Africa has a population of more than 1 billion people and there is still significant lack of terrestrial infrastructure in many countries, broadening the digital divide. This scenario means satellite is well placed to take up the slack in many sectors from DTH and broadcasting, cellular backhaul, to oil and gas, among others.

Cellular Backhaul – MTN and Vodacom

According to the latest World Bank and African Development Bank statistics there are 650 million mobile users in Africa. Two of the largest operators across the region are MTN and Vodacom. Deon Liebenberg, Vodacom’s managing executive for large enterprise and international business, says satellite backhaul is playing a key role for the company in connecting rural areas and developing countries. “The cost of owning and operating mobile devices is continuing to fall and satellite links have helped to roll out services in these rural areas quickly and effectively. At Vodacom we are lucky to have a close working relationship with the satellite industry and, as such, we actively engage space segment providers to offer efficient spectral density and low-power consumption on their satellites. This is with a view to ultimately driving down the cost per MHz. Due to the dynamic nature of satellite technology, we have also built strong relationships with the original equipment manufacturers (OEM) to ensure they remain innovative and aligned to industry changes,” he adds.

However, using satellite is not without its challenges, and Liebenberg cites signal delay as the biggest technical difficulty the operator has to deal with. The use of geosynchronous satellites creates issues since they are so far away from Earth. “These satellites are about 36,000 km away from the Earth’s surface. This means that the time it takes for radio signals to reach and return from the satellite can result in signal delays. However, the good news is that there are now technologies that help to mitigate the effect of satellite delays,” he says. “Most OEMs now have these technologies installed in their devices. Another technical challenge is the complexity and cost of deployment – large earth station antennas and C-band VSATs require specialized deployment by trained installers. The rural locations of these satellites can also prove challenging to reach.”

Over the last five years, Vodacom has invested more than 38 billion South African Rands ($3.8 billion) in its network. This investment has gone into a number of areas from the rolling out of new base stations, to increasing the amount of self-provided transmission to its sites. On top of this, it has also upgraded the software in its base stations to cater for HSPA+ and 4G technology. Despite this investment, Liebenberg says satellite will remain a key part of Vodacom’s toolset.

“Satellite applications have evolved over time, before the advent of terrestrial solutions, satellite was used to deploy traditional networks. As the market matured, satellite applications evolved; now we use satellite for long distance learning, content distribution, live billboards, etc. As such, we believe that satellite will continue to play a major role as we serve our customers. Satellite is also key when it comes to building redundancy into the network, as a gap fill for terrestrial services and as additional routing for traffic engineering,” he says.

While the company has invested in complementary technologies to satellite, it expects to see an increase in how it uses satellite. “In the short term we expect to see an increase in its use in developing countries where the in-country networks are either not in place or provide poor coverage due to non-commercial viability,” says Liebenberg. “Satellite is also useful as a backup in instances where fiber infrastructure has been deployed but the network is affected by incessant cuts and outages. It is also interesting to note that the United States still makes use of VSAT and has one of the largest VSAT deployments in the world, this reinforces that satellite has its place in the overall technology landscape.”

MTN is another big player in Africa and, in total, has approximately 200 million mobile subscribers across its mobile companies. Kamal Fayed, general manager of global carrier services for MTN, admits the main needs for satellite backhaul are primarily for remote Base Transceiver Station (BTS) coverage, especially for the areas not connected by fiber or microwave to provide customers with voice and Internet services. However, other trends are emerging.

“The use of satellite for international connectivity has decreased in all the market where relatively resilient network of submarine and terrestrial backhaul is available. For certain markets in West Africa satellite is still required as main or alternative access to international connectivity for voice and data,” Fayed says. “We have two main satellite capacity providers and satellite capacity is contracted centrally to achieve more efficiency. There are more bandwidth offers in the last two years due to the launch of new satellites and the development of new regional and international submarine cables.” He admits MTN’s demand for capacity has been stable during the last three years due to the migration of services to terrestrial microwave and fiber. Furthermore, he says the deployment of new optimization equipment supporting CnC has provided better bits/Hz ratio.

Like Vodacom, Fayed cites a number of technical challenges when using satellite, with frequency interference being the main issue, as well as a lack of satellite capacity. “[One of the challenges is] bandwidth limitation on legacy satellites, but satellite providers are planning new satellite generations that will partially overcome the bandwidth limitation. Also unlike submarine cables, which can be upgraded at a fraction of its original cost to support increase demand, satellites cannot be upgraded to increase capacity. The last, but not least is delay, where satellite transmission delay is in excess of 300ms while cable delay is not more than 100ms between Africa and Europe. The delay affects the voice and video conferencing applications and Internet browsing experience. Satellite operators should innovate to offer much higher bandwidth capacity at lower cost that will compel the mobile and fix operators to increasingly rely on satellite,” he says.

