Starlink to face possible financial penalties for increasing tariff without NCC approval

Starlink, the satellite internet service owned by Elon Musk’s SpaceX may face possible regulatory sanctions such as a financial penalty for increasing its internet service tariff without obtaining regulatory approval.

Section 108 and 111 of the Nigeria Communication Act, 2003 mandates all licensees to obtain regulatory approval before they make changes to their tariff plans. The Act also grants the Nigerian Communications Commission (NCC) which is the Nigerian telecoms industry regulator the power to impose penalties.

Recall that social media went agog following an announcement by the internet service provider that the monthly subscription fee will increase from N38,000 to N75,000, effective immediately for new customers while new users will also face a higher cost for the Starlink kit (hardware for installation), which will now be priced at N590,000, a 34 percent increase from the previous price of N440,000.

Reacting to the development, the Director of Public Affairs for the NCC, Reuben Muoka, revealed that the commission has commenced a pre-enforcement action on Starlink over the unapproved tariff hike on the 3rd of October, 2024.

Recall that Starlink is currently Nigeria’s third-largest Internet Service Provider (ISP) by subscriber count as of the fourth quarter (Q4) of 2023.

Data indicates that the number of active customers rose to 23,897 in Q4 2024, positioning it among the leading ISPs in the nation.

In the previous quarter (Q3 2023), the Nigerian Communications Commission (NCC) reported that Starlink had 11,207 customers, reflecting a significant 113 percent increase in subscribers from one quarter to the next.

Before Starlink’s recent tariff increase, telecom operators in Nigeria, represented by the Association of Licensed Telecommunications Operators of Nigeria (ALTON) and the Association of Telecommunications Companies of Nigeria (ATCON), had been advocating for a tariff review.

They noted that the last adjustment in rates occurred 11 years ago. These operators argue that the telecom sector is unique in not having updated its pricing, despite ongoing inflation and other economic factors that justify a price increase.