OmniGlobe CEO Expects Broadband Deals “In Next Six Months”

[Satellite News – 2-21-08] Canada’s OmniGlobe Networks hopes the company’s acquisition of Bandwidth Technologies International Group Ltd. (BTIG), a U.K.-based international provider of satellite communications systems, will be the springboard for success in a number of international markets.
    OmniGlobe uses a combination of wireless, satellite and cellular technologies to provide a solution that enables ISPs and local operators to offer fast, reliable and affordable broadband Internet services in geographic regions around the world where terrestrial telecommunications are unavailable, unreliable or too expensive. Jason Neale, OmniGlobe’s CEO, told Satellite News that the company sees satellite broadband as a $50 billion dollar market and has identified 24 markets where he sees a strong growth opportunity for satellite broadband.
    OmniGlobe already is in discussion with local service providers in rural Canada and wants to export that model internationally. “We expect to announce deals within in the next six months,” Neale said. “There are several well down the pipeline. Our model in Canada has been to partner with local ISPs, regionalized ISPs, etc. and serve those customers. So we will be seeking deals with regional ISPs in Africa and the Middle East.”
    The company plans to grow slowly but steadily. “In terms of a hit rate, I think we would like to add three to four markets a year,” Neale said. “At the beginning of 2009, I hope we would be in three to four countries. We are quite opportunistic. We have a preferred order of entry.”
    OmniGlobe’s top markets are those “where a high percentage of the population are not served by conventional broadband,” Neale said. “We have targets of 24 markets. Some are conventional locations and some are locations like Iran and Egypt, which has a fast growing, affluent population. There are politically sensitive environments, but provided we can get the licenses and local partners we are able to serve them. In a lot of countries where there is not high broadband penetration, broadband growth is slow and falling behind. ”
    While Europe may not be near the top of its list, OmniGlobe also has identified a number of opportunities in Europe. “There are opportunities in markets such as Greece, Spain, France, Ireland and Portugal where there are potentially good opportunities,” Neale said. “They are on our radar. We are laying out our strategy here. It is a possibility that we will announce deals in Europe in the next six months.”

Technology Approach

    OmniGlobe’s plans to use WiMax technology in its expansion plans, which Neale sees as a less expensive method than VSAT. “Our strategy is to marry WiMax and cellular with satellite, all linked together with our unique interoperability software, which allows effective local and global management as well as a significant reduction in the usage of space segment costs,” he said. “WiMax is substantially cheaper and easier to install than VSAT terminals and ultimately, WiMax will be free as it will be a chipset in a laptop like Wi-Fi is today, and it will be hard for VSAT to compete against a free technology.”
    The challenge for OmniGlobe will be executing its aggressive international strategy. Like many satellite companies, the company does not want to serve areas and territories where there are good terrestrial broadband alternatives. The company’s main competition may be other satellite players, but Neale believes OmniGlobe’s solution offers better value than systems such as a Ka-band alternative. “One of the key differentiators versus us against a Ka-band system is the cost of access of our wireless modems, which communicate back to a VSAT terminal and then back to a satellite gateway, is significantly lower than a Ka-band satellite access system, and because we push and cache a lot of content locally in each town the operating costs are lower,” he said.
    Neale, however, believes there is room in the market for a number of satellite broadband plays. “I am optimistic Ka-band will succeed,” he said. “We think there is room for both. We think this is a $50 billion market for broadband in remote and rural countries. There is room for a number of players. I think Ka-band will be successful. However, we are very price competitive in those environments. The cost for people to access our network is not that much.”
    Neale believes OmniGlobe has come full circle in a short period of time. “We have very much focused on Canada for the last 18 months, and now we are turning back into the international arena,” he said. “So I would say it is a new phase for us. By the end of this year we expect to be the number one provider of rural connectivity in Canada, and it is really about how we take that success in Canada and cement that internationally.”