MTN mostly looks for C-band satellite capacity with coverage from Africa to Europe for its operating companies in Africa due to the reliability of C-band in rainy conditions.

The changing dynamics of the African communications market could mean an increased demand for satellite in the future. “Satellite capacity is key for operators. Satellite has allowed mobile operators to deploy and expand mobile services with high flexibly in the African continent. With the gradual expansion of the terrestrial backhaul, the satellite terminals have been moving continuously to cover new areas. This led to a decrease in satellite demand for domestic backhaul in the last three years. This trend may change with the increase of demand for data services and the explosion of low-cost mobile devices,” says Fayed.

The Oil Company – Tullow Oil

While Tullow Oil is an company with operations across the globe, it has a key presence in Africa. Every eyar, the company has continually developed five to six new sites in the African region, and Ian Theophilus, global infrastructure manager at Tullow Oil, expects this trend to continue. “These [sites] go from North Africa all the way down to South Africa and I see that continuing over the next 10 to 15 years. I think there will be an increase in exploration activity in some of the emerging locations in Africa,” he says. “As far as satellite technology goes to support that, I do see a reliance on satellite bandwidth when talking about remote location exploration. A lot of the locations that Tullow develops for exploration activities are very, very remote with very little fiber technology present in those locations. There will be an increase in the amount of satellite bandwidth we use locally to support these operations.”

Getting satellite capacity at the right price is an issue. Theophilus cites a recent example of a tender in which he hoped for greater transparency. “A number of satellite providers come to us with a cost, but this can vary significantly. Provider A could have a significantly different cost to Provider B and yet they are pricing the same service utilizing the same satellite,” he says. “We have just recently gone through a tender for some offshore work in Africa. Going to three to four providers in a tender process means we are finding they are all pretty much at the same level technically. You might find one company is stronger in the onshore area rather than the offshore area, but the pricing costs can be significantly different. There was a significant cost difference between providers for the same service, although the installations costs were similar. There needs to be complete transparency on these costs to allow exploration companies the ability to project costs more accurately.”

The DTH Provider – MultiChoice Africa

MultiChoice Africa has 4.5 million subscribers in South Africa and 2.3 million in other countries in Africa. Gerdus van Eeden, MultiChoice Africa’s chief technology officer, predicts that in 18 months, the numbers outside of South Africa will be more than they are in inside. The company operates in 53 markets in sub-Saharan Africa, of which van Eeden says the big ones are Nigeria, Kenya and Angola. “Angola is seeing a lot of growth. Zambia, Ghana and Uganda are also seeing strong growth. I would say these are the major markets in the 53 separate markets,” he adds.

The company is one of the biggest acquirers of satellite capacity in Africa, currently using 40 transponders across two satellites. “We are growing steady. We use quite a lot of that capacity for push Video-on-Demand (VoD) services. We have around 15 HD channels running. The rest is dedicated to SD. So, we will steadily increase our capacity usage but I don’t think our market will grow hugely,” Van Eeden says.

He admits the company is seeing an emergence of middle classes not just in South Africa but also in other markets across the region – some interesting customer dynamics are taking shape. “Unlike what some people might perceive and think, those customers are demanding subscribers; they know what they want. They are far more sophisticated than people might think.”

The role of OTT television in Africa is hard to assess, given the lack of terrestrial success. However, van Eeden does not believe satellite broadband is quite where it needs to be to make an impact in the region. “Broadband satellite is available in some places. They are very expensive in our kind of market. It is very limited. If we offer a broadband service, it has to be uncapped, high speed, high quality service to deliver to our customers. … The business model around satellite broadband, even though there have been massive improvements, is just not there where you can offer a high quality service to customers that they can afford. We have been looking closely at what is happening in the United States, but it is very niche. That niche in our markets is very small, it is not something we are particularly interested in doing,” he adds.

With all the recent talk of 4k, a key question is when it might come to Africa. Given MultiChoice’s position in the market, it is likely that the company will be one of the first 4K players in the region. However, with the number of HD channels not exactly high, it could take a while for this technology to see the light of day in Africa. “We might put up a 4K channel to start experimenting to see how the dynamics work, but there is no timeline in terms of when we might put up a 4K channel. Even in South Africa, there are only around 15 HD channels. A lot of our premium channels are in HD. I doubt that we will have massive further growth in HD. I think there will be steady growth. There is still a lot of SD knocking around. It is a difficult economic model for operators. We don’t have a drive to convert all of our channels to HD by a certain date,” says van Eeden. VS