In 2009 the installation of the first undersea cable providing connectivity to South Africa was heralded as the end of satellites as links to the outside world; however, five years later satellite connectivity remains just as relevant given its cost-effectiveness in expanding broadband coverage to rural and low-income areas. According to the 2014 broadband commission report from the International Telecommunication Union (ITU), although broadband communication mainly uses terrestrial links, satellites will play a greater role in future.
Satellite connectivity in the country is comparable to ADSL in terms of speed, with the latest KA-SAT high-throughput communications and spot-beam technology affording end-users downstream and upstream speeds of 20 Mbps and 6 Mbps, respectively, regardless of location.
The next generation of high-throughput satellites, will provide speeds up to 100 Mbps by 2020. According to the ITU, these third-generation satellites will be capable of serving over 1m people each, compared to current versions that serve a few hundred thousand.
Given the capital-intensive nature of the satellite industry, pricing has been high and satellite connections to date have primarily targeted largecap blue chips and corporate subscribers.
“Satellite connectivity is really expensive and just fills the gap for corporate users in remote areas, such as the mining industry and banks connecting ATMs in remote areas,” Arthur Goldstuck, managing director for World Wide Worx, told OBG. Thecla Mbongue, senior research analyst at Ovum, says that satellites remain unaffordable for the ordinary consumer and that demand may be dampened by increasing mobile connectivity as a cheaper substitute.
There may yet be retail ventures in the cards. Googlebacked O3b Networks – shorthand for the “ other 3bn” people without internet access – launched eight satellites in 2013-14 to provide high-speed connectivity in developing countries. The $1.3bn project plans 12 satellites in total and targets remotely located businesses and households in an effort to reduce prices and latency. In South Africa, O3b has partnered with domestic IT service provider Mavoni Technologies.
Mobile operator Vodacom teamed up with leading satellite service provider Intelsat in March 2014 to deliver broadband connectivity to small and mediumsized companies in sub-Saharan Africa. US-based Intelsat also has over 20 satellites covering Africa, with plans to launch its next generation of satellites in 2016.
While a total of 10 undersea cables now serve the continent, last-mile linkages remain weak in most African markets. To meet demand, at least four satellites were scheduled to launch in 2014. SES, a Luxembourg-based commercial satellite operator, launched three satellites dedicated to Africa in 2013, bringing the company’s total number of satellites dedicated to Africa to nine (of 56). Eutelsat, Europe's biggest satellite operator, launched its tri-band EUTELSAT 3B for Africa in 2014 on the heels of launching EUTELSAT 7B, which also covers Africa, the previous year.
While Mbongue estimates that satellite coverage currently accounts for less than 2% of connectivity, this figure is set to rise. Liquid Telecom (LT) established a multimillion-dollar satellite hub at Teraco’s satellite earth station in South Africa in early 2014, which will allow LT to keep Africa-originated telecoms traffic in Africa instead of backhauling it through Europe, reducing latency and increasing connectivity speeds.
Overhead connectivity is also coming from suborbital connections. Google expanded its Project Loon pilot programme to South Africa in 2014, positioning balloons 18 km above the earth, where they can stay for up to 100 days before requiring refuelling and servicing. Cheaper than putting satellites in orbit, the balloons beam high-speed connectivity to underserved areas.
As the ICT sector continues to converge, more partnerships between telecoms operators and data providers may be on the horizon. Satellites will play a significant role in overcoming isolation to meet underserved South African demand in the coming years.
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