High Throughput Satellite capacity in Africa may at last enable mobile operators to find a sustainable model for remote base stations

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For a long time it looked as if satellite operators and resellers serving Africa were out of tune with their customers. When fibre arrived in quantity, customers were resentful for all those years of paying for satellite capacity at what seemed like top dollar. Finally, finally under some competitive pressure from new operators they seem to be tuning into new markets. Russell Southwood spoke to Eran Shapiro is Director, Business and Technology Ventures at Spacecom, operators of AMOS satellites.

At the core of High Throughput Satellite (HTS) is its frequencies re-use technology made possible by small spot beams with high throughput per beam. The same frequency is used by multiple beams that are far enough from each other in terms of geographic coverage to avoid interference.
This contrasts with current KU band beams where each transponder within a wide beam has its own frequency. In capacity terms, this allows HTS spot beams to deliver 1 Gbps per spot beam compared with 600-800 Mbps in total on wide KU band beam using the same spectrum resources as currently. To provide the same coverage as regional KU band beam, multiple spot beams are required, so the total capacity can be 10 times or more. Better still, the customer can deploy a smaller antenna of 74 cms.

HTS has already been used for over a decade in North America with Ka-band and some of the latest satellites are utilizing at least 60 spot beams to provide over 100Gbps total capacity each.
According to Shapiro:”It’s similar to what the cellular networks do with cell-splitting, where they can create multiple 3G cells to replace a 2G cell.”

So the big question is how does all this affect price? Well, as the technical experts say, it’s six of one and half a dozen of the other. HTS satellites are more expensive to build than traditional satellites as they have more antennas and more feeds. But they can significantly increase the total Mbps capacity. The sum of these two different cost pulls are that the cost per Mbps can be decreased.

But the first cost decrease is in the customer equipment. It’s not unusual for a 90cm-1m VSAT kit for KU band to cost over US$1000. HTS kits are lower than this cost because they are already in use at a mass market level: there are 1.5 million business and household customers in the USA. So without operator subsidy, these kits are already down to US$500 and could in time go as low as US$200.

With the vast majority of the cost of operating a remote base station being satellite capacity costs, the mobile operators have understandably struggled to find a business model. Many have said to themselves, we’ve reached the edge of the addressable market, let’s concentrate on making the existing network fit for data and more efficient overall.

But this is not a minor problem as a study by Hamilton Research last year calculated that just 44% of Africa’s population was passed by fibre. But to be fair, two other points need to be made. Firstly, that 44% is the part of the population that is more likely to afford Internet. Secondly, that number is likely to keep growing as networks continue to expand to target addressable markets in many countries: the addressable market roll-out is not yet over. But when it is, there will still places that need data that are off the network:”To take Internet to a bigger audience that we’re currently missing, it has to accommodate the cost of capacity.”

Low cost base station vendors for remote, off-network locations have struggled to make sales for many reasons but in large part because of the satellite capacity cost barrier. The mobile operators have talked about needing bandwidth at around US$500 per Mbps and Shapiro thinks that it will now be possible to deliver on or around that level. It’s also the same level at which regional ISPs can buy at. Shapiro is optimistic that increased mobile data use will in time produce “significantly higher volumes.”

It can also deliver just data to remote locations:”Take a small village. We can put 1-2 dedicated VSATs with Wi-Fi. They will not get as good an experience as elsewhere but it will be better than most other options available to them.”

There’s another wrinkle in this argument. Some satellite operators want to control the “big infrastructure” like the earth stations and only sell managed Mbps: it’s all about retaining margins in different parts of the value chain. Many operators want to invest in the “big infrastructure” and sell Mbps to their customers. Shapiro thinks that other satellite operators have also done this for reasons that are technically convenient to them and are out of tune with what the market wants.
Overall Shapiro is optimistic that HTS will grow the market and help close the digital divide:”I’m bullish about the opportunities in Sub-Saharan Africa. We’ve had a lot of experience there over the last few years and see that the promise can be delivered. I also see the value of HTS in Africa as something to help close the digital divide.”

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