With increasing demand for data, broadband connections might threaten the growth of popularity of satellite services. However, a concoction of value and flexibility can ensure satellites continue to be a major contributor both in terms of connectivity and revenues.
Oluwole Babatope, senior research analyst, telecoms & networking, Africa, IDC
Scott Mumford, group managing executive, satellite & VSAT, Liquid Telecom
Brian Jakins, regional vice president of sales in Africa, Intelsat
CommsMEA: What’s the level of satellite coverage in Africa? How does it compare relatively to other markets worldwide? What kind of regional differences exist within Africa?
Babatope: Satellite penetration in Africa is generally low and is expected to continue declining due to increasing penetration of mobile broadband and fixed network alternatives. Satellite is predominantly used in the distribution of TV for both free to air and Pay-TV in most countries in Africa, while satellites are basically deployed in remote locations where it is either not economically viable or more challenging to deploy other last mile connectivity options for telecommunication. Overall satellites play a limited role in Africa compared to other regions of the world due to a number of factors like cost of the service, growing availability of other cost effective alternatives and lack of compelling value proposition.
Mumford: Satellite coverage of Africa is extensive with more satellites being launched with additional coverage almost constantly.
CommsMEA: How have satellites helped in bridging the rural-vs-urban connectivity gap in Africa?
Babatope: Generally, in most rural areas satellite communication has been key in connecting communities to the internet because usually it is the most economically viable last mile connectivity. Demand for connectivity services either voice or data is low due to factors like poverty, illiteracy, low awareness and in some cases low youth population. Hence because of low return on investment, service providers have been wary of investing in technologies such as fibre, DSL or microwave last mile connectivity options due to the high cost associated with expanding coverage to such regions. However, due to saturation in urban areas, a number of operators and government alike are investing in expanding mobile services to rural areas. In such cases, satellite is being used as backhaul to the national backbone.
Mumford: Yes, although we are seeing a revival of satellite and especially VSAT in all areas and not just the rural communities. The advent of HTS (High Throughput Satellites) and the corresponding reduction in costs have played a big part in that. In a lot of countries the terrestrial infrastructure is still fairly unreliable in comparison to satellite (excluding Ka-Band) due to copper theft and ageing systems.
Jakins: Yes. While fibre networks have been deployed in dense urban areas, connecting the most remote areas remains a challenge for network operators, as the economics of fibre or microwave do not make sense in these areas. Satellite, with its inherent advantage of covering large regions with a single beam, remains the most cost-efficient way to connect these remote communities.
CommsMEA: What are the biggest challenges in African satellite market? What can be done to counter them?
Babatope: The greatest challenge facing satellite providers is competition from other broadband technologies i.e. fibre, DSL, WiMAX and mobile broadband. These technologies offer very competitive services to both consumers and enterprises wherever demand exists for connectivity. Also due to the increased demand for data services, there is increasing need for more robust and reliable transmission backhaul and satellites may not be economically viable. The growth in bandwidth capacity from more submarine fibre cables have also limited dependency on satellites due to economics of scale. Therefore, satellite providers have been forced to focus on locations with poor fixed infrastructure or rural areas where satellite is the most viable option or as in most cases offer backup services in urban areas.
Mumford: Costs are always a factor across all African markets, especially the costs of the terminals, which a lot of companies are subsidising as a way to breakdown the barrier to entry. There is also this belief that fibre is the answer to everything, whereas in reality there are many areas of Africa that will never have access to that technology. There are a couple of core reasons for that belief, one being the reduced latency, the other being the cost. Both of these are being addressed with the advent of new satellite technology and the increasing investment in local infrastructure.
Jakins: One of the challenges in delivering services to remote regions is the need to provide diesel fuel to power base stations given an unreliable power grid. Our higher power satellites allow for the use of smaller antennas and solar-powered hardware. We are also working with antenna manufacturers to drive greater innovation in these areas through improved antenna designs. As a result of having electronically steerable, smaller power antennas, it will greatly reduce the scale and complexity of solar-powered base stations so they can be installed even more quickly, easily and cost-effectively.
