SAT-3 may be filling up actually. At least there is no room for price reductions as price elasticity would oversubscribe capacity in a snap. Together with other people we have looked into that for comparable markets.

Q: So why is Telkom not rolling out a new cable ASAP?

A: Politics in RSA + maximising value as long as possible. they would not be alone in a new cable.

(I heard they were upgrading the existing cable instead, which implies that there’s unused capacity, and that profit rather than capacity is being maximised, as we’d expect from any good capitalist – Chris)

This is exactly the problem with deployment strategies for EVDO/UMTS and WiMax. All are high-ticket technologies, whose implementation can only be handled by major asset possessing entities. Almost by definition, that does not include local players.

On the other hand, technologies like WiFi have evolved from primarily small local area networking to include ‘respectable’ distance (15-25km very doable in flat terrain with low learning curve) point-to-point broadband, thus making it adaptable for more than first-mile delivery. Deployment can easily be handled by local small businesses or communities.

Of course the total cost involved for complete continental coverage will rival or exceed that of a LEO project (but will that be true if the SAT ground nodes are fine-grained across everywhere people live?). However, the important difference is that the large bulk of that money will be spent upfront locally, and, critically, ongoing maintenance costs will be almost totally local.

In contrast, O3B is going to earn its keep outside Africa.

Well, seems like the entrepreneurial Greg W is at it again. This is probably of most interest for landlocked countries with toll gating neighbours. And Greg no doubt has some perspective on that.

No, this is not even close to a replacement for fibre. That is just a false and misleading hope. It is just what they say on their site: A bet on fiber roll out being delayed to justify a gap filler like this one in dev country markets now taking off. Just compare the system speeds with any of the new cable systems. Orders of magnitude.

So I cannot help wondering if this is not a little bit late, just as terrestrial GSM phone systems outflanked low orbit mobile phones a decade a go? But all the arguments on the site are reflecting the remaining potentially viable position for satellites. Still, within the commercial centres, like capitals and district centres, satellites will rapidly fade away as electrification will bring fibre. Otherwise you simply cannot run a modern power grid. Simple. Costs for the hopeless power gen and transmission we see today in many places will be un-sustainable. Shaping them up will provide piggy backed fibre for free. The circumstances for this process need to be discussed more.

It will, however, be interesting to observe the effects any low orbit high speed satellite system will have on the various lock-in/lock-out games played on backbone connectivity in Africa. One could actually expect even more “Open Access” interest among submarine cable partners (= pushing cost sharing of the giant fixed cable CAPEX & running cost to the max) to avoid volumes (and ~@~@) being pulled into alternatives. Being stuck with a higher cost base for the submarine cable volume left in “our” cable project and not having others locked out from the end market is not a good prospect for anyone now leading the race. But the far biggest factor in this game will be the other sub-marine cable “next door”. Some predatory pricing will no doubt pop up to complement the de-facto licensing shelter the current licensees enjoy.

That brings us back to the InfoDev paper. Like many of the papers coming out from that mill it is carefully avoiding drilling through the ice in its analysis. Too bad as the authors are no doubt clever people with an intellectual and policy background capability. But if you claim in the title that you are going to cover the policy aspects on why things are the way they are you simply need to puncture the outer shell…. Or are there a PartII coming: Conclusions, Reasons for slow change, Recognising Bogus Arguments and Acid tests on Policy Change? 

In a growing African telecoms market, with telecom companies turning to be the single biggest taxpayers in some places, demand, not least from fast expanding Internet traffic, is now commercially justifying leaving VSATs and microwave links behind for fibre. Financing is no problem. Policy/political risk is.

Not least is this true for the small operators overshadowed by the established, politically well connected players. Yesterday it was the PTTs, now it is a handful of pan-African mobile phone operators.

Interestingly enough, the report makes reference to important policy discussions elsewhere, like OFCOM spectrum liberations, where their officers expressively say on the starting point that is “Not our objective to maximise Exchequer revenue” but “maximise consumer and citizen value (social welfare).”

How often is the opposite not the case in African discussions? The report should have poked more into crucial indicators to serve a much needed purpose of helping local journalists and others understand the policy issues, some of the newspeak and what perspective that really controls change.

Looking forward to see a 2.0.

This sounds like Teledesic over again (on a much smaller scale). The subject “Google Broadband” is misleading as Google is but a small investor in this startup company which is headed up by Greg Wyler who apparently has a “mixed” track record in Rwanda (he bought the PTT and not everyone was happy with the outcome). Still he is a brave man. Just like Bill Gates and Craig McCaw before him (they were behind Teledesic, which failed).

(Sorry about the title – it was hard to think of a catchy way to describe this, and I think it is Google’s ultimate aim – Chris)

According to the O3B website these satellites will deliver (vs. conventional geosync satellites):

5x to 10x better Internet access speeds
5x to 10x lower costs
5x lower latency

So. Does anybody think this is good enough? Back when Teledesic was trying hard nobody thought so. I have recently been working on a financial justification for a submarine cable project for some mid-Pacific islands and I have two problems with the O3B proposal:

In an island/state served only by satellites, and not many of them, the telco is paying ~ 850 times more for Internet bandwidth than would a terrestrial customer in a competitive market. A 10x improvement would lower that to 85 times. That still leaves a “digital divide” that is enormous. Telecom is a major input into a successful economy; who can thrive with an 85x disadvantage relative to much of the world?

