ACCELON TO LAUNCH INTERNATIONAL VOIP SERVICE IN NIGERIA IN 4-6 WEEKS TIME
Accelon launched two years ago and was financed through a trio of shareholders including African Venture Partners, IDC and global satellite operators, SES. Although it is currently focusing its roll-out on West Africa, it has pan-continental ambitions. Sometime in the next month or so, it will launch an international VoIP service in Nigeria. Mapara Syed spoke to its CEO Robert Tibbs about what the company currently offers and its future plans.
How did you the launch for Accelon come about?
The company started, in concept, about four years ago. It really started out when I was on an airplane flying to the USA and I saw an ad in the in-flight magazine for a direct way HNS use networks on a direct platform. I thought it was a good idea so came back and talked with my technology partner, David Keist, who also liked the idea so we then decided to put a concept together around it. Once we put it together, then we really wanted to talk to prospective investors. We agreed that Africa Venture Partners would fund the initial bit of it, and then our first port of call was with IDC. At that point we were really putting together essentially a business model that would have us work with partners in-country. The reality was at the time that there really were not a lot of partners that could approach the market with the scope that we wanted. We wanted to change the parameters of VSAT, instead of high-end corporate we wanted to really drive the price of the terminals down and put in some common platforms and services that would be able to address the market in a much broader way and in a much more expanded way. So that’s how the company came into fruition.
How was the company financed?
The founding investor was Africa Venture Partners and myself, David Keist and Harry Wright, we were partners there. We put the initial funding together and launched the company. Then we attracted IDC as an investor and at the same time SES Global, which was a very interesting move as until very recently they had little or nothing in Africa. With IDC we convinced them that they should become a shareholder and use Accelon as a platform for expanding their business in Africa. It’s almost a dream come true to think that you have got the world’s largest satellite operator as your partner. They really help us a lot in terms of their technology, their networking skills and the ability to help us even in the facility side. Recently they really worked with us, probably with over 1200 man hours, helping us to really look at our network for optimisation and looking at facilities. We are very strong partners and they are just excellent shareholders. The Chief Executive and Chief Technology Officer sits on our board and also the CFO.
When did operations begin?
Operations began about two years ago. We took a long time as we did a lot of market research. The first real primary research we did was in four countries specifically focused on the VSAT area. We did market research in Tanzania, DRC, Ghana and Nigeria…
Are they the countries Accelon operate in?
Actually, interestingly enough we are operating now in Mali, Togo, Ghana and Nigeria. So from that standpoint it took a while to really get the business model right and to recruit a world class team because we went after a sophisticated group of people to be able to do this. Any business is difficult but particularly growing a technology business where you are changing the parameters of markets is no small feat and to do that without a relatively crisp set of minds is not difficult, it’s impossible.
What services do Accelon provide?
Right now internet access is a bread and butter service so using VSAT networks we provide internet access. The next bread and butter service would really be Managed Private Networks where we are essentially managing the networks we are offering our customers. They would be corporate and enterprise customers and we let them run their networks over our network, if you like, and we offer them an end-to-end service. We are just now finalising the development of our VoIP, which will be a quality of service for a VoIP offering. We also have professional services because what we found is when we got into the market that the customers often needed help beyond the internet porch so we actually go in and help them make sure their own internal networks are optimised to be able to run on our network, which we like to think is optimised as well.
You said you were finalising VoIP offering. Could you tell me a little more about that, for instance how much it will cost?
I can’t tell you that but what we are hoping to be able to do is to offer quality voice and to offer that at prices that are competitive, in a positive sense, in relationship to the other voice services that are out there. So we are convinced at this point that we should be able to be the first quality VoIP service offering in a place like Nigeria but still at attractive prices. The initial costings certainly indicate that we will be.
And when will you launch that?
We will be launching that in the next month or so, probably be out testing in about 30 to 60 days, what I would say a pilot because while we believe it is ready to roll, we still want to make sure that you got all the elements that relate to how it affects your existing network covered. It would be a pilot but let’s call it a test market as it may be relatively short because we think we know what we are doing there but still we don’t want to bring out a product that negatively affects the other clients that you have on the network.
And technically, how will that be delivered?
Really with an appliance that is loaded with the VW6000 platform and we simply offer it over our links and you put your telephone into the ports of the appliance and off you go. But end-to-end managed from our facilities.
On to something different, we particularly wanted to know how you buy bandwidth?
It’s pretty much common knowledge I think now. One of the things that we wanted to be able to do, if we were going to drive the pricing down, we really needed to be able to do that in a different model than some of the other VSAT players. Now, it helps when you have as your partner the world’s largest satellite operator so the model that we looked at was that we negotiated with SES as a supplier and a shareholder and we managed to get committed to us a very large pool of bandwidth.
But we really contracted that bandwidth as we needed in two meg slices even though the total of bandwidth available on the spot beam we put over West Africa is fifteen transponders at 26 megs each so it’s a large amount of bandwidth. However, there are many VSAT operators that have gone under simply by going out and contracting more amounts of bandwidth, the market is not where they really want it to be and they really can’t bear the weight of that unused bandwidth. Satellite operators, that’s how they live their lives, they are like real estate players, they put these things up and they take a bet on the market.
It has paid off in that a spot beam has suited West Africa very effectively from our standpoint. It’s a lovely piece of bandwidth, a very high powered KU-band and a very effective look angle so we are not skimming the grass to be able to see the satellite. We really have a strong, efficient network based on this bandwidth. So a bit different way of contracting, which has really allowed us to get into the market and spend a lot of our money on people, training, our network, our facilities, our marketing and building the brand.
And at what rate do you buy bandwidth?
That would be proprietary and unfortunately I cannot answer that.
What are Accelon’s pan-African ambitions?
Right now we have satellite coverage over West Africa and it really goes from Senegal down to Gabon, Libreville and inward a bit so we have West Africa covered very nicely. I mentioned earlier that we are in four countries presently so we intend to expand in the West African market place. We also just recently, just last month, with SES, launched a high powered C-band satellite, which is a Hemi. This sees southern Africa, northern Africa and West Africa, Europe, US and Latin America so we have been working with SES over the last nine to twelve months in building a business model around that satellite.
From a networking standpoint, it’s an excellent piece of space segment so we would expect to be given an all-max and on that satellite we would look at things like trunking and managing networks for some of the telecommunication operators. We have been working with one of the major mobile operators in a test mode, we have them with us in Luxembourg, and we will be hopefully very soon rolling out a test network on their network where we are looking at a managed GSM service. We see that also for straight bandwidth where you are looking at offering bandwidth into cyber-centres and some of the high usage centres that find it very difficult, from an efficiency standpoint, on a shared network and we will be putting in networks that will be a bit more robust for them. We would expect to have that rolling out in the market place later this year so that’s one. We know that SES is coming into the market also with another high powered KU-band capacity, which will be up and running in perhaps another 18 to 24 months. That will allow us to essentially extend our existing internet access and MPN services and other services that we are developing across all of sub-Saharan Africa. So the future is mapped out fairly well for us.
What is the timetable for this expansion?
We have a lot to do in West Africa with the initial KU-band beam. That will take us into the future until that capacity is saturated. The C-band we will expect to be in the market this year, perhaps plugged into our business model around mid-year or just thereafter, for the initial phases of that and then growing that business. There is a fair amount of capacity available to us on that satellite as well so we would expect to be into the C-band services at the back half of this year. That again will take us into next year as with the KU-band services.