With African governments uncertain about protecting traditional telecom providers, companies are launching new strategies to address the challenge of low Earth orbit (LEO) satellite connectivity and explore new growth opportunities.
This comes as Safaricom launched a partnership with ESD Kenya, ZainTech’s partnership with Arabsat for North Africa, and Vodacom and MTN’s efforts to boost connectivity via LEO satellites.
GlobalData senior analyst of enterprise technology and services, Ismail Patel, said: “The rapid shift in focus by Africa’s telcos can largely be attributed to a confluence of factors, with Starlink being a key driver.
“These telcos are increasingly seeing unserved and underserved regions of the continent as opportunities rather than investment dead ends.”
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While Starlink’s market share is still small, it’s targeting both underserved areas and higher-value customers, such as small businesses and home offices which has created pressure on traditional telecom providers.
GlobalData also revealed some African governments are requiring Starlink to get licenses, while others are cautious, seeing the potential benefits for rural areas.
Starlink is planning to expand into 14 new African countries by the end of the year which is expected to increase competition further.
Patel added: “Starlink has undeniably changed the competitive field for connectivity, resulting in telcos scrambling for a piece of the rural greenfield opportunity that was neglected for a considerable time. The global LEO is competitive on pricing and offers a quality connection that has not been the norm for many in Africa.
“But not all is lost for the continent’s telco groups, as they can typically offer the type of tech-based services to SMBs that a global LEO cannot, such as – inter alia – improved supply chain management, e-health, adverse weather mitigation, mobile payments and natural resource management.”
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