CHANGING THE WORLD BY CONNECTING THE UNCONNECTED
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1 Market Trend CHANGING THE WORLD BY CONNECTING THE UNCONNECTED By Richard Schaap, Market Director Broadband Access at Introduction In a world where Internet access is coming to be regarded as an essential utility, not having access to broadband connectivity can severely affect quality of life. Large parts of the globe, especially those in rural locations, can find themselves cut off from the digital revolution that is happening all around us, harming their potential for growth and development. However, this is not solely a problem in rural or hard-to-reach areas. A recent market study released by the Wireless Broadband Alliance showed that more than half of the global urban population remains unconnected to broadband Internet, with 37% living in some of the world s wealthiest cities. As the number of Internet-enabled devices globally continues to grow, the demand for Internet connectivity is only going to increase can satellite Wi-Fi hotspots provide the answer? Rev.2 04/2018
2 Wi-Fi Hotspots Reaching the Masses Finding a solution that can provide mass connectivity in areas This lack of terrestrial infrastructure is one of the main reasons where terrestrial infrastructure is severely lacking is a major for millions of people in rural areas remaining deprived from concern for network operators, with the demand for Internet Internet connectivity. In many regions of the world, it is likely that access on a global scale reaching an unprecedented level. this infrastructure challenge will continue for the foreseeable future and this is traditionally when satellite becomes the In Africa, for example, more than half of the continent s primary connectivity solution. However, the cost of satellite 1.2 billion population has little-to-no broadband Internet equipment and capacity not to mention the transport costs access, with 400 million of those lacking even the most basic and national duties and taxes means that even a traditional levels of connectivity. These numbers illustrate a great potential satellite VSAT solution remains out of reach for many. for growth and a great opportunity for access solutions that can reach these difficult-to-reach areas, which are often vast and without the infrastructure to connect by more traditional means. Photo Courtesy of Liquid Telecom 2
3 A Growing Demand The irony of this situation is that many of these traditionally under-served countries and regions are seeing huge growth in the sales of smartphones and tablet PCs, bucking the global trend which shows smartphone sales are decreasing. Since 2012, there has been a significant market shift with consumers bypassing traditional personal computers in favor of handheld devices, opening a significant market for connectivity. Returning to the African example, the continent now has more than 200 million devices with the ability to connect to the Internet through Wi-Fi. This figure is expected to grow to 500 million by 2020, despite the fact that not all areas are covered by Internet connectivity. These market conditions have created enormous pent-up demand and a great business opportunity. Smartphone and tablet PC users are eager to be connected to the Internet to browse websites, conduct business and get involved with social media all at a price that is affordable to the end-user Miliion Units Standard Notebook PC Ultra-slim PC Tablet PC NPD DisplaySearch 3
4 Why Not DTH Or Mobile? Finding the right type of connectivity to reach the masses in such regions with an economical solution, is a difficult task. While mobile networks are a viable solution in builtup and semi-rural areas, the economies of scale that operators work to often mean that they cannot justify the required investments in even the most basic GSM mobile connectivity for rural and hard-to-reach areas. Similarly, while satellite provides an answer to the issues of reach and accessibility posed by mobile, the traditional solution direct-to-home broadband through a VSAT terminal poses significant problems in terms of Total Cost of Ownership for the end-user due to it being more commonly deployed in a pre-paid scenario. In this situation, what is required is a combination of the overarching connectivity that satellite can provide with the affordability, ease of installation and reliability that is craved by operators, service providers and end-users alike. CONFLICTING ELEMENTS! Recurring questions of satellite broadband access THIS WAY! NO, THIS WAY! SATELLITE BROADBAND ACCESS Total rendered Equipment cost >700USD Terminal Shipment Installation Customs Recurring monthly fee >50USD INDIVIDUAL PEOPLE Low average monthly income per capita: From 10 s to a few 100 s USD Very short or no commitment for service Used to pre-paid services 4
5 A Community Solution A solution to this imbalance of supply and demand is to create Wi-Fi hotspots that are reliable, easy to install and above all affordable to the masses. Several business models can emerge from this kind of deployment. One example is to create a kind of micro business model for Internet access provided on an access voucher basis. With this low entry-barrier business model, hotspot owners such as private shop owners invest in a satellite Wi-Fi hotspot terminal and sell voucher-based access to consumers. After the initial low investment, they do not have any recurring costs, but receive commission from the network operator on the revenues generated from access vouchers sold. Although the satellite Wi-Fi hotspot solution is slightly more expensive from an initial investment perspective, the fact that the investment is generating revenues from a large number of end-users means the Total Cost of Ownership per user represents just a fraction of the cost when compared to a traditional-single user VSAT terminal. Another model could see rural shops or service stations provide Internet access as a service to their customers within their normal local spending. This model is attracting more business as there is an additional provided service element. The main benefit of this model is that the end-user has no investment and has no recurring service procurement obligation, but will buy voucher based Internet access based on their available finances. As an example, there are currently shops in rural Africa that provide electricity to their customers, who very often do not have access to electricity in their homes to, for example, charge their phones. Again, providing additional services in the retail environment increases the economic activity at the point of sale. Community Wi-Fi will likely be an important delivery mechanism, not just for initiatives like internet.org, but also for the LEO constellations that are expected to deploy in the timeframe and for whom Middle East & Africa will be importants markets. 5
6 Wi-Fi Hotspots on Dialog Adding a Wi-Fi service element to the Dialog platform extends its service range, enlarging market reach and increasing service revenues for operators. The flexibility of Dialog means that consumer Wi-Fi can be added simply and cost-effectively by adding a Wi-Fi hotspot, including the required OSS/BSS solution for end-customer management. has already delivered a significant number of its Dialog platforms worldwide, with many opting for the community Wi-Fi hotspot solution as part of the service delivery. WI-FI SOLUTION OSS/BSS WiFi Hotspot Terminal 6
7 Wi-Fi Hotspots Conclusion The number of end-user devices requiring Internet connectivity is increasing, requiring a suitable and economical technology solution. Creating community solutions that are reliable, easy to install and affordable is an essential element for operators that are unable to justify investments in mobile infrastructure, and also for those end-customers for whom individual VSAT terminals and the associated recurring service procurements remain out of reach. Community Wi-Fi hotspots such as those created on the Dialog platform provide a central technological hub that can deliver a larger variety of services for both business and residential users, while providing operators with a platform that is flexible, scalable and efficient. 7
8 SHAPING THE FUTURE OF SATELLITE COMMUNICATIONS More Information: Send a mail to: sales@newtec.eu Visit our website: Contact our Offices: Cy N.V. Laarstraat 5 B-9100 Sint-Niklaas Belgium Tel: +32 (0) Fax: +32 (0) Follow us: Twitter.com/_Satcom You Tube Youtube.com/Satcom in Linkedin.com/company/newtec Slideshare.net/newtec_satcom North America Europe MENA China Asia-Pacific South America Europe North America South America Asia-Pacific China MENA Tel: Tel: Tel: Tel: Tel: Tel: Fax: Fax: Fax: Fax: Fax: Fax:
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