This was published 8 years ago
Avanti satellites fly to connect untapped African market to internet
Satellites make sense in Africa because they can provide internet access over vast areas and a dish is all that is required to receive a signal.
By Sophie Curtis
The second great space race is under way. This time, rather than putting a man on the moon, the aim is to make internet access available to the two-thirds of the world not yet connected.
The primary target is Africa, a continent with a land mass the size of the US, China, India and Europe put together, but with a population of 1.1 billion – less than India alone. It means traditional internet delivery, such as laying fibre cables in the ground, is often expensive and impractical.
This territory is covered by HYLAS 1 and HYLAS 2.
Satellite broadband is more economical because, although expensive to build and launch, once satellites are in orbit they can provide internet access over vast areas – a dish is all that is required to receive a signal.
Several companies have caught on to this idea. Facebook founder Mark Zuckerberg has announced his intention to bring internet to parts of the world that are currently unconnected as part of his Internet.org initiative.
Satellite coverage allows users to connect a computer or home network to the internet without the need for a telephone line.
Meanwhile, Sir Richard Branson is supporting WorldVu's OneWeb project, to put 648 micro-satellites into low Earth orbit to provide high-speed internet and telephone services; and Google has teamed up with SpaceX, founded by billionaire entrepreneur Elon Musk, which has a similar plan to provide internet access from space.
However, one British company is way ahead of the game. Avanti Communications, a London-based satellite operator, already has a satellite in space covering large parts of Africa – including South Africa, Zimbabwe, Kenya, Tanzania and Burundi – known as Hylas 2. Another, Hylas 3, is expected to be live for commercial service in 2016, and Hylas 4 is scheduled to launch in 2017, completing Avanti's coverage of Sub-Saharan Africa.
"From the outset, Avanti's business model was about Africa," says David Williams, chief executive and co-founder of Avanti. "The reason for that is the economics, the 'teledensity', the demographics of Africa strongly favour satellite.
"You also have a rapidly growing middle class with the emergence of revenues from offshore oil and gas production, and growing demand for mining products. There's plenty of capital in Africa now, so we think we're in the right place."
A rapidly growing middle class makes Africa attractive to telco entrepreneurs.Credit: AP
Williams studied economics at Leeds University, and after a two-year stint as the frontman of a rock band called the Watchmen, moved to London and went to work in commercial banking. He was still keen to pursue his musical dream, but found he had no time to form a band.
"It was around that time that some kids I was at school with became famous. They were called Damon Albarn and Graham Coxon, and I watched Blur become the biggest band in the world, thinking, 'I wish I'd done that'," Williams says.
While he was working as a corporate finance adviser in the late 1990s, trying to raise money for satellite companies, he met David Bestwick, an astrophysicist and "proper old-fashioned genius", who was working for Marconi Communications, and with whom he ended up co-founding Avanti in 2002.
Over four years, Williams and Bestwick petitioned the government for high-frequency radio spectrum, in exchange for plugging the gaps in rural broadband coverage.
"Although we were just a couple of geezers in a garage, we convinced the government that we should be allowed to have this spectrum licence," Williams says. "We explained that we would be the first country in Europe to have high-quality satellite broadband, meaning that everybody in rural areas could have all the broadband they wanted."
Avanti still had a lot of hurdles to overcome. After being turned down by 234 venture capitalists, Williams had to remortgage his house, take out a dozen credit cards and a £10,000 loan to get the company off the ground.
It wasn't until 2011 that the first satellite, Hylas 1, was launched into geostationary orbit, providing broadband coverage across Europe.
However, one of the main drawbacks to satellite broadband is latency. Compared with fibre broadband, satellite experiences a delay of about 400 milliseconds, because the signal needs to travel 35,786 kilometres to a satellite and back to Earth again.
For this reason, in areas where fibre broadband is prevalent, satellite is often regarded as a "fill-in" technology rather than a competitive solution. Although Williams claims there are only a few situations where latency really matters – such as high-frequency trading and real-time gaming – he knows the big opportunity is in places where fibre is not an option.
When Avanti launched Hylas 2 in August 2012, it quadrupled Avanti's satellite capacity. The company can now provide coverage to 27 per cent of the world's population, and is doing work in Africa, in partnership with the UK Space Agency, to bring e-learning to 250 schools in Tanzania and improving air traffic safety across the continent.
The company is still not out of the woods financially. The Hylas satellites launched later than investors would have liked, and it has taken time for Avanti to sign up government and corporate customers in Africa.
Despite the impending arrival of companies such as WorldVu and SpaceX in Africa, Williams says he is "intensely relaxed" about competition, because the demand for broadband in Africa exceeds the supply by 10 times.
He also says there are challenges the other companies will need to overcome, if they want to launch hundreds of small satellites into low-Earth orbit, including the need to return satellites to Earth when they run out of fuel, unlike those in geostationary orbit.
"Flying hundreds of satellites around and de-orbiting them and hoping that they all work and they respond to their commands creates significant flight risk; it's never been done before," he says.
"At the moment you essentially have some suppliers that would like Wall Street to pay them to build systems. We'll see how the Wall Street investors feel about taking the financial risk."
The Sunday Telegraph