O3b and other satellite communications companies are bullish on the prospects of the African wireless communications industry. O3b Networks CEO Steve Collar sees growth opportunities in the region.
Africa's poor telecommunications infrastructures and its overall economic condition pose a major challenge for satellite broadband providers like O3b Networks. According to Collar, the company recognizes the different types of challenges posed by developing markets like Africa, which are quite different from industrialized markets with advanced telecommunications facilities.
O3b expects to play a major role in advancing the mobile telecommunication landscape of the region. O3b's existing satellite communications network can supply the much needed mobile backhaul demand of cellular phone carriers in the continent. O3b said there is a great deal of unmet broadband demand from operators in various African countries. NSR satellite analyst Jose del Rosario notes that O3b growth would also benefit the region's economy.
International satellite communications operators like O3b can reduce the operating costs of telcos while creating strong market niche. Moreover, O3b has the available platform for 3G and 4G services with good OPEX structure and inherently lower latency compared with geostationary satellites.
Many investors are looking at Africa now where there is a real demand for satellite services. However, there is one caveat for O3b. Although operating expenditure is not a problem for O3b, the cost of capital expenditure can be too high.
Another wireless communications provider looking to grow in Africa is France Telecom (Orange), which has one of the most recognizable international brands and operations in the world. The company is delivering satellite communications services aimed at "Orange" countries in Africa.
Veronique Disdet, head of Orange’s satellite factory, finds terrestrial network too expensive. Local telecommunications providers cannot rely on terrestrial transmissions in several rural areas.
Microwave coverage is nothing compared to satellite. Communications satellite can address all kinds of communications needs such as GSM, mobile backhaul and VoIP. Telcos and ISPs are expected to buy more satellite capacity to address the backhaul and wireless data transmission needs in remote areas.
France Telecom operates the Telecom 2D satellite which will be decommissioned next year. It is thus expected that the carrier may be preparing for an aggressive capacity acquisition to serve backhaul demands in the region. Without satellite to provide mobile backhaul , covering remotely separated areas with low population density would be a great challenge.
Africa is indeed a vibrant market for satellite operators. Towns and villages are embracing the digital age, and the demand for mobile connectivity will make rural satellite communications as indispensable as fiber optics networks in cities.
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