Business Daily (Nairobi)
An ambitious $650 million undertaking by Internet giant Google and international bank HSBC will see Internet services extended to nearly three billion people in rural areas across the world.
The two companies hope to launch a 16 satellite systems within the next year that will provide cheap Internet connectivity to users in mostly rural areas.
The venture will be spearheaded by O3b Networks, a joint initiative pairing the two companies with Liberty Global, a US-based cable television operator.
O3b Networks stands for the “other three billion”, a reference to the world’s population that lacks access to the Internet, the bulk of whom live in Africa.
The project’s objective is to extend internet services to users in areas that are not covered by current offerings, such as fibre optic networks and satellites, which are traditionally accessible in urban and peri-urban areas.
“Perhaps half of the entire African population does not live in major cities,” says Brian Neilson, research director at BMI-TechKnowledge, a South Africa-based telecoms consultancy, who adds that for O3b, “there is a clear gap-closing opportunity.”
The three billion unconnected users form the base upon which O3b Networks hopes to tap into by constructing an Internet infrastructure based on satellites but with the speed of fibre optic cables.
The satellites will offer seamless communication using a relay system where one satellite hands over communication to another, ensuring that users are permanently connected.
The company is banking on the difficulties of laying a fibre optic cable especially in remote parts to succeed in the programme, hoping to connect areas which are commercially unviable.
Typically, fibre optic networks cover areas with high population density, translating to a very high price per megabit to end-users in less populated areas.
O3b says they are also vulnerable to physical damage as was seen early last year in Egypt when two cable (FLAG Europe Asia and SEA-ME-WE) were cut, shutting out many users in the Middle East and south east Asia.
But analysts say the case may be different in Sub-Saharan Africa where telecoms operators are aiming to offload their massive bandwidth on a growing number of mobile users as opposed to few computer users.
Telkom Kenya’s CEO Mickael Ghossein, says the low PC penetration would be a major obstacle for the company as it seeks to grow its Internet-user database.
But given the explosion of mobile phone usage and the advancement of smart phones where more users are getting connected through phones rather than personal computers (PCs), Africa may be about to undergo an Internet revolution.
A recent study conducted by consultants Ernst & Young found the continent’s mobile phone penetration was 37 per cent with an annual growth of 49.3 per cent, the highest in the world.
This penetration is seven times that of computer penetration which stands at five per cent.
Harvard professor, Calestous Juma, an authority in the application of science and technology to sustainable development, has said Internet use via the phone heralds a big change.
“Africa could become a totally new continent within a very short time,” he said.
It is this use of mobile phones that O3b Networks wants to exploit to see more people access Internet in Africa.
O3b will use a type of satellite known as medium-earth orbit that revolves at lower altitudes than those used to beam TV signals.
The advantage is a reduction in latency, the time it takes for a signal to travel between earth and a satellite, providing the user with near uninterrupted browsing.
However, O3b Networks may be trying to reinvent the wheel following the early ’90s $6 billion (Sh459.8 billion) blunder of Motorola’s Iridium and Microsoft’s Teledesic satellite systems that tried to do what Google’s subsidiary is trying.
In Kenya, O3b Networks will face the challenge of the arrival of up to four submarine cable operators who are scrambling to get a grab of the last frontiers for internet connectivity.
Two of four cable operators — Seacom and TEAMs — are expected to start operations in September.
LION and Eassy are expected to be operational in 2010.
“The bandwidth capacity for satellite is very low compared to fibre optic but satellite is advantageous for long distances. Unfortunately the two systems cannot complement each other in rural areas,” said Muriuki Mureithi, an independent analyst.
IT consultants say that both fibre optic cable operators and satellite systems will face the challenge of sourcing stable energy, will contend with a poor road network and must grapple with the lack of local content that will enable users to fully exploit the massive bandwidth being deployed.
Most industry watchers agree that a combined solution that includes a fiber optic connection to central landing points located in the cities, and satellite connectivity from the cities to rural areas but in Kenya’s case it may not be feasible.
A recent World Bank report “Information and Communications for Development 2009” reveals that for every 10 per cent increase in bandwidth speeds there is corresponding economic growth of 1.3 per cent.