[Satellite News 05-29-12] Both Eutelsat Communications and Avanti Communications have stepped up their plans in Africa and have announced the launch of new services in the last week.
Eutelsat is launching IP Easy, a new service targeting residential and home office users as well as small and medium-sized enterprises across sub-Saharan Africa. While the operator has been present in the African broadband market for almost a decade, the launch of IP Easy marks the next step of its strategy. The company had previously been looking to serve sectors such as oil and gas, financial services and public agencies, etc. Eutelsat Director of Broadband Business Development Jean-François Fremaux told Satellite News, “Our objective with IP Easy is to diversify the product range so that residential users, small- and medium-sized enterprises have access to a product adapted to their needs. We selected Newtec for its Sat3Play platform, which was originally designed specifically for consumer and SoHo markets. We were particularly attracted by the system's plug and play facility, which enables users to self-install. This is a strong asset for regions with few qualified installers. Eutelsat 16A is our chosen satellite to launch IP Easy, using its Ku-band service area from West Africa across to Madagascar. We are also planning to develop TV services in the same service area, opening the opportunity for users to bundle Internet access with broadcast services via a single antenna.”
The company is known for its progressive broadband strategy in Europe, particularly with the launch of the Ka-Sat satellite. However, the African region is also a key target for the operator. Fremaux talks about the overall prospects for the broadband market in Africa. “Northern Sky Research forecasts growth of 160,000 professional VSAT terminals in Sub-Saharan Africa to 2016. Other forecasts predict the opportunity for 140,000 terminals for SOHO/CSP+ users in Central Africa. With the lack of terrestrial infrastructure (copper lines and fiber), a state monopoly on submarine cables, high rural population and global growth of African GDP (5.8 percent in 2012), Africa is a region where Ku- and C-band satellites combined with end-to end service can pursue real growth opportunities in the broadband sector,” he said. “It is a continent where we have progressively developed strong video neighborhoods with leading pay-TV platform such as MultiChoice, as well as solutions for GSM backhaul, video contribution and IP trunking, in addition to pursuing our longstanding VSAT business.”
In terms of where the company is initially targeting services, Fremaux commented, “We are initiating service in regions around the Gulf of Guinea with high population density and significant revenue per capita, and also in Madagascar where we have a strong partner base. We will progressively extend IP Easy to other regions in Eutelsat 16A’s African service area and are planning to deploy the service on other Eutelsat satellites, in operation or to be launched, in order to extend reach to the entire African continent.”
The company has had to invest in its facilities and ground infrastructure to make a service such as IP Easy a reality. “Most of the effort has already been made in our teleport in Cagliari, Sardinia. Since 2008, with the support of the Sardinia region, Eutelsat has established ground infrastructure and hired expertise for a teleport particularly focused on serving clients in the African continent. For IP Easy, we procured a Newtec Hub and developed complementary tools to operate, support and control the service to final users,” noted Fremaux.
However, while the African market has undoubted potential, it is not necessarily the easiest market to monetize. A number of things have to fall into place to build a successful business here. “A strong network of local service providers with high skills in Internet provision and satellite networks is essential and this is where we are now focusing our energies with IP Easy, starting with Afrique Telecom, an established provider of broadband solutions across Africa,” Fremaux said.
Avanti is launching an International IP trunking proposition that it says, “will transform international IP trunking” across Africa and the Middle East with prices as low as $500 per Mbps. The service is a major launch for the operator. Avanti CEO David Williams told Satellite News that he sees huge growth potential for the operator in Africa. “Africa and the Middle East are the fastest growing markets for Internet subscribers with 10 year growth rates forecast to be in excess of 2,000 percent,” Williams said. “However, demand for international high batch data transmission in emerging markets is being held back by oversubscribed terrestrial telecommunications infrastructure or the absence of reliable terrestrial infrastructure. Ka-band satellites change the cost of providing high data rate services. Africa has suffered from escalating pricing in recent years, and I am delighted that we can reverse that trend.”
Williams does not see a huge threat coming from fiber and terrestrial networks, and believes operators such as Avanti can carve out a strong niche. “Both Africa and the Middle East have limited fiber capacity, which will impact on the speed of development of digital-based economies. Extending or constructing new fiber networks takes considerable time and involves extensive costs, especially in regards to the civil engineering required to provide ducts. Our satellite-based International IP trunking proposition will help ISPs, mobile operators and large corporate network operators in the Middle East and Africa side-step these constraints and keep pace with market growth,” he says.
In terms of which markets the operator is targeting the service, Williams added, “We are focusing our attentions on Kenya, Tanzania, South Africa, Zimbabwe and Nigeria, although there are a few others we can serve. Customers can manage International IP trunking on a national basis from a single gateway and hub, either as a wholesale or managed service. We therefore expect the service to be immediately profitable, and have been very pleased by the high volume of enquiries following the product launch.”
The company, which is launching high-powered satellites such as Hylas-1 and Hylas-2 (which will launch later this year), expects to see strong demand from telcos across the region for its services. “We don’t think of ourselves as a broadband business. We give service provider customers access to the Avanti cloud of resources and help them to manage service deployment in whichever sector they wish to address. Clearly the bulk data markets are easiest to serve, if the product and price points are right because a small number of contracts and installations yields a high revenue,” Williams said. “In the enterprise and government sector contracts are large. In consumer, the key is to partner with service providers that have a strong, well-organized selling culture. There is no shortage of demand in the consumer segment in Africa, and the number of significant telcos wanting to take on the distribution task is growing.”