Update: NCC withdraws Starlink’s license suspension announcement

The Nigerian Communications Commission (NCC), has withdrawn its earlier statement to take appropriate enforcement measures against internet connectivity provider Starlink over its recent hardware and monthly subscription price increase.

The Commission’s Director of Public Affairs, Dr Reuben Muoka, who shared the NCC’s position initial statement retracted the statement saying that the statement was in error. “Please ignore my response above. My statement was an error of assertion,” he said.

In a statement this morning, the telecoms regular indicated that Starlink’s unilateral price review can erode the telecommunications industry’s regulatory stability.

Last week, we reported that Starlink increased the price of its hardware from N440,000 to N590,000. The increase in its router hardware prices represents a seventy-four per cent increase from its N4400,000 prior cost. In an email sent to subscribers this morning to announce the price changes, the Elon Musk-owned company blamed the increase on “excessive levels of inflation”.

The company has also announced an almost one hundred per cent increase in its monthly subscription. For example, the Standard (Residential) package which previously cost N38,000 will now cost users N75,0000.

The NCC also noted that Starlink’s decision to unilaterally review its subscription packages upwards did not receive the approval of the NCC. “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”, he said.

According to him, Starlink’s action also contravened Sections 108 and 111 of the Nigerian Communications Act, 2003, and the agency’s license conditions regarding tariffs.

Section 108 of the Nigerian Communications Act 2003 (NCA) gives NCC the authority to regulate telecom tariffs. The Act dictates that no NCC licensee can charge for services until the NCC approves the tariff rates and charges.

“Holders of individual licences shall not impose any tariff or charges for the provision of any service until the Commission has approved such tariff rates and charges except as otherwise provided in this Part,” the Act says. 

Similarly, Section 111 of the Act stipulates that the Commission shall prescribe and enforce appropriate financial penalties upon any holder of an individual licence who exceeds the tariff rates duly approved by the NCC for the provision of any of its services, notwithstanding any other provision of the law.

Starlink’s floating price regime in Nigeria

Recall that this is the third time the satellite internet service provider has adjusted its prices in Nigeria. Recall that it announced a price reduction for its hardware in Nigeria in October 2023. The cost of the Starlink kit, essential for accessing the service, was slashed by 21% from ₦378,000 to ₦299,000.

When Starlink officially announced its presence in Nigeria in January 2023, the company, which initially quoted its prices in dollars at $600 for the hardware and $43 for the subscription, changed to naira upon its official announcement.

As of February 2024, the router was been sold for N378,000. An increment regime implemented in early March saw a price jump to N800,000. This was evidently in response to the rapidly declining value of the naira to as high as N1900 to a dollar.

When the naira appreciated from record lows close to N2,000/$ to N1230.61/$ on the official window in April, the company slashed the hardware price to N440,000.

It is unclear if the price appreciation is replicated across other markets or if it is a decision that uniquely affects Nigeria. However, some industry experts have expressed concerns that the internet service that Starlink provides may end up becoming a luxury that can only be owned by high to middle-income earners in developed countries.

For example,  Diseye Isoun, an expert in African broadband development noted that the number of people who can afford Starlink in Nigeria is still very slim. For him, the satellite company is only serving a middle to rich upper-class Nigerian market.

“They are serving individuals and businesses that can afford it, a few government agencies and generally people unsatisfied with their current service. Even the quote-unquote upper middle class has to put together 300 to 400 thousand to acquire the devices. Then, they have to pay 38,000 for the monthly subscription. These costs have to compete against other costs like school fees, holiday vacations, a bicycle for the child and more”, he explained.