Starlink now faces higher licence fees as Kenya targets satellite providers

The government seeks to raise licence fees for satellite communication service providers, a move that will see big companies like the American satellite internet firm Starlink pay more to operate in Kenya.

In new proposals published by the Communications Authority of Kenya (CA) in December, Kenya seeks to review the Satellite Landing Rights (SLR) licence it requires these companies to obtain to set up shop locally.

SLR licensees acquire rights to land their satellite signal in Kenya.

Now, CA seeks to raise the SLR initial licence fees from the current $12,500 (about Ksh.1.6 million) to Ksh.15 million.

The regulator further wants to introduce an annual operating fee of Ksh.4 million or 0.4 per cent of the companies’ annual gross turnover, whichever is higher.

The proposals are contained in the Review of the Telecommunications Market Structure 2024, which is out for public scrutiny.

Stakeholders have until January 23 to submit their comments for the proposed regulations, which CA plans to implement in the 2025/2026 financial year.

CA says the review is meant to address and remove “certain market entry and operational barriers identified over time.”

The regulator seeks to merge the Submarine Cable Landing Rights (SCLR) licence, which it gives to companies that lay submarine cable systems passing under the sea into the mainland, with the SLR licence to create a new category called the Landing Rights Licence (LRL).

The LRL licence will apply to anyone seeking to set up terrestrial cables that only transit Kenya destined to neighbouring countries, satellite hubs exclusively serving clients outside Kenya, and other satellite services like telemetry, space research and meteorological aids.

“This change aims to ensure technology neutrality and allow investors to land signals using any technology. Furthermore, this new Licence category will expand its scope to accommodate investors,” says CA.

In addition to the initial licence fee and annual operating fee, companies will be required to pay a Ksh.5,000 application fee for the licence whose term is 15 years.

The new proposals come in the backdrop of protests by some existing players in Kenya’s internet market such as Safaricom over the entry of satellite internet in the country.

Starlink, owned by the world’s richest man Elon Musk, launched in Kenya in July 2023, offering competition to companies including Safaricom, Telkom, Faiba and Zuku, who use fibre-optic technology.

The American company has increasingly offered competitively priced internet packages and better speed, which has seen it become the country’s tenth-largest ISP.

As of June 2024, CA data showed Starlink had over 8,000 subscribers.

The company in November suspended new subscriptions in Nairobi and neighbouring Kiambu, Machakos, Narok, Murang’a and Nakuru regions, citing a network capacity overload due to increased demand.

In its June 2024 protest to the Kenyan government, Safaricom wrote to CA asking it to re-evaluate its decision to grant licences to satellite internet providers.

The company, which dominates the local fixed broadband internet market (36.7%), urged the regulator to review its decision to grant independent licences to satellite service providers, warning of threats of illegal connections and what it called harmful interference to mobile network operators. 

“We propose that the CA instead consider mandating the satellite service providers to only operate in Kenya subject to such providers establishing an agreement with an existing local licensee,” Safaricom said.

“Co-existence with mobile networks will not be possible and in the absence of effective management and co-ordination, satellite provided service will cause interference to mobile networks, which will ultimately adversely affect end users and related socio-economic benefits.”

While CA did not publicly respond to Safaricom’s request, President William Ruto in September praised Starlink's entry into Kenya for creating competition, which he said has caused existing players to provide better services.

Safaricom CEO Peter Ndegwa was then quoted by Bloomberg News as saying the telecoms giant, which in 2023 said it was working towards introducing satellite internet services, was open to a “partnership” with Starlink.

He would later tell NTV that "there is no deal on the table yet." 

Other satellite service providers operating in Kenya are U.S.-based Vizocom and Viasat, Skynet by Telkom and NTvsat from Germany.