More Competition Is Healthy

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Elon Musk met with South African President Cyril Ramaphosa today which can only be about Starlink. Up till now Starlink has been rejected due to the local rule stating it has to be 30% black owned. This is how things work here and the chances are Cyril my have taken that 30% for himself. I kid you not considering Cyril was at the front of the McDonalds queue when it entered SA and he is the biggest franchise owner.

Starlink coming to South Africa would be very good news as the ore competition the market has the better it is for the consumer. Our household and business is already on it's 3rd service provider having dropped two on this list due to poor service.

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These prices re all so similar so it tells you the base price is controlled by a monopoly ad those companies have been protected by having no competition.

Most of the service providers charge the same monthly fee which kind of shows it is a closed shop and the real money is made supplying these service providers. I would guess these companies are still making a decent profit having paid to be certified suppliers, but the lions share of the profits has to be the ones owning the fiber network.

When Starlnk launches in SA one would have to pay for the unit which from reports suggest that would cost in the region of R14 999 or $800. The main benefit is that the monthly fee is far lower and one should expect to save anywhere from R300-R500 which means your savings pay for your Starlink cost within 30 months.

What this also means is that the competition has now had their prices capped and the yearly increases have been placed on hold. For all existing fiber service providers they now have to reduce their prices by nearly 40- 50% or they are no longer competitive. That has to be seen as a win for the consumers and why having choices is great.

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The other benefit is not relying on the fibre which is fed from Europe via the undersea cables which tend to break on a fairly regular basis. Starlink obviously uses satellites so this would not affect that system. The fiber business is a huge business with a list of companies involved offering different services taking a slice of the pie.

Look at Telkom the State Owned Enterprise telecommunications company owns the last mile access and the only reason why that company is still in business and controlling the last mile in fiber saved them. Very few houses have land lines any more and it is only businesses that are left. Whatever happens when Starlink launches in SA there is going to be some massive upheavals with many companies having their turn over cut drastically.

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