Table of Contents
Key Points
- Kenya plans to impose new fees on satellite providers like Starlink, aiming to tap into the growing demand for satellite internet.
- The Communications Authority of Kenya proposes annual operating fees of 0.4% of turnover and a one-time Ksh15 million ($116,000) licensing fee.
- Regulatory trends across Africa, like Kenya's, pose challenges for Starlink’s expansion, impacting pricing and affordability in price-sensitive markets.
Kenya is set to introduce new fees targeting satellite communication providers, including Elon Musk’s Starlink, as part of its strategy to tap into the growing demand for satellite-based internet.
The Communications Authority of Kenya (CA) has proposed regulations requiring providers to pay an annual operating fee of 0.4 percent of their gross annual turnover in Kenya, in addition to a one-time licensing fee of Ksh15 million ($116,000).
These charges fall under the Satellite Landing Rights (SLR) framework, which mandates operators to pay either a minimum of Ksh4 million ($31,000) annually or 0.4 percent of their local revenue—whichever amount is higher.
Kenya's push to benefit from the growing satellite internet industry could pose financial challenges for providers like Starlink, which are expanding across Africa. Higher operational costs may be passed on to consumers, impacting affordability in a price-sensitive market.
Regulatory ripples across Africa
Kenya’s proposal echoes regulatory trends elsewhere on the continent. In November 2024, Starlink temporarily halted new residential kit sales in Nigeria, citing a need for regulatory approval of price increases. This followed the Nigerian Communications Commission’s (NCC) rejection of recent price hikes by Starlink, arguing they violated existing rules.
Reuben Muoka, the NCC’s Director of Public Affairs, reiterated the agency’s commitment to protecting consumers from unjustified price increases. The NCC is reportedly pursuing pre-enforcement actions against Starlink to ensure compliance with fair pricing guidelines.
Starlink’s expansion efforts have faced regulatory hurdles in other markets as well. Despite rapid growth, the company’s ambitious plans to connect underserved regions face significant barriers, particularly in markets with stringent compliance requirements.
Musk pushes Starlink into Africa amid regulatory hurdles
Elon Musk, the world’s richest person, now worth $426 billion according to the Bloomberg Billionaires Index, is in talks with the South African government to address regulatory barriers hindering Starlink's entry into the market.
Musk is engaging with President Cyril Ramaphosa to discuss easing the 30 percent Black ownership rule, which requires foreign firms to share equity with local partners. Officials are exploring alternatives such as commitments to local investments and job creation instead of direct equity sharing.
The negotiations reflect the complexities of Starlink’s global expansion, as it balances regulatory compliance with its mission of universal internet access. Across Africa, evolving policies, such as Kenya’s proposed fees, underscore the challenges for satellite internet providers. Striking a balance between regulatory demands and affordability will be key to sustaining growth while bridging the digital divide.
