PREMIUM – New satellite technology puts telecom firms on notice

“Late last year, China, for example, announced that it had completed the initial setup of its first high-orbit satellite communication network, which is expected to provide a satellite internet service within its borders and beyond. What is ominous for the telecommunications industry is that the Asian giant last year became the first country to offer smartphones with satellite-calling features.”

 Tawanda Musarurwa

STARLINK, a subsidiary of the Elon Musk-controlled SpaceX, has already “expressed interest in offering services in Zimbabwe”, according to the Postal Telecommunications Regulatory Authority of Zimbabwe (Potraz), and this has put the telecommunications industry on notice.

Experts say it is not so much about Starlink the company but the technology, which thrives on a constellation of advanced low-orbit satellites that make it possible for the internet to reach any part of the world.

And providing such a ubiquitous service at an affordable price is likely going to be hugely disruptive to the telecommunications sector as we currently know it.

The technology is already here.

Late last year, China, for example, announced that it had completed the initial setup of its first high-orbit satellite communication network, which is expected to provide a satellite internet service within its borders and beyond.

What is ominous for the telecommunications industry is that the Asian giant last year became the first country to offer smartphones with satellite-calling features when Huawei launched a 5G phone linked to similar high-orbit satellites.

It becomes an existential battle for mobile network operators (MNOs) and internet service providers (ISPs).

While Starlink has expressed interest to invest in Zimbabwe, it is yet to apply for a licence.

“On the issue of Starlink, the authority wants to categorically state that it is not blocking Starlink in any way,” said Potraz director-general Dr Gift Muchengete recently.

“They have expressed interest in offering services in Zimbabwe and have been provided with all the relevant information to facilitate their application. However, they have not yet applied for a licence.

“As long as they operate without a licence, their services in Zimbabwe are considered illegal.”

The allure of Starlink technology

The allure of the new technology is in its ability to provide universal connectivity at affordable prices, as well as unlimited data, seamless self-installation and high internet speeds.

This is likely to leave telecommunications companies in a lurch, as they usually need huge resources to deploy infrastructure to underserviced and unserved communities.

The cost of setting up a base station is estimated to hover between US$400 000 to US$500 000.

Econet, the country’s biggest mobile telephone company, currently has 5 700 base stations, which is more than half the industry total of 10 598.

Conversely, the Starlink hardware costs an estimated US$600, while subscriptions average US$50 per month.

However, this fee affords subscribers unlimited internet that has download speeds of above 100 megabits per second (Mbps).

It is believed that the cheapest unlimited internet service one can get in Zimbabwe costs about US$240 — US$190 more than Starlink’s — but the speeds are roughly a fifth of what the American company is able to provide.

So, there is no conceivable way local companies could withstand the competition that comes with the new technology.

Zimbabwe has long grappled with sluggish and exorbitant local internet services.

But are Zimbabwe’s internet prices extortionate?

Currently, one gigabyte (GB) of data averages US$3,54, compared to an average of US$1,81 in South Africa, US$1,26 in Eswatini, US$0,78 in Mozambique and US$0,38 in Malawi, according to the Worldwide Mobile Data Pricing 2023 report by Cable.co.uk.

But local telecommunications company TelOne believes its data prices are “uneconomic” — declining to US$6,57 for 10GB as at December 2023, from US$13 for 10GB in April 2023 — due to the depreciation of the Zimbabwe dollar against the greenback.

With regard to pricing, however, the lack of smaller, affordable packages could work against Starlink.

Soaring demand

Overall, the value proposition that Starlink provides has made its internet provision one of the most sought-after services locally, regardless of its licensing status.

In Zimbabwe ISPs must be licensed by Potraz, according to the dictates of the Postal and Telecommunications Act (Chapter 12:05).

However, with the service going live in neighbouring Mozambique in June 2023, locals can easily access it by purchasing Starlink Roaming from Maputo.

In South Africa, it remains banned over non-compliance with the country’s broad-based black economic empowerment (B-BBEE) requirements.

And earlier in February, Botswana rejected Starlink’s application to provide services in the country, indicating that it had fallen short of statutory requirements.

Further, in December last year, Ghana’s National Communications Authority (NCA) warned against the illegal sale and use of Starlink equipment.

“Any entity which provides electronic communication services in Ghana without a licence or authorisation from the NCA is in direct violation of Section 3(1) of the Electronic Communications Act 2008, Act 775, which states that, ‘Except as otherwise provided under this Act a person shall not operate a public electronic communications service or network or provide a voice telephony service without a licence granted by the Authority’.”

So, while Starlink had spread its tentacles to more than 71 countries around the world by January this year, the service has not quite received red-carpet treatment in all jurisdictions.

A threat to local ISPs, MNOs

But if Starlink manages to meet the regulatory requirements, it might be licensed, sooner or later, in Zimbabwe.

This raises a key existential question for the local ISPs and telecommunications companies: Will they survive the inexorable disruption?

But how competitive are local service providers?

The Speedtest Global Index showed that in December 2023, Zimbabwe had an average download speed of 27.39Mbps and an average upload speed of 11.71Mbps for mobile internet.

For fixed broadband, the country recorded an average download speed of 14.20Mbps and an average upload speed of 11.01Mbps.

According to international broadband speed checker, broadbandspeedchecker.co.uk, Zimbabwe’s ISPs had an average download speed of 28.83Mbps and an average upload speed of 20.2Mbps as at February 2024.

Meanwhile, Starlink says its users “typically experience download speeds of between 25Mbps and 220Mbps, with a majority of users experiencing speeds of over 100Mbps. Upload speeds are typically between five Mbps and 20Mbps”.

These numbers show that while local ISPs may lag behind Starlink in download speeds, upload speeds are in range.

