Elon Musk applied for licensing to provide Tanzania with satellite Internet services; that was last year. This year, the Tanzania Communication Regulatory Authority (TCRA), has said, Musk’s Starlink, the company that provides the satellite internet services, needs only to complete the required procedure to set up shop in the country.
This response by Tanzania to Elon Musk’s application has stirred up controversy on Twitter with executives from both sides raising allegations and counter-allegations.
On Elon Musk’s side, you have allegations of foul play by existing telecom giants in Tanzania lobbying to keep his Starlink from entering the market.
On Tanzania’s side, you have authorities playing it safe with a clean-cut statement saying Elon Musk’s Starlink needs only to comply with the country’s regulation requirements, otherwise, Starlink is more than welcome to enter the market.
If the Twitter exchange is anything to go by, we have a very good glimpse of what is unfolding in the executive situation rooms on both ends.
“We would love to (operate in Tanzania). We are just waiting for the government’s approval,” said Elon in a tweet.
Elon Musk supporters: Business tycoon Mike Coudrey twitted: “Make Starlink available in Eastern Africa, specifically Tanzania so people can have a higher access to information and build a better future.”
Tanzania Government: Tanzania Minister for Information, Communications, and Information Technology Nape Nnauye twitted the country’s readiness to welcome Elon Musk and Starlink into the Tanzanian and East African market. However, according to him, Tanzania has already given Elon Musk and Starlink their ‘to do list and is waiting for them to comply.
“We received the applications on October 6 last year. A number of issues are pending following our last meeting on January 27, 2023.”
“You will recall that you were supposed to submit the required documents to process the application according to the laws and procedures of this land. We are waiting and ready,” Dr. Jabiri Bakari, The Director General of Tanzania Communication Regulatory Authority (TCRA), twitted a reply to Elon Musk:
“You know, Starlink’s satellite internet involves much more issues than the way it is portrayed on social media platforms. It involves different particulars that need different requirements from the regulator in line with the type of license being applied for,” he told local media.
Elon Musk’s lobby is alleging that the major telecoms already operating in the country are lobbying against Starlink.
Referring to the telecom giants Airtel, Tigo, Vodacom, and Halotel, the big players in Tanzania, Mike Coudrey twitted: “Rather than improving their own services, they will try to inhibit new availability in the market.”
Tesla: Tanzanian mines to fuel the car of the future
Tanzania, the sixth largest producer of gold in Africa, is also rich in Nickel and Cobalt, key minerals in powering electric vehicles; an obvious interest for Elon Musk and Tesla.
It is very expensive, even for the telecom giants, to invest in telecommunication infrastructure like towers in Africa’s remote areas which feature some of the world’s roughest terrain.
That is a problem but not for Elon Musk. His Starlink internet provision does not rely on grounded communication infrastructure. With more than 3200 satellites in the Lower Earth Orbi, Starlink has the muscle to bypass land communication infrastructure and provide satellite-powered internet from space.
SpaceX, the Starlink parent company, manages this constellation of over 3200 satellites. Using this army of satellites, Elon Musk is doing a goodwill drive to ‘bring broadband to the most remote and landlocked areas.
Should Starlink and its captain successfully navigate the alleged ‘shark’ infested rough waters of the East Africa communication industry, then Musk will almost solely help the region, and the World, achieve the ambitious global Sustainable Development Goal of universal internet access by 2030.
However, this goodwill to provide communication access to the World’s neediest communities is watered down by allegations of correlated motives to access Tanzanian cobalt and nickel mines.
Tesla, one of the world’s most-sold electric car brand, needs cobalt and nickel to keep up its current profit trajectory, a very steep climb, as annual growth figures shows.
Over the last two years alone, Tesla had outstanding performance; ‘a more than 700% share price increase in 2020 – making its founder Elon Musk the richest person on the planet.’
To keep Tesla profits at 90% to the industry baseline, Elon Musk and company have every reason to play the goodwill card to a country that holds the world’s largest nickel deposit.
This world’s largest deposit of nickel sits in a small town in North West Tanzania near the Burundian border; a small town with a little over 25,000 people.
Known as Kabanga and valued at several billion dollars, this site is owned by London-based Kabanga Nickel (formerly LZ Nickel) and is estimated to have more than 1.52 million tonnes of nickel.
Now Kabanga Nickel and the Tanzanian government have formed a new joint venture called the Tembo Nickel Corporation. In this venture, Kabanga Nickel holds an 84% stake, and 16% is held by the Tanzanian government.
Kabanga site metrics:
- Nickel: 1.52 million tonnes (3,351 million pounds)
- Copper: 0.19 million tonnes (419 million pounds)
- Cobalt: 0.12 million tonnes (265 million pounds)
While the government of Tanzania is looking to develop its mining sector to at least get a 10% contribution to the GDP by 2025, all eyes are on the Kabanga site.
Towards this end, sector experts are asking the government to review its policy and legislation to be more ‘stable, reliable, easy to understand and easy to implement.’
Here, there is the question of the existing tax regiment. According to PWC “…one example is the requirement for a Government free carried interest (FCI), whereby the Government is entitled to not less than 16% non-dilutable free carried interest (FCI) shares in the capital of a mining company (depending on the type of minerals and the level of investment).”
Much remains to be seen as to the change of taxes and other sector policies but one thing is for sure, Elon Musk and Tesla want their hands on the nickel and cobalt in Tanzania and if it means Starlink offering cheap internet for them to get into the country, so be it.