SpaceX Starlink Emerged as Nigeria’s Third-Largest ISP in Q4 2023

Elon Musk’s internet company, Starlink, has rapidly ascended to become Nigeria’s third-largest Internet Service Provider (ISP) by subscriber number in the fourth quarter (Q4) of 2023, according to the latest data released by the Nigerian Communications Commission (NCC).

The NCC report reveals that Starlink’s active customers in Nigeria surged to 23,897 by the end of Q4 2023, marking a significant 113% increase from the 11,207 customers reported in Q3 2023. This swift growth has positioned Starlink as one of the leading ISPs in the country, surpassing many long-established local providers.

Despite Starlink’s impressive growth, Spectranet and FiberOne maintained their positions as the top two ISPs in Nigeria. Spectranet leads the market with 113,869 active customers, followed by FiberOne, which recorded 27,000 active users by the end of 2023.

The NCC’s data shows that out of 245 companies licensed as ISPs in Nigeria by the end of 2023, only 106 had active customers during Q4. These 106 ISPs collectively served 262,206 active customers, a number that pales in comparison to the 163.8 million active internet subscriptions managed by the country’s four major mobile network operators: MTN, Airtel, Globacom, and 9mobile.

Starlink’s Competitive Edge

Starlink’s meteoric rise in the Nigerian ISP market can be attributed to several key factors:

1. Widespread Availability: Starlink’s satellite internet service has made it a viable option for customers in remote areas with poor internet infrastructure. This has significantly broadened its customer base beyond the reach of traditional ISPs.
2. Customer Interest and Demand: Since its announcement in January 2023, Starlink has generated high interest among Nigerians eager to switch from their current service providers. This interest was evident even before its official launch, with many Nigerians pre-ordering Starlink hardware in 2022.
3. Pricing Strategy: In April 2024, Starlink announced a 45% price reduction on its internet router, slashing the price from N800,000 to N440,000. Although the monthly subscription fee remains at N38,000, the lower entry cost has made Starlink more accessible to a broader audience.
4. Reliable Service: Starlink’s reputation for reliable service and efficient customer support has set it apart from many local ISPs, which have struggled with service issues and customer dissatisfaction.

Challenges for Local ISPs

Local ISPs in Nigeria have faced several challenges that have impeded their growth and customer satisfaction, including an unfriendly business environment, operational hurdles, and infrastructure limitations. These issues have created an opening for Starlink to quickly gain a substantial market share.

With its current trajectory, many industry analysts believe it is only a matter of time before Starlink climbs to the number one spot among Nigerian ISPs. Its rapid expansion and innovative approach are expected to continue driving growth, potentially reshaping the competitive landscape of the Nigerian internet service market.

Starlink’s emergence as Nigeria’s third-largest ISP within a year of its official launch underpins the transformative potential of satellite internet technology in bridging connectivity gaps, especially in underserved regions. The company’s satellite internet is expected to play a crucial role in the evolution of Nigeria’s internet services, helping to achieve the government’s push for 100% internet penetration.

As of 2022, Nigeria had approximately 84 million internet users, a figure projected to grow to 117 million by 2027. In terms of internet penetration, over 38 percent of Nigeria’s population had access to the internet in 2022. This data which reflects the increasing digital connectivity in the country, also underlines a huge gap in internet penetration. The internet penetration percentage is expected to rise from 38 percent to 48 percent by 2027.