Starlink is coming to Zimbabwe after getting approvals from the relevant regulatory body and the government. In the run-up to the issuance of the licence and now, post its licencing, many pundits and common folk alike have written off existing players in the internet service provision space, prematurely writing their obituaries.

Those sharing this persuasion, who are in the majority, anticipate that existing players will lose significant market share to Starlink largely on the back of competitive pricing, to the extent that some will completely go out of business. The huge disparity between the average prices for unlimited internet packages between Starlink and all the local players has led to the respectful conclusion that the death of existing players is inevitable.

At the outset, we see this conclusion as being overly simplistic and devoid of a broader spectrum, as it fails to recognise the potential of existing players to adjust to evolving market dynamics and retain competitiveness in some aspects, as well as the ability for some existing players to leverage synergies with related internet mobile data providers to craft innovative products that can give them an edge over competition, especially that emerging from the new entrant.

In this piece, we look at Zimbabwe’s internet service provision sector, the current setup, players' strengths and weaknesses, developments, and prospects given the arrival of Starlink. 

Zimbabwe has a total of 10 internet access providers (IAPs), with the most prominent ones being Africom, Telone, Liquid, Powertel, Dandemutande, and Telecontract. An ISP provides users access to the Internet and other related services using equipment and the telecommunication line access required to have a point of presence on the Internet for the geographic area served.

Local players rely on their own and leased fibre to provide fixed internet to respective customers across the country and these players cover over 80% of Zimbabwe’s habited area. To crunch a bit of numbers for the sector, of the total population of 16.84 million, about 5.5 million used the internet as of January 2024, which deduces to a less than 50% internet penetration rate.

Of the 5.5 million internet users over 80% access it through mobile phones, which means the internet is provided for mostly by mobile telephone operators. A larger share of the mobile broadband market is controlled by Econet.

The reason why mobile internet dominates the internet provision space is largely because of coverage. Mobile broadband has a wider coverage compared to fixed internet in Zimbabwe. fixed internet is largely limited to urban and peri-urban settlements and towns, while decades of invest- ments have allowed for the expansion of internet coverage by mobile telephone providers to remote areas.

Secondly, the cost of internet plays a role in the structure of internet provision in Zimba- bwe. Internet packages provided by mobile telephone operators are more affordable and flexible compared to those provided by fixed internet providers. This is also because, structurally mobile tele- phone operators can tailor packages and target individual users, something that the fixed internet cannot do.

Fixed internet packages are largely guided by speed and quantum of packages such as uncapped or capped, while mobile packages are broken down into tailored packages such as a value WhatsApp bundle. The flexibility of moving with the internet with the telephone also makes telephone-provided internet more appeal- ing.

There are however providers who have come up with products that close this gap for example mobile wifi operated through a dongle. This service is very popular in neighbouring South Africa. A customer enjoys broadband on the go, from the same fixed internet package at home/office, at a slightly  higher fee. The limitation is largely broadband coverage by a specific operator.

Liquid Intelligent Technologies is Zimbabwe’s largest Internet Service provider. It provides fixed internet solutions across the country. The company is a unit of Liquid Intelligent Technologies Group, registered in the UK and covering about 15 countries with its services.

The group, in turn, is a subsidiary of Cassava Technologies, following a recent reorganisation that included a private placement. Liquid, the Group, has a total coverage of 110,000 km of fibre network across multiple African countries, including Zimbabwe, which is the second-largest market after South Africa. 

Liquid has an internet bandwidth capacity of 82% in Zimbabwe, dwarfing all other players. It is trailed at a distance by Telone. Bandwidth capacity is a measure of internet capabilities measured by speed and quality. The company’s fibre coverage in Zimbabwe is by far the most elaborate, and this has been necessitated by the massive capex supported by the parent company. One of Zimbabwe’s investment inhibiting factors is the volatility in currency, currency market chaos, a lack of long-term capital, and punitive interest rates. ISPs have been expanding at a slower pace due to this lack of.

Transmitted with flashes of light through strands of glass, fibre-optic internet is the most advanced broadband technology available. Because data can travel faster across greater distances with glass than with cable, the connection speed is much faster with a 100% fibre-optic network. That means the fibre can handle a range of services, such as bundled internet, telephone, and television services, among others. That also means that it’s particularly well-suited to support emerging technologies like Augmented Reality (AR), which is becoming more popular in gaming and requires significant data utilisation. With cable, data is transferred via coaxial television cable, which is made of copper, aluminium and plastic and is designed to conduct electricity. This copper wiring is more susceptible to environmental conditions—like storms or electrical interference—than fibre-optic technology. That makes fibre a more reliable option. Download and upload speeds with cable are typically slower than with fibre, varying from 10 to 500 Mbps and 5 to 50 Mbps, respectively.

On the other hand, fibre broadband speed is at 1 Gb per second, which is 10 times the speed of standard broadband, which means downloading in seconds, seamless streaming with no buffering. However, Zimbabwe’s legacy ISP pricing and policies constrain these fibre network capabilities, achieving speed up to half the potential at varying ing price points. This is where the Starlink factor comes in. A Starlink unit in Zimbabwe can provide faster speeds than most institutions on fibre. ISPs in Zimbabwe will need to embrace the 1Gbps internet standard, which has been there for more than a decade, to not only withstand the pressure of a new player with significant capacity and attractive pricing but also to promote the Digital Economy. Access to affordable High-Speed Internet connects businesses, families, and students to better opportunities.

If the inhibitive protocols for pricing and policing are altered, the payoff will be increased speed and quality for affordable entry-level internet packages, across the board. Data shows that countries with 1Gbps internet, shown in grey on the chart, were the first to approve Starlink inter- net services. This is because preexisting providers access to even the most remote parts of the world, fostering innovation in services and technologies. This development can potentially

were already providing competitive packages at affordable rates. No wonder Starlink is not controlling even 50% of any ISP market across the world. However, this possibility is too high in Africa, which is still largely dominated by relatively poorer 2G to 4G connections and lacks sufficient coverage in remote areas. Further, due to high poverty levels, affordability is constrained as ready offerings are priced beyond reach. Local players will have to solve this puzzle to stay relevant and defend market share. Players such as Liquid will continually have to leverage group structures to solicit cheaper funding for local capex to scale up investment. The players will also have to be prepared to forego margins and implement the 1Gbps protocol to achieve competitiveness.

As a positive Starlink’s constellation of satellites has the potential to redefine the telecommunications industry, providing high-speed Internet to bridge the digital divide and unlock new economic opportunities for rural areas. Starlink’s drawback back is the exorbitant set-up cost which existing players do not have. Existing players will have to take advantage and immediately restructure their products and determine the extent of margin loss they can absorb while retaining profitability.

For Liquid, the parent company is highly geared at the moment but has shown the ability to pull debt. It also has the advantage of scale, given its fibre infrastructure, which covers a good fraction of Southern and Eastern African territory. This connection allows it to have a low cost of goods sold, therefore giving room to margin loss absorptiontion. Liquid is also favoured with experience dealing with Starlink in some countries where the latter has been operational, such as Zambia, that can help it deal with what is coming.