Starlink

Galaxy

ELON Coin

Elon Musk

With a geometrically growing population, Africa faces critical challenges for digital development. Its underdeveloped digital reality is owing to a lack of accessible and affordable connectivity, a stubborn digital gender gap, limited skills for digitally enabled industries, and inadequate regulatory and policy environments. 
In the past few years, key players on the continent have made significant strides to build infrastructure that will give citizens access to the internet and enable them to productively utilize digital services, such as mobile payments and online learning platforms. 
The emergence of satellite service providers like Starlink is changing the dynamics of the ecosystem and may redefine the future of internet consumption and the reliance on fibre optic cable for distribution. 
I had a chat with <a href="https://www.linkedin.com/in/diseye" target="_blank" rel="noreferrer noopener">Diseye Isoun</a>, an expert in African broadband development about broadband penetration on the continent, internet access, connectivity and the role of stakeholders. With extensive experience in the space, Diseye deeply understands broadband access and its impact on tech innovation, macroeconomic development, education, and business growth. 
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Diseye played a pivotal role in establishing Galaxy Backbone, NITDA, and Nigcomsat, key components of today’s Ministry of Communications, Innovation, and Digital Economy. He drafted Galaxy Backbone’s mandate, helped introduce satellite connectivity to the government and worked on <a href="https://en.wikipedia.org/wiki/Nigerian_Communications_Satellite" target="_blank" rel="noopener">NigComSat-1</a> marketing. 
 Through his company, Content Oasis, he focuses on delivering connectivity to underserved areas. He secured a <a href="https://www.ustda.gov/ustda-advances-internet-access-in-nigeria-2/" target="_blank" rel="noopener">USTDA grant</a> for broadband feasibility studies. 
Find the interview excerpt below: 
Q: So much has changed in the broadband landscape of the African continent in the past 5 years, we have witnessed an influx of significant fibre projects like Google’s Equiano in West Africa and Umoja in the East, AfDB’s funded project in Congo and many more. Overall, how would you describe the broadband landscape today? Let me put a broad brush on it. You have Lagos, Abuja and Port Harcourt. I put those three cities in one bucket. These locations have decent broadband connectivity, in terms of reliability and options for users. I will call them exceptions because having reliable broadband and reasonable pricing is challenging in many locations today for the fast-growing middle class and hubs of productivity such as educational institutions and the critical enablers of productivity like healthcare centres, markets, offices and schools. Outside of these three markets, we are still challenged despite what you described as some investments. 
Q: It seems there is a discrepancy between the quality and structures available in these cities and other parts of the country. Has the introduction of Elon Musk’s Starlink provided a respite for users outside the cities? A recent report ranked it as the 3rd leading ISP in Nigeria. I would not say that statistics lie. But, statistics may not paint the right picture. In Nigeria, there are about 30,000 Starlink installs. An article shows there are about 3 million installs globally and these are predominantly in developed countries. 
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 A starlink router…
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And, the majority are owned by high to middle-income earners in developed countries. This is maybe a rich guy in a remote area. The global adoption is certainly not driven by the developing countries unlike what they would like you to believe and show in pictures of, for example, an African school. In Nigeria, the number of people who can afford Starlink is still very slim. So, they are catering to a middle to rich upper-class Nigerian market. This is fair enough. They are serving individuals and businesses that can afford it, a few government agencies and generally people unsatisfied with their current service. But, about 30,000 installs is still a drop in the bucket compared to the number of Nigerians in critical need of a good connection. They need an upward of 2 million to make an impact. Moving up to the top 3 in a short time shows the gap that exists within the ISP market. The Nigerian ISP market needs to significantly improve. And, the road to that has nothing to do with what Starlink is doing. 
Q: Some analysts have expressed concerns about the pricing… Even the quote-unquote upper middle class has to put together 300 to 400 thousand to acquire the devices. Then, they have to pay 38,000 for the monthly subscription. These costs have to compete against other costs like school fees, holiday vacations, a bicycle for the child and more. And, we don’t have a credit structure to finance this kind of investment. In France, for example,&nbsp; if you cannot afford the one-time acquisition cost, you can get credit. This is another huge barrier to entry. 
&nbsp;Q: Elon Musk tweeted recently about plans to launch Starlink Mini. Is this going to change the dynamics in any way? Ironically, the one-time cost of the mini is higher than the current Starlink unit. It goes for about $600 or so. Which, today is about 1 million naira.&nbsp; It is a solution for people who are roaming and still need internet for business etc. 
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 Starlink Mini
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So, it is quite an expensive convenience. Starlink is a smart company. They are nimble. They can change over time. And they may eventually decide to do something different. For example, they may change the existing model. But, right now, they are happy to scrape the cream off the top of the Nigerian market and focus on other richer markets, and they will do quite okay. They may also develop a strategy to achieve an additional 10,000 to 20,000 quarterly installs. But, they will eventually max out at maybe 100,000 because of purchasing power capability. 
