The telecommunications landscape in Africa has undergone significant transformation over the past two decades. With the rapid rise of mobile networks, the continent has made strides in improving connectivity in urban centers. However, vast rural regions remain underserved, creating a digital divide that has long hindered economic growth and development in these areas. Recently, satellite operators have emerged as formidable players in addressing this gap, posing a new competitive threat to terrestrial telecom operators.
In this feature, we explore how satellite technology is shaking up Africa’s rural telecom market, how terrestrial operators are responding to this growing competition, and what the future holds for connectivity on the continent.
The Growing Importance of Rural Connectivity
Rural Africa presents one of the most challenging markets for telecommunications operators due to sparse populations, difficult terrain, and underdeveloped infrastructure. Yet, the potential benefits of improved connectivity are immense, ranging from better access to education and healthcare to fostering entrepreneurship and supporting agricultural advancements. For years, terrestrial operators have struggled to justify the financial investments required to build infrastructure in these areas, as the return on investment (ROI) remains low compared to urban regions.
Governments and international organizations have tried to push for greater connectivity through various public-private partnerships and incentives, but large gaps remain. Today, less than 30% of Africa’s rural population has access to reliable mobile or internet services, leaving millions of people without the digital resources they need to thrive in the modern world.
This scenario has paved the way for satellite companies to enter the market, offering an alternative to the traditional fiber-optic or tower-based networks used by terrestrial operators.
Satellites Step In: The Rise of Starlink, OneWeb, and Eutelsat
In recent years, satellite operators like Starlink, OneWeb, and Eutelsat have made significant inroads into Africa’s rural markets, where terrestrial operators have long struggled. Offering low-Earth orbit (LEO) satellite services, these companies promise high-speed internet to even the most remote corners of the continent. Unlike geostationary satellites, which orbit at a higher altitude and have limitations in terms of coverage and speed, LEO satellites provide faster, more reliable internet with lower latency, making them a game-changer for rural areas.
Starlink, operated by SpaceX, is among the most high-profile entrants in Africa. With a constellation of thousands of LEO satellites, Starlink has already begun delivering affordable internet to rural communities in countries like Kenya, Nigeria, and South Africa. Starlink’s low-latency, high-speed internet solutions are particularly attractive to rural populations where traditional infrastructure is either non-existent or unreliable.
OneWeb, another major player in the LEO satellite arena, has also been expanding its presence across Africa. OneWeb’s mission is to connect the unconnected, particularly in underserved and remote areas. The company’s strategy revolves around offering scalable, high-quality broadband services that can be rapidly deployed to bridge the digital divide. Like Starlink, OneWeb’s network of satellites targets the vast areas where terrestrial coverage is either limited or too expensive to roll out.
Eutelsat, a European satellite operator, has taken a slightly different approach through its Konnect Africa initiative. Using both geostationary and LEO satellites, Eutelsat has been able to offer a range of solutions tailored to rural African markets. The company has struck partnerships with local telecom operators to distribute its services, further expanding its footprint across the continent.
These satellite operators are addressing a long-standing gap in Africa’s telecommunications infrastructure, offering a viable alternative to traditional terrestrial networks. However, their arrival has not been welcomed by all parties.
Terrestrial Operators See Satellite Companies as a Threat
For years, terrestrial operators such as MTN, Airtel, and Safaricom have been the dominant players in Africa’s telecom market. These companies have invested heavily in building cellular towers, fiber-optic networks, and other infrastructure to serve both urban and semi-urban populations. However, their efforts to expand into rural areas have been slow and limited due to the high costs involved and the relatively low potential returns from sparsely populated regions.
Now, with satellite operators stepping in to fill this gap, terrestrial operators are beginning to see them as a serious threat to their market share, especially in rural areas. Satellite companies like Starlink, OneWeb, and Eutelsat offer lower-cost internet solutions that can reach remote areas without the need for expensive infrastructure. This has created a sense of unease among terrestrial operators, who argue that the competition from satellite providers is unfair.
