Satellite's here to Stay
With the wealth of fibre optic cabling being laid along Africa's coastline and the array of projects underway to connect landlocked countries to cables such as SEACOM, EASSY and WACS, you'd be forgiven for predicting a swift departure of the satellite communications services that have connected Africa to the rest of the world for so long. However, in reality, satellite technology isn't going
anywhere. As fibre becomes a more prolific part of Africa's infrastructural landscape, so the usage model for satellite will merely change.
Fibre’s cheap … well, cheaper than satellite. And with all the fibre being laid – both undersea and at a local level – satellite will soon be on its way out. Right? Wrong! Scott Sprague, Senior Vice President of Global Sales at SES says that today satellite is still an intrinsic part of the communications infrastructure of countries in the developing world, regardless of how much fibre they have in the ground. The difference is, where those countries classically relied on satellite for point-to-point communications, now fibre – a far more cost effective way of providing point-to-point connectivity – is the favoured technology. And satellite has moved onto other applications. “When I joined SES 10 years ago, fibre connectivity was making its way into the Indian market and the same predictions surfaced,” Sprague explains. “Instead of satellite disappearing however, the business model changed from one that was focused on point-topoint applications, to one that favoured point-to-multipoint applications. “Fast forward to today and we’re doing more satellite business in India than ever. The only difference is the business model,” he says. Sprague believes the same will be true in Africa over the coming decade. After all, it’s no secret that fibre cabling is more competitive on a cost per megabyte, point-to-point basis. And similarly, nothing competes with the cost efficiency satellite can offer in point-to-multipoint applications, such as Very Small Aperture Terminal (VSAT) and Direct-to- Home TV. But, when you’re faced with an expensive solution versus no solution at all, the expensive solution is better than nothing. And with a dearth of better options on the connectivity front, satellite has been somewhat of a godsend for Africa.
Perfect for failover
Aside from satellite beginning to take on a role that’ s more centred on point-to-multipoint applications, Sprague says that satellite will continue to be a valuable failover for fibre connectivity. “Because it’s not quite as reliant on other infrastructure (such as electricity supply) as fibre optic networks are, satellite tends to be more reliable,” Sprague says. “And this in turn makes it a perfect backup solution for a fibre backbone,” he says. A great example of this in practice, Sprague says, is French Polynesia where satellite technology was the islands together. “When a large fibre cable was run to the main island, there wasn’t any real need for the satellite to stay in service, but instead of it going away completely, the satellite technology was kept around as a failover,” he says. “And considering a failure in the fibre cable results in all communications being interrupted, the satellite has been used from time to time,” he adds.
Looking at the future, Sprague says there’s very little that’s capable of competing with satellite when one considers an entire continent like Africa can be covered with a single beam. “It’s easy to deploy, cost effective to manage and above all, reliable,” he says. And this is the primary reason Sprague says that SES currently has six customers in the Direct-to-Home TV space today. “While they’re still in the early stages of their development, there’s interest in increasing the number of Direct-to-Home TV services available within both regional markets and the pan-African market,” he says. And one of the most interesting changes this has effected in the market as a whole, Sprague says, is the amount of TV content being developed in Africa, and being consumed in Africa. “Three or four years ago, Africa was pulling the vast majority of its content from other parts of the world. Now there’s a wealth of content being developed on the continent, for consumption on the continent,” he says. And history shows that this is only the start. As more consumers get their hands on the technology and devices begin making their way into the hands of the man in the street, this will scale upwards at a blistering pace.
Banking, rural telcos and more
Outside of entertainment, Sprague says SES looks after a number of banking institutions throughout Africa that rely heavily on the star configuration of their multipoint network when it comes to providing the backbone for very data intensive applications. “Here we use satellite as the main mechanism for pushing and pulling large volumes of banking data from branches,” he says. The same applies when it comes to enabling rural telco networks for villages throughout Africa. Satellite provides an asymmetrical link, so it’s perfect for applications, such as browsing the Internet and downloading media, since the requests for the download are small but the downloads are exponentially bigger. Sprague says that there’s also strong opportunity for satellite when it comes to providing services to mobile telcos, especially if one considers the strong push underway for triple-play offerings in Africa. “Mobile telcos are looking at hybrid networks that consist of both terrestrial and satellite infrastructure in providing for their customers,” he says. “Also, this is often not just about companies that exist inside Africa,” he adds. “In many cases we’re engaging with service providers outside of Africa – most commonly, from India and China – that are looking to take advantage of market dynamics here,” he says.
Still a fibre competitor
Satellite’s better suitability to point-to-multipoint doesn’t mean it’s completely out of the ballpark when it comes to point-to-point applications, however. SES’s work with O3b Networks and its fleet of low orbiting satellites makes satellite a strong competitor to fibre. O3b’s focus on a specific geographical area and the fact that coverage can be easily moved or reconfigured as needs dictate makes it far more versatile than fibre. “Add to that the fact that some geographic regions and their harsh terrain just don’t lend themselves well to the rollout of fibre and it’s clear that low orbiting satellites have an important role to play,” he says. Sprague says the challenge for satellite operators is to keep costs as attractive as possible, while simultaneously replacing their assets often enough for reliability to be maintained. “It’s a balancing act,” he says.
Onwards and upwards
Sprague says that SES sees a bright future for satellite on the African continent and out of the six launches it has scheduled for this year, two will be dedicated to Africa. That will increase the number of satellites it has servicing Africa from seven to nine, on the backdrop of a current fleet that consists of 44 satellites in 30 orbital locations and will consist of 50 satellites by the end of this year . At the end of 2011, 18% of SES’s satellite fleet will be dedicated to servicing the African market. Outside of putting new satellite capacity in the sky , Sprague says that SES is increasing its focus on the ground too. It plans to add offices in East and South Central Africa to its office in South Africa over the course of the year. “In reality, Africa consists of 52 very interesting and different markets with varying demands and opportunities,” he says. “We are increasing our on-the-ground presence so it can understand these dynamics and stay close to our customers’ needs. We believe in understanding our target markets and that too many multinational companies have made the mistake of managing all of the countries within Africa in the same way. There’s a ton of opportunity for companies that are able to adapt to changing market conditions and assist their customers in their endeavors for growth. We’re aiming to be one the companies at the core of that phenomenon,” Sprague concludes.