Volo Broadband targets operators wanting to reach edge-of-network data markets in Sub-Saharan Africa
Except for new entry operators, the mobile companies have reached the edge of their addressable markets in most countries. If that’s true for voice, the situation is much worse for data where operators are primarily focused on the richer urban markets. But with the rise of Internet use in Africa, a new start-up – Volo Broadband – is determined to help operators address edge-of-network data markets. Russell Southwood spoke to one of the company’s co-founders Mark Summer about how they’re going to do this.
Two of Volo Broadband’s co-founders, Mark Summer and Kristin Peterson came out of an NGO called Inveneo, which has been very active in building networks to reach remote or rural areas. At Inveneo, they were responsible for deploying networks or advising in the following countries: Kenya; Uganda; Mozambique; Haiti; Nepal; Philippines; Palau; Federated States of Micronesia and in the West Bank/Palestine.
For example, it built a 20-30 mbps link to an island in the middle of Uganda’s Lake Victoria from Kisumu. The Haiti network it built covers a third of the country and is used by operators to provide rural data connectivity.
But whereas these networks came from either public or NGO initiatives, Volo Broadband is aimed squarely at helping three types of existing operators – mobile operators, existing ISPs and greenfield ISPs – address these types of markets.
For the mobile operators Volo Broadband offers solutions that will reduce both OPEX and CAPEX in reaching these customers and will integrate with their existing systems. For the existing ISP, they can be a technology and systems provider who has the experience of operating in remote and rural areas and can help them build the people and skill expertise they need to address this market. For greenfield ISPs, it has used its experience with Inveneo to build business models that can help the start-up ISP identify the business it has to win to be successful.
In geographic terms, it is focused on Sub-Saharan Africa and parts of Asia (including India, Indonesia and the Philippines. In Sub-Saharan Africa it will focus on those countries Summer describes as having “regulatory readiness”:”The key components of this are the ability to use Wi-Fi equipment in the 2.4 or 5.8 GHz frequencies and the licensing of ISPs. There are lots of greenfield opportunities in countries that have this regulatory readiness.” The countries that currently make most sense are Kenya, Uganda, Tanzania, Nigeria and Ghana. Also, even where there are countries where this is not regulatory readiness “things are changing quite fast.”
This week has seen low-cost base station operator Altobridge go into liquidation. It was seeking to persuade mobile operators to use its low-cost base station to do voice and data in remote areas. Despite some successes – in Niger with Orange and in parts of Asia – it struggled to persuade mobile operators to buy its solution. In terms of mobile operator investment priorities, these kind of edge-of-market opportunities were simply too far down their priority list or had been taken off the table.
However Summer is optimistic that there will be opportunities for two reasons. Firstly, mobile operators are increasingly outsourcing their network to third parties and thus will be more receptive to these kinds of approaches. Secondly, in the ISP space (particularly in Africa), there are now a number of multi-country ISP operators and there are distinct commercial advantages to them from the way Volo Broadband can help them develop these kinds of opportunities, particularly as some part of them are delivered through cloud based software. In terms of mobile operators, Summer says:”I’m very hopeful and we’re starting to see more interest.” Volo Broadband is part of the Orange Fab accelerator programme in San Francisco.
In technology terms, Volo Broadband is focused on using existing Wi-Fi technology which is cheap both in terms of network and end-user equipment:”What we find interesting is that the technology is changing. People like Ubiquiti Networks are driving that change but now Ruckus Wireless is providing competition to them. There are also new start-ups like Microtik. The innovation cycle is so rapid.”
The 802.AC Wi-Fi standard will lead to greater efficiencies in spectrum use and deliver Gigabit Ethernet, where it will begin to compete with microwave and WiMAX solutions. Volo Broadband will be able to use Wi-Fi to deliver up to 100 kms backhaul network, as Inveneo did with the island in Lake Victoria. Obviously the only trade-off is the greater the distance, the lower the capacity of the signal.
So who will operators find as customers in these markets?:”SMEs have a lot of problems in these areas. But there’s also Government offices, schools and healthcare facilities. These are all customers who are paying quite high prices for connectivity and it’s of unpredictable quality. Down the road, they can also branch out into the consumer space”.
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