Starlink is a satellite internet constellation operated by SpaceX that utilises thousands of small satellites in low-Earth orbit (LEO) to deliver high-speed, low-latency broadband internet, particularly to remote and rural areas lacking internet coverage.
The internet service provider is active in twenty-five (25) African nations and has applied for licenses in other countries, including Namibia. Starlink possesses some benefits and challenges for the industrialisation ambition of developing nations, such as Namibia.
The benefits could be stable coverage and an enhanced value chain. The challenges could be the lack of local content in manufacturing and unfair competition.
PROS
One of the key benefits of Starlink is the extensive internet coverage, which directly supports the national development agenda, such as Vision 2030 and National Development Plan 6 (NDP6). Local firms can adopt more advanced production equipment, which can boost their production capacity and enable them to diversify their production units across the country.
The innovation would flourish, whereby the firms will be able to conduct R&D to improve their manufacturing processes, allowing the development of quality products that can compete in both local and international markets.
Namibia’s ambition to add value to its natural resources could be optimised. Thus, the supply chain management would be improved by reliable internet connectivity.
The worldwide reach makes it possible to follow shipments of goods in real time throughout the whole supply chain.
This visibility supports more effective “just-in-time” manufacturing processes by assisting firms in minimising stockouts, optimising inventory levels, and streamlining operations.
CONS
The lack of local manufacturing of the components for Starlink; instead they will be manufactured in the United States according to Starlink. There will be no local employment creation derived from manufacturing of components since they will be imported as finished products from the United States.
The manufacturing of Starlink’s components requires high-tech production equipment, which is quite pricey. However, there is still an opportunity for the government and Starlink to explore an opportunity for some of the components where Namibia has existing capability to produce them locally.
The unfair competition, Starlink internet coverage could be the cheapest, and this will drive out of the market the local internet providers, such as Telecom Namibia, Mobile Telecommunication and Connectivity (MTC), and Paratus.
This will result in the massive job loss from those Local Service Providers; not all workers will be able to be observed by Starlink. The employees who might be observed by Starlink are those working at the Client Service Department for customer support only, and fewer for installation, since the company’s products do not require complicated installation.
There is no need to dig a line for the cable connections, the products are wireless can be easily installed by the customers; maybe they can require employees to assemble the kit. That means all the labourers and some of the technicians will be required.
COULD STARLINK BE ENDORSED TO OPERATE IN NAMIBIA
The NDP6 aims to create 80,000 quality jobs by 2030, primarily through the manufacturing sector, with one key contributor being the enhancement of mineral beneficiation.
Starlink and the Ministry of Industries, Mines and Energy are therefore required to identify some of the components or products that can be manufactured locally, such as boxes (kits), cables, and other items where local entities have the capacity.
This will increase employment opportunities in the manufacturing sector as outlined in NDP6. Regarding fair competition, the government should provide fiscal or tax incentives to local service providers by lowering taxes and reducing or exempting customs duties on large equipment or machinery importation, which aims at enhancing productivity. Such measures would enable the Local Service Providers to compete effectively with Starlink, helping to prevent retrenchments and, in a worst-case scenario, industry collapse.
Written by Oscar Festus, Economist holding a B. Tech and an Honours degree in Economics from NUST, and an MBA in Management Strategy from UNAM. The views expressed here are his own and do not necessarily reflect those of his employer.
This article was first published here in partnership with The Brief