I had noted that by 2022, Africa would enter the era of affordable and immersive connectivity. With the approval by FCC for SpaceX to launch global broadband service, you would experience total crash in the price of broadband services by 2022 in Nigeria.
SpaceX has a green light from the FCC to launch a network of thousands of satellites blanketing the globe with broadband. And you won’t have too long to wait — on a cosmic scale, anyway. Part of the agreement is that SpaceX launch half of its proposed satellites within six years.
The approval of SpaceX’s application was not seriously in doubt after last month’s memo from FCC Chairman Ajit Pai, who was excited at the prospect of the first U.S.-based company being authorized to launch a constellation like this.
I expect SpaceX to offer a new level of competition against companies like MTN, Glo and Airtel in Nigeria. Though NCC (Nigerian Communications Commission) would like to regulate the use of satellite connectivity in Nigeria, it could be a tough challenge. While WhatsApp is complementary [you need to pay for data to use WhatsApp with say MTN], satellite is a product displacement threat [you have nothing to do with terrestrial mobile operators]. Companies like MTN would see massive threats in coming years from satellite providers.
The biggest threat will come from satellite companies like ConnectAfrica which will reach communities at cost model that can keep the terrestrial players looking for cover. Elon Musk, not Glo or Airtel or Etisalat, may be the biggest competitor to all telecom operators in Africa in 5-10 years, with satellite broadband. He can crash broadband cost by 90% and suddenly GSM will be recorded only in museums. But that will happen if MTN Nigeria and others do not take action today.
At the end of this emerging rivalry, I expect customers to benefit. The fact is this: providing Internet services in Africa would become increasingly satellite-based to overcome most of the legal [right of passage] and infrastructural challenges operators face today. If SpaceX takes this up, it could change the ecosystem.
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