Kenya to Hike Starlink and ISP Licensing Fees by 1000%
Satellite internet providers, including Elon Musk’s Starlink, are bracing for a dramatic increase in licensing fees in Kenya. The Kenya Communications Authority (CA) has proposed a revision of the Satellite Landing Rights (SLR) license, which ISPs must secure to operate in the country. If approved, the 15-year operating license will skyrocket by 1000%, jumping from $12,302 to $115,331. Additionally, ISPs will be required to pay an annual fee equal to 0.4% of their total revenue.
Kenya Communication Authority’s Justification
The CA explained that the proposed changes aim to expand satellite internet coverage and promote technology neutrality. The goal is to allow investors to land signals using any technology, removing longstanding barriers to market entry and operation.
In a statement, the CA emphasized:
“This change aims to ensure technology neutrality and allow investors to land signals using any technology to remove certain market entry and operational barriers identified over time.”
Under the revised guidelines, satellite providers will also gain access to critical resources like tracking facilities, telemetry systems, terrestrial cables, and the ability to conduct space research. Providers must adhere to a geographical scope principle, offering services in at least three Kenyan counties.
Starlink’s Rapid Growth in Kenya
Since its entry into Kenya in July 2023, Starlink has seen explosive growth in the region. By December 2024, the company had grown its user base by over 1000%, reaching 8,500 subscribers.
According to Kenya’s Communications Authority, satellite internet subscriptions have soared:
- In June 2024, satellite data subscribers totaled 8,324, a 73.1% increase from March.
- In June 2023, just before Starlink’s launch, the number of satellite subscribers was a mere 405.
- By December 2024, 96.9% of satellite users subscribed to speeds between 100 Mbps and 1 Gbps.
The growth reflects Kenya’s increasing demand for high-speed internet and the effectiveness of Starlink’s affordable plans, despite challenges in meeting network capacity in densely populated areas.
Challenges in Nairobi and Beyond
Starlink’s rapid adoption in Kenya has not been without issues. In November 2024, the company suspended new subscriptions in Nairobi and six other counties due to network overload. The company cited excessive demand, stating:
“Too many users are trying to access the Starlink service within Nairobi, and there isn’t enough bandwidth to support additional residential or roaming customers at this time.”
Starlink’s affordable internet plans, which were sold out, contributed to the overload. Only premium plans costing over Ksh130,000 per month remained available.
Customers expressed frustration over the lack of roaming service plans, which could have bypassed the restrictions. Starlink responded that roaming services are not yet available in Kenya but assured users that the team is working to restore services in affected regions.
Implications for ISPs and the Internet Landscape
The proposed fee hike comes at a time of growing reliance on satellite internet in Kenya. The CA aims to address the surging demand for reliable, high-speed connectivity while maintaining regulatory oversight. However, a 1000% increase in licensing fees could deter new entrants and strain existing providers like Starlink, potentially impacting service affordability.
Despite these challenges, the country’s internet infrastructure continues to grow. By June 2024, Kenya’s total international internet bandwidth capacity had risen by 2.4% to 21,244.338 Gbps, with undersea bandwidth utilization increasing by 31.3%.
Key Takeaways
- Licensing Fee Hike: The 15-year Satellite Landing Rights (SLR) license fee for ISPs will increase from $12,302 to $115,331, with an additional 0.4% annual revenue fee.
- Starlink’s Growth: Starlink’s subscriber base in Kenya grew over 1000%, reaching 8,500 users by December 2024.
- Challenges in Nairobi: Network overload led to a suspension of new subscriptions in the capital and six counties, with only premium plans remaining available.
- Broader Implications: While the fee hike aims to boost satellite coverage and innovation, it risks discouraging investment and raising costs for end-users.
As Kenya balances its ambitions for expanded satellite internet coverage with the realities of regulatory costs, providers like Starlink face new hurdles in maintaining their rapid growth. The coming months will determine whether these changes foster innovation or create barriers in one of Africa’s most dynamic internet markets.
