Starlink Halts Residential Kit Orders in Nigeria Amid Price Increment Approval Issues

Elon Musk’s Starlink has temporarily suspended orders for its residential internet kits across Nigeria. The suspension, the company clarified, is tied to ongoing efforts to secure approval from the Nigerian Communications Commission (NCC) for a recently proposed price increase.

While residential kits are currently unavailable, Starlink’s Business Plan remains operational. The high-end plan offers subscriptions at N159,000 per month, significantly higher than the N38,000 per month charged for the Residential Plan.

In a statement addressing the suspension, Starlink said:

“We’re committed to providing high-speed internet in Nigeria and are working closely with regulators to make adjustments that will improve the customer experience. Until these changes are approved, we are placing new Residential orders on hold.”

Starlink’s Growing Demand and Challenges

Since its launch in Nigeria in January 2023, Starlink has witnessed a surge in demand, particularly in urban centers such as Lagos, Abuja, Port Harcourt, Benin City, and Warri. Earlier, the company paused new orders in these cities, citing full capacity.

However, the current suspension extends across Nigeria and is directly linked to Starlink’s proposed price hike. The move comes amidst heightened scrutiny from the NCC, which had previously flagged Starlink’s actions as non-compliant with regulatory protocols.

Controversial Price Hikes

On September 30, 2024, Starlink announced:

A 97% increase in monthly subscription fees for Residential Plans from N38,000 to N75,000.
A 34% increase in hardware (Starlink kits) from N440,000 to N590,000 for new users.

The company attributed the changes to "excessive inflation."

The announcement sparked backlash within Nigeria’s telecom sector. Local operators accused the NCC of bias, claiming that Starlink was allowed pricing flexibility denied to domestic providers.

NCC’s Response

The Nigerian Communications Commission quickly refuted Starlink’s actions, stating that the price adjustments violated the Nigerian Communications Act, 2003, particularly Sections 108 and 111, and the company's license terms.

NCC’s Director of Public Affairs, Dr. Reuben Muoka, announced that pre-enforcement actions against Starlink had been initiated. He emphasized that the regulator had not approved the price hike and that Starlink’s unilateral changes were a breach of established tariff regulations.

Starlink’s Position

Following NCC’s intervention, Starlink suspended the price increase. However, the company warned that continued regulatory delays could jeopardize its ability to provide high-speed internet in Nigeria.

In a statement to customers, Starlink noted:

“Without these approvals, our ability to continue delivering service is at risk.”

Starlink’s Growing Footprint in Africa

Starlink’s reach is not limited to Nigeria. In Zimbabwe, the company’s terminals in the capital city of Harare were sold out just two months after obtaining operational approval. This reflects the growing demand for reliable internet services in underserved African markets.

Key Takeaways

Suspension of Residential Kits: Starlink has paused orders for residential internet kits across Nigeria until regulatory approval is secured for price increments.
Operational Business Plan: Starlink’s Business Plan, priced at N159,000/month, remains available.
Regulatory Scrutiny: NCC has flagged Starlink’s price adjustments as non-compliant with tariff regulations, prompting enforcement actions.
Inflationary Pressures: Starlink cites inflation as a driving force behind its proposed price hikes.

Outlook

Starlink’s suspension of residential kit orders underscores the challenges of operating in a regulated market like Nigeria. As the company navigates regulatory hurdles, the outcome of its negotiations with the NCC could have far-reaching implications for its future in one of Africa’s largest internet markets.