The pricey monthly subscription for SpaceX's Starlink is expected to be the biggest barrier for business and internet users operating in South Africa's rural and remote areas, who cannot get broadband or fibre. Photo: IOL
The pricey monthly subscription for SpaceX's Starlink is expected to be the biggest barrier for business and internet users operating in South Africa's rural and remote areas, who cannot get broadband or fibre. Photo: IOL

Elon Musk’s Starlink in South Africa won’t be stellar, predict analysts

By Dineo Faku Time of article published Feb 11, 2021

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JOHANNESBURG - THE PRICEY monthly subscription for the Space Exploration Technologies Corporation's (SpaceX's) Starlink is expected to be the biggest barrier for business and internet users operating in South Africa's rural and remote areas, who cannot get broadband or fibre.

SpaceX's Starlink headed by billionaire Elon Musk this week opened up pre-orders globally to budding customers giving them the ability to enter their details and put down a $99 deposit (R1 463).

Starlink said it was delivering high speed low latency internet broadband as it launched more satellites and installs more ground stations.

“Starlink is now delivering initial beta service both domestically and internationally, and will continue expansion to near global coverage of the populated world in 2021,” said Starlink on its website.

Pricing director at Africa Analysis, Ofentse Dazela, believed there was a feeble business case for Spacex's new broadband service in South Africa given that the country had achieved well over 95 percent 4G population coverage, while 3G sites of the large telcos covered around 99 percent of the South African population.

Dazela said fixed or home LTE plans might actually be the better option for many remote and rural communities provided coverage is adequate.

“My view is that this new service will only become a niche service in South Africa, likely to get few patrons that are not adequately covered by mobile sites.

“In the longer-term, the quality of service i.e latency, competition from mobile broadband retail service providers, and the price positioning of this service will ultimately determine its survival in South Africa,” said Dazela.

Dazela believed that elsewhere on the African continent where mobile broadband coverage was limited, the service would help bring most rural communities online that were currently not covered by available technologies.

“However, the price is most probably unaffordable to many potential users at the proposed monthly fee of $99 per month,” Dazela said.

Starlink said its satellites were more than 60 times closer to the earth than traditional satellites resulting in lower latency and the ability to support service typically not possible with traditional internet.

World Wide Worx managing director Arthur Goldstuck said Starlink would have little initial impact on internet access for the poor, as the cost was prohibitive, but would fill the gaps for users and businesses in rural and remote areas where fixed line or mobile broadband services were not available.

Goldstuck said the cost of the set-up, at $499 upfront and $99 a month, made it clear that it was not intended to address the Internet affordability gap.

“However, the kit that is supplied with the subscription makes it possible to sell on the service to a large number of people at a substantially lower price – if this is allowed in the terms and conditions. Individuals signing up can become min-internet service providers in remote and rural areas. Non-governmental organisations can use this model to bring free Internet access to remote areas, and this could indeed help bridge the digital divide,” said Goldstuck.

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