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Stakeholders See Dangers in Nigeria ISP Market with Starlink’s Possible Dominance



Stakeholders See Dangers for Nigeria ISP Market
L-R: President, Nigeria Internet Group (NIG), Mr. Destiny Amana; Chief Executive Officer, Equinoxcore Technology, Mr. Lanre Olanrewaju; Head of Operations, Association of Licensed Telecoms Operators of Nigeria, Mr. Gbolahan Awonuga; TSSF Convener and Editor, Business Remarks, Ms. Bukola Olanrewaju; CEO, VDT Communications, Mr. Biodun Omoniyi; Chief Operating Officer, eStrean Networks, Mr. Martins Akingba; and Executive Secreatry, Association of Telecommunication Companies of Nigeria, Mr. Ajibola Olude.

Contrary to popular opinion, stakeholders in the Nigerian telecommunications industry have expressed worries over the licences mopped up by Starkink in Nigeria which portend dangers for the country’s  Internet Service Providers (ISPs) market.

According to them, various categories of licences obtained by SpaceX, the satellite company of Elon Musk, offering broadband services with Starlink as its market name, may lead to dominance which endangers other players in the space.

They expressed their views at the Telecom Sector Sustainability Forum third edition (TSSF 3.0) organised by Business Remarks themed “Starlink: A Threat or Prospect to the Sustainability of Nigeria ISPs, MNOs and Infracos held in Lagos.

Acknowledging the fact that the emergence of Starlink has re-introduced satellite internet technology to the market space, Nigeria ICT stakeholders however noted that the telecoms regulator needs to address the business model to protect local players and create healthy competition.

Recall, SpaceX’s satellite internet service, Starlink announced its availability in Nigeria, months after it signed an agreement with the Nigerian government to bring in its satellite-based internet coverage, thereby, making Nigeria the first African country to use satellite internet and 46th in the world.

The public believes that the introduction of Elon Musk’s satellite internet service, Starlink will widen competition in the Nigerian internet market while disrupting the internet market.

Starlink was included alongside 37 other Internet Service Providers, increasing the number of ISPs issued licenses to operate in Nigeria to 255 as of September 2022, up from the 187 reported in December 2021.

Speaking at TSSF 3.0, eStream Network Chief Executive Officer, Muyiwa Ogungboye who was ably represented by the Chief Operating Officer, Mr Martins Akingba stated that Starlink can be a threat to the local ISPs if the gaps found with the solutions are treated.

According to him, if the objective of the Nigerian Communications Commission (NCC) with Starlink’s introduction is to provide high-speed internet access to underserved and rural areas in the country, this solution will not serve the purpose.

Stating that Starlink is not designed for the Nigerian rural market, Akingba highlighted pricing and lack of local and after-sales support as part of the reasons.

Furthermore, he said ISPs served both the retail and the enterprise markets. In his words “A lot of our enterprise market is already considering the solution but security is a major concern because they do not have an idea of how the traffic is being routed.

“As an ISPs local player, the advent of Starlink makes us question if the regulator is really careful of the investments made by players in this industry, millions of naira have already been invested in infrastructures even in the underserved areas,” he asked.

Also speaking, the Chief Executive Officer, Pan African Towers, Azeez Amida who was represented by the General Counsel, Babatunde Olaniyan said Starlink might both be a threat and a prospect but the wide adoption of the 5G network in Nigeria will pose a greater challenge to the solution.On his part, the Chief Executive Officer of VDT Communications, Mr Biodun Omoniyi encouraged local players not to see the solution as a threat because Starlink is a leo-satellite, not too far fetch from the satellite technology.

He posited that as a disruptor, local players need to identify the gaps and fix them to have an edge over the solution.

“There will definitely be some adjustment in the market, and not a case of the winner takes all kind of situation. Some people will take up the solution, some will continue to rely on their mobile devices for internet access and others will be for fixed wireless access. If this happens, the consumers are provided with alternatives.” Omoniyi noted.

Although, he said being the first to launch is not really a big thing but is the industry, players and citizens are protected. Is the data accessible to the regulators, how do we do KYCs, and can the rural dwellers afford it, questions such as these need to be asked following the solution emergence in the Nigerian space.

Ominiyi charged the regulators to licence both the sellers, agents and providers to create a better ecosystem while encouraging operators to address their business models (pricing, positioning and support) to stay afloat and be profitable in the market.

The Chief Executive Officer, Equinoxcore Technology, Mr Lanre Olanrewaju spoke on the challenges subscribers are facing such as loss of money, falling victim to fraud, poor signal quality due to poor installation, data loss, and irregularity in the cost of gadgets.

According to him, the lack of physical office and after-sales support is a major concern for users and this challenge will continue to persist if there are no proper regulations around this.

Lanre noted that the disruptive agenda might not be achieved. On contribution to the economy, he asked if the organisation pays VAT.

Expressing his concern, the Head of Operations, Association of Licensed Telecoms Operators of Nigeria (ALTON), Mr Gbolahan Awonuga said the licenses given to Starlink might lead to the extinction of ISPs and also the domination of the market space if not checkmate.

Awonuga urged NCC to create a level playing field for operators bringing to remembrance the extinction of CDMA in the Nigerian Telecoms market. He also make case for affordable internet service for consumers.

In addition, the Executive Secretary of the Association of Telecommunications Companies of Nigeria (ACTON), Mr Ajibola Olude stated that the regulatory safety might be weak, once there is no balancing game.

He also urged NCC to create guidelines to safeguard local players, edges on the value chain such as generating employment opportunities and restrictions in the rural areas.

On her part in her welcome address, the Convener, Bukola Olanrewaju who also doubles as the Managing Editor of Business Remarks stressed that given the internet’s increasingly important role as a communication tool, internet connectivity has become a vital component of daily life, and many nations have embarked on ambitious projects to expand and improve access to the internet.

“It is believed that the use of satellite technology in Nigeria dates back to the military era and also a known fact that satellites have played a fundamental role in providing connectivity.  In the last few years, the space industry has seen a rapid increase in satellite launches.

“Although Nigeria is regarded as Africa’s fastest-growing telecommunications market, its broadband penetration is largely dependent on fibre connectivity,” she said.

She recalled that at the first edition of the telecoms sector Sustainability Forum, the Nigerian Communications Commission (NCC) noted that as a result of the challenges militating against ISPs, deliberate policies and regulations are being looked at in the Commission in ensuring that ISPs and other smaller players in the industry thrive.

Olanrewaju stated further that it is on this basis that stakeholders and experts were assembled to dissect this edition’s theme.

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