Beyond the issue of internet speed, the entrance of a significant player such as Starlink could shrink business for existing players, given the comparatively small size of Zimbabwe’s internet market.

According to the Zimbabwe National Statistics Agency’s 2022 Population Census, the country’s population presently stands at 15,1 million.

On the other hand, data from Potraz’s third-quarter 2023 report indicated that the country had 10,6 million internet and data subscribers, which indicates a highly competitive internet market.

So, intense competition could force current players to downsize, resulting in job losses.

But TelOne, a parastatal that has a headcount of 1 640, is optimistic.

It has since broadened its scope by acquiring a unified telecommunications licence up to 2041.

This not only allows it to operate both fixed and mobile telecommunications networks, but also offer wholesale services to other licensees.

“We are not new to disruption as a business,” said TelOne CEO Engineer Lawrence Nkala.

“From time to time, we have adapted to the new dictates, and we have embraced new technologies.

“I believe fibre is what every technology is trying to mimic in terms of throughput and quality.

“From our end, we believe we can improve our efficiencies, improve our uptime and improve our throughput.”

He also opines that satellite technology is excellent when there are fewer users.

The soaring number of subscribers on satellite systems, he reckons, would likely affect the quality of the service.

“We now know that where Starlink is operating in neighbouring countries, for instance, Zambia, Malawi and Mozambique, the disruption of terrestrial connectivity over fibre and mobile solutions has not been that big, because ISPs there offer presence and quality, particularly on the enterprise space,” added Eng Nkala.

A heavily indebted industry

It is reasonable, if not natural, for local ISPs and MNOs to fret over the entrance of a disruptive player like Starlink.

The sector has over US$800 million in foreign debts, with those funds having been sunk into investments in equipment and infrastructure.

TelOne and State-owned mobile network operator NetOne account for most of these legacy debts at US$399 million and around US$330 million, respectively.

TelOne, in particular, is presently seeking US$200 million for “infrastructure modernisation and capacity upgrades”.

The Government has, however, committed to ring-fence its US$399 million legacy debt, a process that should be expedited as the entity is now under a sovereign wealth fund, Mutapa.

Starlink’s baggage

But Starlink, owing to its seemingly incestuous links with the America security services, comes with its own baggage.

Just last week, Russia announced that it was aware of US intelligence efforts to use commercial satellite operators such as SpaceX.

The company is reportedly building a network of hundreds of spy satellites under a classified contract with a US intelligence agency that manages spy satellites, the National Reconnaissance Office (NRO).

SpaceX’s Starshield has a US$1,8 billion contract with NRO, signed in 2021.

And this has made countries wary about licensing Starlink.

A September 7, 2023 post by Musk on X (formerly Twitter) shows the immense geopolitical influence the company now wields.

“There was an emergency request from (Ukraine) government authorities to activate Starlink all the way to Sevastopol. The obvious intent being to sink most of the Russian fleet at anchor. If I had agreed to their request, then SpaceX would be explicitly complicit in a major act of war . . .”

In December 2022, SpaceX announced Starshield, a programme basically designed to leverage on the same technology as Starlink’s, but with government and military applications.

And if there were any doubts about the potential uses of the Starshield programme, in September 2023, CNBC reported that the Pentagon had awarded SpaceX its first confirmed contract for Starshield to the tune of US$70 million.

Space Force spokesperson Ann Stefanek told CNBC at the time: “The SpaceX contract provides for Starshield end-to-end service (via the Starlink constellation), user terminals, ancillary equipment, network management and other related services.”

The phrase “other related services” is always dangerously ambiguous.

The concern is that governments or entities with access to Starshield (such as the United States) can exploit Starlink’s global coverage for surveillance, disruption or espionage.

Vulnerabilities

To understand the vulnerabilities of Starlink, it is important to have a basic understanding of how the system works.

Satellite internet services function by sending signals to and from a constellation of small satellites in low-earth orbit (LEO).

LEO satellites orbit between 200 kilometres and 2 000km above the earth, compared to those in a geostationary orbit (such as the Mazowe Earth Satellite Station), which are about 37 000km above the earth. As such, LEO satellites offer faster internet.

By January 2024, Starlink had 5 289 satellites in orbit, with a plan to have around 12 000 by 2027.

Musk has indicated long-term plans to have 42 000 satellites in orbit.

These satellites communicate with ground stations and users’ satellite dishes, creating a network that can deliver internet services to remote areas that have not been reached by traditional cable or fibre-optic networks.

By its nature, the system is prone to data interception, signal jamming and even physical attacks on satellite infrastructure, including ground infrastructure.

In September 2022, a security researcher at the Belgian university KU Leuven, Lennert Wouters, exposed vulnerabilities on Starlink’s user terminals at the Black Hat Security Conference in Las Vegas, the US.

“Our attack results in an unfixable compromise of the Starlink and allows us to execute arbitrary code,” he said.

“The ability to obtain root access on the Starlink is a prerequisite to explore the Starlink network freely.”

Several security upgrades have been made on the Starlink system since then, but so, too, have hacking methods.

But it is fair to say that all systems have vulnerabilities.

Exigencies of spreading internet to the underserved and unserved

Potraz statistics indicate that the country’s internet penetration is around 70,1 percent.

For all its challenges, satellite internet offers greater scope than fibre broadband, for example, to expediently expand internet services to previously marginalised areas.

With its Ka-band satellite offering (via the Mazowe Earth Satellite Station), TelOne has satellite internet offerings for rural areas as well, but this is at a much smaller scale than Starlink’s, and far more expensive.

TelOne’s Ka-band kits range between US$500 and US$1 280, while the packages range between US$400 and US$650 a month.

Overall, the new satellite technology, which threatens to disrupt the world in the same way social media platforms disrupted the media industry, carries both promise and peril.

Zimbabwe, however, has a choice to make.