US$1.1million license fee chases Starlink out of Zimbabwe

0Shares

Liquid and Tel One bosses reveal plans to stay in business

A cloud of uncertainty hangs over the highly anticipated launch of Starlink in Zimbabwe, as the global satellite internet provider has yet to settle its US$1.1 million licence fees with the Zimbabwean government. This revelation comes just months after President Emmerson Mnangagwa personally announced his government’s approval of Starlink’s operations in the country, raising questions about the future of the service’s arrival.

According to TechnoMag, Starlink has confirmed its failure to pay the required licence fees, citing this as the reason for the delay in launching its service in Zimbabwe. “We have applied for a network licence and application licence at a cost of $1.1 million USD, this excludes spectrum fees as part of the bundle,” a Starlink spokesperson stated.

The company has indicated that they are ready to launch once the payment is made, with all other logistical hurdles cleared. However, Starlink has remained tight-lipped on the timeline for settling the licence fees and the impact of these fees on their overall profitability in Zimbabwe.

The $1.1 million licence fee covers a 20-year tenure, but Starlink will also be subject to annual fees and a portion of their profits deducted as USF (Universal Service Fund) payments. This raises concerns about the financial viability of Starlink’s operations in Zimbabwe, particularly in a market already saturated with local telecoms providers.

The Zimbabwean government had initially announced its approval of Starlink’s operations on the 25th of May, with a projected launch date set for the third quarter of this year. However, with the licence fees remaining unpaid, the launch date is now shrouded in uncertainty.

Elon Musk, the CEO of SpaceX, which owns Starlink, expressed surprise at the government’s approval of the company’s operations in Zimbabwe, simply tweeting “Yaaay!” This seemingly nonchalant response has further fuelled speculation about the seriousness of Starlink’s commitment to the Zimbabwean market.

Local Telecoms Brace for Impact

Meanwhile, Zimbabwe’s telecoms industry is bracing for a radical shake-up as Starlink’s arrival looms. The prospect of high-speed internet reaching even the most remote areas of the country has sent ripples through the sector, prompting local players to strategize and adapt.

Business Times can report that some local telecom companies have already begun to cut the price of their internet packages in an effort to stay competitive.

Liquid Intelligent Technologies, the country’s largest internet access provider with an 80% market share, has reduced its unlimited internet packages by as much as 45%. This move, according to Lorreta Songola, the regional chief commercial officer for Central Africa at Liquid Intelligent Technologies, is aimed at enhancing data affordability for Zimbabweans.

“Competition is healthy as this would be an opportunity for Zimbabweans to enjoy competitive services and pricing from all the players in the sector,” Songola said. “We already operate alongside StarLink in our other regional markets like Zambia, and we are all operating well.”

TelOne, another major player in the Zimbabwean telecoms market, has also announced plans to introduce flexible pricing models to remain competitive. Hebert Nkala, CEO of TelOne, emphasizes the company’s commitment to internet affordability as low-earth orbit (LEO) technology becomes more accessible in the country.

“We will introduce flexible pricing models to remain competitive. If we need to give discounts on certain products, we will do so, so that we remain in the game. At the end of the day, we cannot offer prices that are below our costs, so where we do have flesh to cut in terms of pricing, then so be it. Our goal is to attract and retain customers with competitive pricing,” Nkala said.

Awaiting the Starlink Launch

The delay in Starlink’s launch has left many Zimbabweans in a state of anticipation. The company’s fast speed and ability to reach previously unreachable areas have made its kits highly sought after, even before its official launch.

However, the lack of clarity on the licence fee payment and the potential impact on Starlink’s financial viability in Zimbabwe raises concerns about the future of the service in the country.