CommsMEA: What are the main opportunities for satellite operators in Africa?
Babatope: With more affordable and faster internet connection the broadband market in most urban centres in Africa today is more competitive than ever. Therefore, key opportunities for satellite providers will be to focus on rural areas or underserved areas around the continent. Also enterprises in sectors like the BFSI, mining, O&G, telecoms and IT etc. that require backup connectivity are also potential market opportunities. Satellite connectivity needs to be positioned as complementing other solutions especially for organisations that require wide area network (WAN) services in locations where it may be challenging to deploy other technologies.
Mumford: The move away from selling technology and towards selling service is the key. Operators that utilise satellite have the ability to provide connectivity to the vast majority of the African populations, and the demand for broadband internet is ever increasing. This, in my opinion, is the largest of the opportunities available to satellite operators in Africa in the coming years.
CommsMEA: Which is the latest innovation in satellite space that’s been introduced to Africa?
Mumford: The new Intelsat Epic satellite is the latest innovation that’s being introduced to the African continent. This HTS uses the traditional C and Ku band frequencies in a spot beam architecture to increase the throughput and reduce the costs but without the reduction in service availability. In the longer term, the advent of the LEO (Low Earth Orbit) satellite constellations will turn the whole market on its head, as this will provide gigabit connectivity at low latencies anywhere globally including while mobile.
CommsMEA: What should be the right strategy to follow in order to wire Africa at par with the developed countries elsewhere?
Babatope: A strategic partnership between government and satellite providers will be key in driving broadband access in underserved regions of the continent.
Mumford: I don’t believe that wiring Africa is either a commercially or chronologically viable approach. Even today the majority of the African population access the internet via a handheld device, this is unlikely to change in the foreseeable future so a big investment in WiFi is required in conjunction with high-speed backhaul connectivity. This is suited to satellite as a backhaul medium due to the costs and flexibility it offers.
Jakins: While satellite remains the best means to serve large areas and remote locations, but a one-technology-fits-all mentality will not address the market requirements and shows a lack of understanding of commercial requirements. This is why we have focused making it easier for network operators to easily integrate Intelsat EpicNG services into their hybrid networks and complement fibre or wireless technology when needed.
CommsMEA: How economical is satellite communications for the ones who wish to deploy the same in Africa and how profitable is the same for the satellite providers?
Babatope: In terms of profitability, satellite providers may need to focus on regions characterised by relatively poor fixed infrastructure, locations where predominantly last mile connectivity is still challenged. In other parts of Africa where penetration of fixed infrastructure or government policies have been implemented to drive growth in fixed infrastructure may be quite challenging for satellite providers to break through due to cut throat competition especially from fibre and mobile broadband providers.
There is general shift from emphasising technology to selecting the best technology that offers the best service at a cost effective price. This is where satellite is losing out to better alternatives in the market. To ensure profitability, consolidation has to happen to give way to large regional players who could utilise economies of scale to provide cost effective solutions and compete with other traditional providers. Satellite can also continue to be part of connectivity mix of traditional providers to provide redundancy in sectors where this is important.
Mumford: If implemented correctly then there is more than sufficient profitability for both the service provider and the satellite operator. The in-built flexibility of the bandwidth allocation means that satellite is extremely economical.
Jakins: We focus on these service providers that want to deploy satellite broadband in Africa, working with enterprise users and mobile network operators that need high quality of service and high availability. We have found that in order to meet their requirements, you cannot just be a provider of capacity. Intelsat EpicNG is delivering higher performance, greater operational efficiencies and capital expenditure savings for our customers as well as simpler access to our technology. This enables the service providers to maintain control of their network and differentiate their services and approaches they take to the end user. If you offer a differentiated solution and deliver value to customers—in the new and emerging applications—the rest will take care of itself.