnering with local dealerships and Telcos.