The Issue of Pricing: An Uneven Playing Field
One of the key complaints from terrestrial operators is that satellite companies can offer much lower prices for their services, making it difficult for traditional operators to compete. The reason for this pricing disparity is rooted in the cost structures of the two types of providers.
Terrestrial operators typically invest millions of dollars into building and maintaining physical infrastructure such as cell towers, base stations, and fiber-optic networks. These costs are particularly high in rural areas, where challenging terrain, low population density, and lack of reliable power supply drive up operational expenses. As a result, terrestrial operators have struggled to provide affordable services in rural areas, where demand is relatively low, and ROI remains uncertain.
In contrast, satellite companies rely on their existing networks of satellites to deliver internet services directly from space, bypassing the need for ground infrastructure. While the initial investment in launching satellites is high, the marginal cost of delivering services to new areas is significantly lower. This allows satellite providers to offer competitive pricing, often undercutting traditional telecom operators in rural markets.
The pricing issue is particularly concerning for terrestrial operators because satellite companies are increasingly entering markets where they have had a monopoly for years. Satellite providers are not just targeting unconnected rural areas but also seeking to compete in regions where terrestrial networks are present, threatening to erode the market share of traditional telecom companies.
A Missed Opportunity for Terrestrial Operators
One of the most striking aspects of the current competition between satellite and terrestrial operators is that terrestrial companies had ample opportunity to invest in rural areas in the past but chose not to. For years, terrestrial operators have been reluctant to expand their networks into remote regions, citing high costs and limited profitability. Instead, they focused their resources on urban and peri-urban areas, where the population density and demand for services justified the investment.
Now, satellite operators are filling the gap, providing the connectivity that terrestrial operators neglected. This has led to frustration among traditional providers, who now see satellite companies as encroaching on their territory. However, it is important to note that terrestrial operators had the chance to invest in these areas and chose not to. As a result, their complaints about unfair competition ring somewhat hollow.
Regulatory Concerns: Leveling the Playing Field
Terrestrial operators are now calling for regulatory intervention to address what they see as an uneven playing field. They argue that satellite providers should be subject to the same regulatory requirements as terrestrial operators, including paying licensing fees, contributing to universal service funds, and adhering to local content regulations.
Some terrestrial companies are also pushing for infrastructure-sharing agreements with satellite operators. By sharing resources, both types of providers could reduce costs and improve coverage, creating a win-win situation for the industry. However, such collaborations have been slow to materialize, as terrestrial operators remain wary of working with their new competitors.
What Lies Ahead: Collaboration or Competition?
The future of Africa’s telecom landscape will likely involve a mix of competition and collaboration between terrestrial and satellite operators. As satellite companies continue to expand their reach, terrestrial providers will need to adapt by either finding ways to compete more effectively or seeking partnerships with satellite operators to enhance their rural offerings.
One possible solution lies in infrastructure sharing. By working together, terrestrial and satellite providers could reduce costs and expand coverage more efficiently. For instance, terrestrial operators could provide satellite companies with access to existing cellular towers and fiber networks, while satellite companies could help terrestrial providers extend their coverage in hard-to-reach areas.
At the same time, regulatory frameworks will play a crucial role in determining the outcome of this competition. African governments will need to strike a balance between encouraging investment from both satellite and terrestrial operators while ensuring that rural populations receive affordable, high-quality connectivity.
A New Era for Rural Connectivity in Africa
As satellite technology advances and competition intensifies, Africa’s rural telecom market is undergoing a major transformation. Satellite operators have seized the spotlight with their innovative solutions and wide-ranging coverage, challenging the dominance of terrestrial providers. While traditional telecom companies see satellite operators as a threat, their entry into the market is ultimately beneficial for the millions of people living in Africa’s rural areas, who will now have access to improved connectivity and digital resources.
Whether through collaboration or competition, the future of rural connectivity in Africa looks promising as both satellite and terrestrial operators strive to bridge the digital divide.
