Vodacom has signed an agreement with Elon Musk’s Starlink that will see SA’s largest mobile operator expand its network coverage while also selling the satellite communication company’s equipment to businesses.
The deal excludes coverage in SA where Starlink is yet to get an operating licence.
On Wednesday, Vodacom said it had concluded an agreement with the world’s largest satellite broadband provider “to deliver high-speed, low-latency broadband internet to millions of businesses across Africa and to expand rural network coverage”.
While a great deal of investment is going into fibre, as evidenced by Vodacom and Remgro’s Maziv merger, that is primarily happening in large cities and metros. In far-flung areas satellite is the cheapest and most reliable form of access while mobile and fibre internet access are scarce in these places.
Through this agreement, Vodacom plans to integrate Starlink’s network capacity into its own, which would help to connect rural and outlying areas.
Such connectivity is important for remote hotels, schools, farms, mines, health centres and communities.
In addition, Vodacom will be allowed to resell Starlink equipment and services to enterprise and small business customers in Africa.
Operators have struggled to justify the cost of building expensive infrastructure in sparsely populated and low-income regions, making satellite the obvious alternative.
The cost to communicate using satellite technology has dropped more than 70% over the past decade making its use more accessible.
The deal adds to Vodacom’s list of partners on satellite.
In September 2023, the group signed a partnership with Amazon’s low Earth orbit satellite (LEO) communications initiative, Project Kuiper.
With its UK-based parent, Vodafone, the group said it was looking to plug the holes in areas that lack 4G and 5G coverage, using Amazon’s network of satellites.
Vodacom group CEO Shameel Joosub said the move “accelerates our mission to connect every African to the internet”.
The group is also hoping to use this deal to push its goal to grow its customer base to 260-million by 2030.
“Low Earth orbit satellite technology will help bridge the digital divide where traditional infrastructure is not feasible and this partnership will unlock new possibilities for the unconnected.”
Despite its wide use in many parts of Africa, satellite technology has major drawbacks due to the long distances that signals need to travel between satellites and antennae on the ground.
The two major disadvantages have to do with latency (the time it takes for signals to reach their destination) and limited bandwidth (the amount of data that can travel through a signal). Fibre and mobile are therefore seen as superior forms of access.
But the technology has improved greatly, giving telecom companies confidence to expand their offering.
Traditionally, higher-orbiting satellites have been the ones providing capacity, using large antennae on the ground. In recent years, the entry of Starlink into the market has pushed up interest and adoption of the technology.
Vice-president of Starlink Operations at SpaceX Chad Gibbs said: “Starlink is already serving people, businesses and organisations in 25 African countries. By collaborating with Vodacom, Starlink can deliver reliable, high-speed connectivity to even more customers, transforming lives and communities across the continent.”
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