Konnect Africa CEO on Broadband Business Models
Konnect Africa, the broadband venture set up by Eutelsat Communications, has recently launched commercial services for its first set of customers in Africa. With more than 70 percent of the African population living outside urban areas, Konnect Africa CEO Laurent Grimaldi sees the continent as a fruitful growth opportunity, and also believes satellite is the best way to help its rural civilians cross the digital divide.
The venture has already secured partnerships with operators in nine countries, including Bloosat, which offers satellite services in Cameroon and Central Africa; China Telecom, which is cultivating communications links between Africa and Asia-Pacific; and Ubora Systems, an IT solution provider for the Kenyan government. However, in an interview with Via Satellite, Grimaldi emphasized that Konnect Africa would be pursuing customers outside the standard sphere of Internet Service Providers (ISPs) and telecommunications companies.
“Today we see finance companies and solar home systems providers looking at opportunities in the digital sector to provide access, content via apps, or both,” he said, for instance.
Cost, of course, is a major consideration for any digital venture in Africa. Grimaldi said Konnect Africa closely analyzed successful established industries in the continent to pinpoint the right payment scheme and pricing packages. “We decided that if our partners charge their customers for what they use, then we should do the same. This approach helps us attract newcomers to the satellite broadband business who aren’t required to buy huge capacity upfront. This strategy is gaining traction and attracting high interest from partners who may have otherwise kept their distance from satellite-based solutions,” he said.
Grimaldi believes the pay-as-you-go model will help expand Konnect Africa’s portfolio of partners by making its services more attractive to companies beyond telcos. “There is no one size fits all, especially in Africa, and we will work hand-in-hand with our partners to develop the offers corresponding to their specific audiences,” he said. “We will help them in defining prices … categorizing the various components of a package and, when appropriate, considering loyalty schemes.”
Additionally, Grimaldi believes that more familiarity with the technology is another key element to drawing in customers outside of satellite’s traditional purview. “We expect some of our partners who are less familiar with the satellite business to need more support and have anticipated this with training modules and other tools to accelerate their time to market,” he said.
Konnect Africa has focused its marketing campaigns on educating prospective partners and end-user segments on why satellite broadband is often the most economical option. “We aim to explain why satellite broadband is easier to access than ever before and how we are making it affordable with flexible offers,” he said.
The African population is both relatively young and hungry for connectivity. Mobile smartphone use doubled between 2014 and 2016, according to GSMA Intelligence, and demand for broadband continues to escalate across the region, particularly in countries with rapidly improving economies such as Kenya and Nigeria.
Other companies have sensed the opportunity here too, and are quickly developing their own services to bring to the African market. Facebook, which plans to lay out 500 miles of fiber in Uganda before the end of the year, is just one example.
But Grimaldi isn’t particularly apprehensive about encroaching competition, as he sees satellite broadband as both complementary to other solutions and necessary to serve the needs of the rural African population. “[Satellite] is unbeatable for offering truly universal coverage. Fiber and Asymmetric Digital Subscriber Line (ADSL) schemes cannot extend far beyond urban or peri-urban areas, so there will be a long-term need for satellite to reach communities in more remote areas,” he said.
Konnect Africa will also look to develop schemes such as Wi-Fi hotspots to bring the benefits of the internet to more homes, according to Grimaldi.
“We are convinced we can make a huge difference in terms of contributing to local development, business set up and local trade exchanges,” he added.