Q: To the last question on this topic, some industry stakeholders fear that the entry of internet companies like Starlink will affect the market share of telcos and other service providers. You seem to believe that the fear is unfounded. 100%.&nbsp; Again, that’s just my opinion. I believe that the fear is unfounded. Starlink appears to be growing so fast because of the weakness of our traditional ISPs.&nbsp; From the NCC website, you can see that there are nearly 200 ISPs that share about 5% of the broadband market. And, the telcos’ model, price structure and expensive investment cost will always force them to target higher-density areas. And, it is not economically viable to invest in a lot of locations. These are places they will not go to anytime soon. Remember that most started as voice companies. So, Starlink is just a product of our circumstances and not a perfect business model. 
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 Again, strengthening ISPs is the way forward. This will include licensing young Nigerians as franchisees to distribute to their local communities. There are other good ideas around. 
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Q: Do you think satellite internet is the future for broadband inclusion? To provide reliable internet access is simple. You need a reliable backhaul as we call it: trunking, a good chunk of capacity to a base station and a very good redistribution for the last mile. 
A feasibility study will be used to meet optimal investment targets in Nigeria. These include both satellite and last-mile considerations. With the last mile, we can have two important groups. The first is licensed exempt technologies and the second is the licensed technologies. The licensed frequencies can be for players like MTN etc. And, the license exempts will be accessible to smaller ISPs. These will assist penetration in places where main players will not typically go. With AI tools, we can analyse the country and create a roadmap to determine the right allocation of scarce resources across the board. For example, if you have $2 billion, you can allocate $600 million towards fibre, rollout. And, another $400 million on satellite-related backhaul. Then, you can allocate another $500 million to strengthening the last-mile ISPs. This approach is not an either-or. Different things need to be put together to reach the promised land. I will tell you for free that Galaxy Backbone has invested in almost 6000 kilometres of fibre. This was part of a project called NICTIB 1 and 2, which totalled about $500 million in loan investment. Part of these funds went to non-fibre investments such as data centres. These 6000 kilometres of fibre will likely form a part of the 90,000 the government recently announced. 
I hope this helps paint a picture. 
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 Google Umoja, 1st fibre optic cable connecting Africa to Australia, through Kenya
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Q: During the time of the previous minister, Dr Omobola Johnson, we had a broadband penetration target. Today, we are far behind. From your standpoint as a player, what were the challenges we faced as a country? The broadband plan of Dr Pantanmi was an extension of the plan from Dr Omobola Johnson. Yet, the question is why we have been unable to achieve it. If you look at the broadband plan of Pantanmi, for instance, he proposed about 3000 VISAT&nbsp; links across the country for backhauling. And, the plan included broadband fibre across the country. What is missing is the question of last-mile delivery. This is what I call the last mile dilemma. It is too expensive for a network like MTN to put a base station in your village to get to the last mile. So, we have to think about cheaper and more accessible ways. We have a 500-page report that answers how to deal with the last-mile dilemma. You don’t win a race by making it to the 90-yard line. You win the race by bringing internet connectivity to users. And that is the last 10 yards. And this is the elephant in the room. 99% of that last 10 yards is provided by telcos for many reasons. And, they are structured to make decisions that will bring the best returns. The cost of the base station equipment is so high that you need at least 1,000 paying customers around you to offset that expense in a while. With the model that we are proposing, you will only need 50 to 100 customers to run a very cheap base station. And, with it, young Nigerians can make a few million yearly. They will also quickly fix connectivity issues because they are part of the community. 
Q: We recently <a href="https://technext24.com/2024/05/14/nigeria-spv-90000km-broadband-fibre/" target="_blank" rel="noreferrer noopener">wrote about</a> the government’s 90,000 fibre project. Should the citizens be optimistic? I am going to repeat myself. Without the context of the last mile, without disrupting the traditional ISP industry and without implementing low-cost base stations, I think that the fibre project will not achieve the needed return on investment. 
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Q: At the level of the state governments, what policy directions do you think the governors should explore? Much of the policy direction and outcomes are influenced by the central or Federal government. Yes, the State Governors can review right-of-way laws but that is less than 10% of the requirement. 90% of the policy direction and incentives happen at the federal level. 
Q: Going forward, what are the top three action points that you would suggest that the government should consider if they must achieve our broadband target? We need to have a cohesive plan that gives equal importance to satellite, fibre, last-mile solutions and empowerment of traditional ISPs. The NCC is well-positioned to fund an analysis that will result in such a plan. It will create jobs and foster a sense of ownership. 
Q: Thank you, Diseye, for your time. Thank you for having me.

“Strengthening ISPs is the way forward”- A chat with Diseye Isoun on broadband connectivity in Africa

Technext.ng

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