The brewing conflict between the Nigerian Communications Commission (NCC) and Elon Musk’s Starlink, alongside local mobile network operators (MNOs), over a recent tariff increase has gradually grown into one of concern.
On October 1, 2024, Starlink, an internet service provider (ISP) via satellite owned by Musk, the world’s richest man, announced a steep increase in its subscription prices in Nigeria, attributing the move to inflation.
Starlink raised its standard package for residential users to ₦75,000, up from ₦38,000 per month — an increase of 97.37 percent. Its mobile-regional roaming unlimited package now costs ₦167,000, while the mobile-global roaming service jumped to ₦717,000. The cost of Starlink hardware also increased, from ₦440,000 to ₦590,000.
Anticipating industry backlash, the NCC issued a statement on October 8, 2024, accusing Starlink of violating sections 108 and 111 of the Nigerian Communications Act (NCA) 2003 by increasing tariffs without regulatory approval.
“The decision by Starlink to unilaterally review its subscription packages upwards did not receive the approval of the Nigerian Communications Commission (NCC),” the commission said in a statement. “We were surprised that the company jumped the gun by announcing price changes after filing a request to the Commission seeking approval for a price adjustment, for which the Commission was yet to communicate a decision.”
NCC added that Starlink’s action contravened the conditions of its license regarding tariffs, stating that the commission would take appropriate enforcement measures against any licensee whose actions could undermine the regulatory stability of Nigeria’s telecommunications industry.
The commission cited sections 108 and 111 of the NCA 2003, which give the NCC authority to regulate telecom tariffs. Section 108 explicitly prohibits any licensee from imposing charges for services without first obtaining approval from the commission. Section 111 allows the regulator to impose financial penalties on any licensee that exceeds approved tariff rates.
Meanwhile, local MNOs in Nigeria have been lobbying for a tariff hike due to rising inflation, the high cost of diesel, foreign exchange challenges and other economic pressures. Despite these headwinds, MNOs have not increased their rates in over 11 years.
However, shortly after issuing the statement about Starlink’s tariff hike, the NCC quickly withdrew it, stating that the announcement had been sent in error. This retraction raised questions within the industry, leading some to wonder if the regulator had softened its stance.
Industry observers expressed concerns that the NCC might not enforce its laws effectively. Some players, especially those advocating for tariff increases, worry that the regulator’s inaction on Starlink’s unilateral tariff hike could lead to further unrest in the sector. Should the NCC remain silent, MNOs might resort to self-help measures, potentially destabilising the market.
Although no reason was given for withdrawing the statement, analysts speculate that the commission’s actions reflect regulatory complacency, especially at a time when operators are struggling with shrinking profits amid an economic downturn. Several local telecom operators have reported losses, further fueling frustrations.
Industry insiders have criticised the NCC’s double standard. For two years, local MNOs have been lobbying for tariff increases, only to be met with the commission’s resistance. In contrast, Starlink, which officially entered the Nigerian market in January 2023, appears to have been given leeway to raise its prices by nearly 100 per cent.
One major industry player, speaking on condition of anonymity, remarked: “Starlink only beams its satellite into Nigeria and acquired an ISP license from the NCC to offer its services. It currently has no significant investment in the country. Many of us have been here since the liberalisation of the telecom sector, investing heavily in infrastructure to connect more Nigerians, despite numerous challenges. We’ve been appealing to the commission for a tariff review for years now, but they keep telling us they need to conduct a cost-based study first. We’re still waiting for the results of that study, yet Starlink is allowed to raise its prices with no problem. It’s a clear case of regulatory double standards.”
Some in the industry believe the NCC has lost control of its regulatory oversight, pointing to its failure to address the issue of tariff increases for local operators. They argue that the commission’s initial statement on Starlink was merely a knee-jerk reaction, one it could neither justify nor sustain.
“This isn’t the NCC of our founding fathers,” lamented a veteran industry player, who described himself as one of the “ancestors” of Nigeria’s telecom sector. “Starlink came in with disruptive technologies that are already making a world of difference for consumers, and we watched as if nothing was happening. The company came prepared, obtaining six licenses from the NCC and securing various permits and approvals to launch its satellite-based internet services.”
Starlink’s strategic partnerships in Nigeria include a memorandum of understanding (MoU) with Technology Distribution Africa (TD), one of the country’s largest technology distributors, founded by Leo Stan Ekeh. The collaboration positions Starlink to expand its services, particularly in underserved and unserved areas across Nigeria and other parts of Africa.
Starlink’s parent company, Space Exploration Technologies Corp (SpaceX), reportedly plans to invest nearly $30 billion over time in Nigeria’s operations alone. This massive investment, coupled with the government’s eagerness to meet its broadband connectivity target of 70 per cent by 2025, as outlined in the National Broadband Plan (NBP) 2020–2025, raises further questions. Is the government willing to compromise the purchasing power of subscribers to achieve its connectivity goals?
Starlink’s six licenses in Nigeria include those for ISP services, gateway service provider, international data access (IDA), sales and installation major, Gateway Earth Station and very small aperture terminal (VSAT). These licenses have allowed the company to quickly become a major player and a potential threat to existing operators in the industry.
Since its official launch in January 2023, Starlink has made significant strides. Initially pricing its hardware at $600 and subscription at $43, the company quickly adjusted its prices to align with the naira. Globally, Starlink has more than four million subscribers, marking rapid growth despite mounting competition. This represents a remarkable achievement for a service that was still in its beta phase as recently as October 2020. In just over four years, the service has grown from one million subscribers in December 2022, to two million by September 2023 and four million just months later.
Starlink operates through a vast constellation of nearly 6,000 satellites, providing internet access to users in almost 100 countries, including previously underserved regions in Africa and the Pacific islands. The company’s rapid growth reflects both its market dominance and the rising demand for satellite internet services, especially in areas where traditional broadband infrastructure is lacking.
Cable cuts continue to plague Nigeria’s internet landscape, posing a major challenge for MNOs. Starlink’s satellite-based service could potentially bridge the gap, offering high-speed internet access to underserved communities and unlocking educational and economic opportunities for millions of Nigerians currently excluded from the digital world.
The satellite company also promises business continuity, touting its ability to avoid disruptions caused by cable cuts. Starlink’s independent internet access could provide much-needed resilience, ensuring that businesses remain operational even during outages.
Recent cable cuts have severely impacted online learning and remote work, but Starlink’s stable internet connection could help facilitate smoother experiences for students and professionals alike. The service offers a lifeline for those in rural areas, where access to reliable internet has long been a challenge.
As Starlink continues to expand, its presence in Nigeria is likely to reshape the telecommunications landscape, forcing local operators and regulators alike to reconsider their strategies. Whether the NCC will rise to the challenge and enforce regulatory compliance across the board remains to be seen, but for now, the industry is left in a state of uncertainty.
