Liquid Home reduces uncapped internet prices. Is it due to Starlink?

Liquid Home, formerly Zimbabwe Online, Zimbabwe’s largest fixed internet service provider, has recently announced new uncapped packages dubbed “Infinity.” The reductions will apply to both FibroniX (Fibre to the home) and WibroniX (LTE) customers. As is customary at Liquid Home, there are two sets of prices: prices for home customers, which are cheaper but receive less priority during business hours, and prices for business customers.

Infinity Home Packages and their relevant prices

Infinity Business Packages and their relevant prices

Is this Liquid Home’s plan to counter Starlink?

When we put this question to Liquid’s Marketing executives, the answer was a vehement “no,” and they made it clear they would be much happier if people stopped asking them this question all the time. It’s a fair question, though, given the excitement that greets every morsel of information we get about Starlink. One of the biggest selling points of Starlink is that their prices were much cheaper than what local ISPs were charging, and their speeds were also much higher than the packages on offer. Then, the government announced that IMC, a local company, would be partnering with Starlink to bring the service to Zimbabwe. With Liquid Home’s announcement coming a few weeks after this announcement, someone had to ask the question.

The Liquid Home team had a well-rehearsed answer to this. Those saying the reduction was due to Starlink’s imminent entry into the market were victims of the post hoc fallacy. Just because B (the price reduction) follows A (the Starlink announcement) does not mean A caused B. Given the current market situation and Starlink’s technological set-up, there is no way Starlink is going to make much of a dent in Liquid’s market share. Competition is good, and Liquid will relish the challenge, was the final defiant declaration the team made.

My take: It’s hard for Liquid to say Starlink had nothing to do with this. It’s difficult to imagine them doing this without at least a small thought on how Starlink’s entry would play to the local population. Starlink had to have some part in all these decisions. While the majority of Zimbabweans would not be able to afford Starlink’s equipment cost of about US$600, Liquid’s corporate and wealthy clients would be tempted by Starlink’s offerings. There are, however, arguments to be made that this has largely got nothing to do with Starlink:

• Despite all the noise, Starlink is not going to be coming to Zimbabwe tomorrow. IMC, which has been strangely given the monopoly of partnering with Starlink, is not an ISP. They are nowhere near being ready to be called an ISP. Their current website is just an indication of the uphill battle they face against a serious player like Liquid. They only just hired their CEO, Denny Marandure, who is interestingly a former Liquid executive. They need to gather skilled staff, organise, and lay the groundwork. If I were Liquid Home, I would pay attention to the upstart but I wouldn’t be losing any sleep.
• As we said, a lot of Zimbabweans will not be able to afford Starlink’s products, especially the initial equipment costs.
• Liquid Home is Zimbabwe’s largest fixed internet provider. Starlink has nowhere near the capacity to cater to even a third of these customers. They do not have the capacity.
• There has been deflation all around. Prices are coming down as Zimbabweans struggle with reduced discretionary incomes. Even supermarkets have been reducing prices to stay afloat.
• Starlink’s prices are promotional too. All over the world, Starlink has been raising its prices. We are not yet sure how much Starlink would charge us here in Zimbabwe, but chances are the prices will be nowhere as low as the ones we see. In August, Starlink will be charging around US$90 for roaming in Africa.

WibroniX speeds have plateaued

The maximum speeds you are going to get with Infinity packages is 20 Mbps. That is probably due to technological limitations. It is hard for most of us on WibroniX to not feel left out. Fibre customers are getting 75 Mbps for just US$10 more. The Liquid Team promised that there will be upcoming speed improvements. Does it mean Liquid will finally introduce 5G? It sounded like it, although we are just guessing here. One thing to note is that there is still a capacity for 4G speeds to reach 50 Mbps or higher.

In the end, while Starlink’s impending arrival may have played a role in Liquid Home’s decision to slash prices, it’s unlikely to be the sole or primary reason. The company is likely responding to various market forces and competitive pressures, as any savvy business would. Only time will tell how this pricing shakeup impacts the Zimbabwean internet landscape, but one thing is certain: it’s an exciting time for internet users in the country.