How Starlink upended Africa's telco go-to-market strategies
Connectivity and digitisation have been key telco themes in the African continent for more than a decade now.
The promise of 4G back in the early 2010s was thought to bring the underserved and unserved population across the continent into the connected world. Now, with the general availability of 5G, the prospect of these same underserved segments remain unaddressed, with operators sticking to urban and suburban rollouts for faster return of investment.
Notwithstanding ongoing price sensitivity, urban centres across Africa became mature, akin to any other Western market, while rural and hard-to-reach areas were left behind.
The global SpaceX Starlink (Starlink) experiment was not designed to directly compete with Africa's major telecoms operators per se, or to reshape regulation of connectivity services in many countries. But these have certainly been one of Elon Musk's low-Earth orbit (LEO) satellites' more pronounced ramifications.
With its relatively cheap pricing, quality of service, and Starlink's promise to launch in 14 more African markets in 2025, telco connectivity in the continent is in unchartered territory.
Herein lies the dilemma for African governments: allow Starlink (and other such international LEOs) to deploy and stimulate the economy in underserved areas or curtail them for the benefit of licensed telecoms operators.
Across Africa, we are witnessing a regulatory divergence on this issue, with most North African markets banning it and several others including South Africa revoking approval for Starlink.
But banned or not, African operators are finally looking at the neglected opportunity of underserved areas more seriously, probably as a defensive measure more than anything else. Combined with next-generation enterprise technologies that can assist rural small office/home office (SOHOs) and small businesses with efficiency tools targeting resource management and supply chain management, operators are slowly positioning themselves to pool their efforts to serve these segments.
In this regard, recently announced initiatives such as the Orange-Vodacom tie-up for network deployment in Uganda's rural areas and Safaricom's partnership with local satellite company ESD Kenya as well as MTN and Vodacom's own attempts to forge their own LEO satellite partnerships indicate that the African telecoms landscape has been reshaped for both consumers and rural businesses.
For enterprise services, there will be challenges for the telcos on implementation as well as matching next-generation services to the capabilities of lower-end smartphone customers or dumb phones, the primary devices for data connectivity across Africa. If these are overcome, then there is also the risk of over-reliance on technology for newly connected businesses, which can be problematic in the case of energy outages or cyberattacks.
In mitigation, service providers should actively engage with customers on the benefits of new solutions to the underserved areas, conduct awareness sessions and encourage trials wherever feasible, and highlight success stories in similar settings and sectors from elsewhere.
For further detail, please refer to GlobalData's Advisory Report: 'The Best Defense Is A Good Offense' – How African Telcos Are Finally Getting Their Act Together On Underserved Regions
"How Starlink upended Africa's telco go-to-market strategies" was originally created and published by Verdict, a GlobalData owned brand.
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