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Giant, Rival Telcos Join Forces to Battle Starlink in Rural Africa

7 months ago
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Giant, Rival Telcos Join Forces to Battle Starlink in Rural Africa

Two largest rival mobile operators – Vodacom and Orange – have formed a joint venture to put up solar-powered cell towers in competition with satellite internet provider, Starlink, for customers in less densely populated areas without mobile network access.

Conrad Onyango, bird story agency

As Elon Musk’s Starlink rapidly gains popularity and expands across Africa, giant telcos are now collaborating to cut down on high costs associated with entering and operating mobile base stations in rural areas of the continent.

These mobile network operators are beginning to establish joint ventures that will enable them to share expenses related to the rollout and managing of cell towers in rural regions – marking the next battleground between them and internet service companies.

Recently, Vodacom and Orange announced they are collaborating to create a “rural tower partnership” in Africa – that will see them jointly build, own, and operate solar-powered mobile base stations in underserved areas, starting with DR Congo.

“The initiative will extend network coverage and enable access to telecommunications and mobile financial services to up to 19 million people in less densely populated rural communities, reinforcing their commitment to bridging the digital divide and driving inclusive growth,” the telcos said in a joint statement.

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Entry of internet providers like Starlink have upended competition landscape for telcos – on higher internet speeds, prices and coverage base because of their reliance on satellite – a competitive advantage over traditional telecom operators – allowing them to extend network coverage to remote areas without the need for a base station.

Cost of putting up base stations and sustainability powering and running them in rural areas has been particularly a major headache for the operators.

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GSMA’s recent report titled “Rural Renewal: Telcos and Sustainable Energy in Africa” lists low population density, rising energy costs, expenses related to backhaul infrastructure, and the necessity for strong towers as key factors that strain the operators financially, hindering many from expanding coverage in rural areas.

“A base station in a remote rural area costs, on average, 35–40% more to run than one in a city, and this can be even higher in some countries,” according to the GSMA report.

According to the report, Africa has around 300,000 mobile sites. of these, 68% of base stations are on-grid, 7% are powered by mini-grids, 9% are on bad grids and 16% are off-grid. This means 32% of mobile base stations – approximately 96,000 – are either off-grid or on bad grids.

Across Africa, 40% of the mobile base stations are in rural or remote areas.

In rural Africa, mobile network services are either too expensive or unreliable- two key aspects that are making Starlink become a choice for internet service provision.

To navigate the rural network challenges, Vodacom and Orange have pledged to jointly construct up to 2,000 new solar-powered base stations in the Democratic Republic of Congo (DRC), one of Africa’s largest countries, over the next six years, using 2G and 4G technologies.

The two rival companies have initially committed to put up 1,000 sites after which Orange and Vodacom may scale the project by a further 1,000 towers.

“The completion of this joint venture remains subject to the approval of administrative, regulatory, and competition authorities,” according to the joint statement.

Their first joint base station is expected to start operating in 2025, where the two telcos will be sharing active and passive equipment owned by the joint venture as anchor tenants for an initial term of 20 years.

As part of the agreement, the joint venture will open up the passive cell towers for other mobile network operators to ramp on.

“Collaborating with Vodacom by sharing both passive and active infrastructure is the most effective approach to fulfilling our commitment to accelerating connectivity access for everyone, including rural areas, while minimizing our environmental footprint,” said Orange Middle East and Africa Chief Executive Officer, Jérôme Hénique.

Orange operates in 18 countries across Africa and the Middle East and had 160 million customers by the end of September 2024 while Vodacom’s operations in South Africa, the DRC, Egypt, Ethiopia, Kenya, Lesotho, Mozambique, and Tanzania have attracted a customer base of 210 million.

Starlink, which also relies on satellites to bridge the continent’s connectivity gap, has grown significantly in popularity in Africa since its launch in 2019. By 2024, it was forced to pause new subscriptions across five out of the 16 countries where it operates, due to network overload, especially in major cities and urban centres.

As of November 2024, Starlink had sold out its service in major cities across Nigeria, Kenya, Madagascar, Zambia, and Zimbabwe.

Starlink is also advancing its entry into the Direct-to-Cell network and plans to launch a constellation of hundreds of satellites to enhance this initiative.

The satellite internet provider targeting to connect users through standard LTE/4G protocols on their existing phones, without requiring new devices, upgrades, or special apps, has confirmed significant investments in this project for 2025.

“We look forward to expanding our testing to include greater coverage; launching hundreds of satellites to enable our text constellation; working toward our voice, data, and IoT constellation in 2025; and expanding our global footprint,” said Starlink in a statement on its website.

Mobile network operators Vodacom and MTN Group are also in the race to make a foray into the Direct to Cell network to enhance their terrestrial mobile networks – for rollout to remote areas.

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