Starlink Internet Services Nigeria Limited, an internet service provider being operated by Elon Musk’s satellite company, SpaceX, is facing its first regulatory huddle which may lead to sanction in Nigeria.
The Nigeria Communications Commission (NCC), the country’s telecoms sector regulator, said it has commenced pre-enforcement action against Starlink for what the regulator described as a unilateral review of its subscription packages.
NCC said in a statement signed Wednesday by its director of public affairs, Reuben Muoka, that the decision by Starlink to jerk up its subscription prices was not sanctioned by the Commission.
Recall that Starlink announced last week that it would raise its standard service subscription in Nigeria by 97%, increasing monthly fees from N38,000 to N75,000.
According to NCC, “The action of the company is in contravention of Sections 108 and 111 of the Nigerian Communications Act (NCA), 2003, and Starlink’s Licence Conditions regarding tariffs.
As such, “The Commission commenced pre-enforcement action on the licensee on the 3rd of October, 2024,” the statement read.
Starlink commenced operations in Nigeria in January 2023 as a licensee in the Internet Service Provider (ISP) space of the country’s over $75.6 billion telecoms industry.
Using satellite technology to deploy broadband aligns with the aspirations of the Africa’s largest telecoms market to bridge digital gap and attain up to 70% broadband penetration by 2025, with specific considerations for the unserved and underserved regions.
Riding on its acknowledged internet speed ranging from 150 to 500 Mbps, Starlink has promised to revolutionise internet usage in Nigeria, particularly in rural and remote areas where access has been historically limited.
Starlink has benefited from the quality of its service, as it now arguably boast of fastest-growing ISP subscribers base.
Data released by the NCC showed that Starlink emerged the third largest ISP in the market by the end of 2023, despite being one of latest entrants into the ISP space where many other operators have had to close shops harsh operating environment.
The telecoms company may be facing its first regulatory sanction in Nigeria for bypassing the NCC before its subscription hike decision and announcement.
Recall that telecoms operators in the country under the aegis of the Association of Communications Companies of Nigeria (ATCON) and the Association of Licensed Telecoms Operators of Nigeria (ALTON) have continued to clamour for permission of NCC to raise tariffs of telecoms services in the country.
In the second quarter of this year, the chiefs of the two bodies jointly called for the urgent attention of the government to save the sector, highlighting the need to raise telecoms tariffs as an urgent need.
They argued that despite the adverse economic headwinds in the country, the telecommunications industry remained the only industry yet to review its general service pricing framework upward in the last 11 years, primarily due to regulatory constraints.
They stressed that for a fully liberalised and deregulated sector, the current price control mechanism, which is not aligned with economic realities, threatens the industry’s sustainability and can erode investors’ confidence.
Despite their constant requests for the upward review of prices of telecoms services at any given opportunity, the associations and their members has refrained from unilaterally satisfying the urge, as the continue to wait on the regulator for approval before increasing their prices.