For Africa this seems especially absurd. Africa is not a tiny island in the middle of an ocean where this might be the only viable option (apart from a geosync solution). Africa is a huge continent with a huge coastline. There is no reason (other than Africa’s own internal chattering and bickering) why Africa should not have 2-3-4 submarine cables and many terrestrial fiber projects to distribute and connect them.

(Terrestrial fibre projects are not making much progress, hence Google’s frustration – Chris)

My second problem is that such announcement, using the Google brand as a promotional factor, given the disastrous past track record of such projects (Iridium, Teledesic, and even Project Oxygen’s effort to serve developing markets with submarine fiber), is, in a nutshell, vaporware. Yes this network might get built someday and if all the numbers work out it might actually sell bandwidth for 85x what it costs in most of the world. My worst nightmare is that this announcement puts a freeze on some fiber projects that might otherwise get built.

To be fair to O3B and satellite services in general they do have a role to play. A project like this one is a game changer, but in the geographic dimension only. IP EVERYWHERE is a big deal for certain applications. But let’s not fool ourselves. This is high cost bandwidth that can be rapidly deployed to any location (within the equatorial belt the network serves). It will be good for humanitarian works, disaster relief, military adventures, cell phones for the super rich, cell phones for the super poor, but what it will not do is utterly transform an economy by making it a true peer in the global information space; it will not bring the kind of bandwidth that lowers the marginal cost of internet access for a school or hospital to virtually zero.

Fiber is a game changer in the capacity dimension. The capacity of a fiber connection is simultaneously vast by any standard and yet perishable. Unsold capacity is “lost” in a sense that is not the case with a LEO type satellite network, where capacity that is NOT sold over Kenya is capacity that might be sold over Uganda or Dem. Rep. of Congo. Once a fiber network is built costs should drop to the point where much of the capacity is being utilized.

(I thought that SAT-3 was under-used, but Anders Comstedt says it’s full or nearly so – Chris)

Once a global satellite network is built it will tend to seek and serve the customers willing to pay the highest prices; there will be leftover capacity that can be sold at lower prices but it is a different dynamic than fiber. You still have the militaries and global NGOs in the market and invariably raising prices for everyone.

(International competition for that bandwidth may be an important factor, depending on whether the satellite network can actually be used for long haul by hopping between satellites – Chris)

There is a tendency for projects like this to be promoted as “silver bullets” that will solve the entire “problem” with one simple platform and investment. They can’t live up to those expectations. This project is not going to lift 3 Billion people out of poverty. I hope that when that becomes clear Google and others will get back to laying more fiber. There is no substitute for it.

What is not clear from the page is who is expected to run the ‘business’, which in India (and many countries) is completely licensed out (ie, the spectrum, aside from other technicalities) to large telcos.

I understand the situation in many parts of Africa is equally grim.

As far as the Google LEO goes, let me quote verbatim what I posted to our local community radio list, where someone had suggested this service might be good to use as an unlicensed FM community radio (FM broadcast licensing is incredibly difficult in India):

“120ms for the first hop does not seem like a very sensible proposition, unless the second hop is straight to a global backbone, in which case there will be no scope in fact for local ISPs (who till now are not exactly known for their earnest efforts to reduce costs for poor Indian consumers).

As far as countries like India are concerned, it (imho) makes a lot more sense to work closely with NIXI (the local IP exchange) to ensure a pure local loop for community networks sharing (open source) audio material between themselves, and thereby avoid as much of both delay (latency) and expense as possible.

btw, a single 120ms hop means 240ms for direct access between any two points in India, and longer if either or both then have to traverse more networks to pass any single packet between themseves.”

I am afraid I do not know what the current situation is regarding supply of international bandwidth to India, but I fear the situation is pretty well locked up between three or four very large players. I would be happy to be corrected.

However, having said that, the service seems directed towards Africa, so perhaps this discussion is not relevant.

VNL claims to have developed a solar-powered base station for India: http://indiainvents.blogspot.com/2008/07/solar-powered-gsm-base-station.html . While this could also power the satellite link, as you point out, the additional power required is likely to significantly increase the cost of the base station.

You’re right that I misread the FT article and the ground stations will not necessarily have moving antennae, although if they don’t then the risk of them interfering with each other is much higher.

I also disagree with the limitation mentioned regarding the powering issue. The service is meant for cellular or other telecom service providers, and those will need a considerable amount of power to operate anyway.
Although claims have been made of low power GSM stations that can operate economically with solar power, this has still to be proved and in case this happens, the same photovoltaic approach could be used to power the satellite link.
The earth antenna might not need to be steerable to link to a low orbit satellite.