For African ISPs Like SkyVision, the Middle is a Nice Place to Be

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PARIS — You know you’re in a good business when people buy your service before securing a stable electric grid, water supply or road network.

That is the position of Internet service providers (ISPs) in Africa, whose 55 nations are showing brisk demand increases for telecommunications even as more-traditional essential services are lagging.

SkyVision Global Networks Ltd. is one of those service providers. Based in Hertfordshire, Britain, SkyVision has been in Africa for 15 years and leases bandwidth on nearly a dozen telecommunications satellites – including Nigeria’s NigComSat – in Ku-, C- and recently Ka-band.

SkyVision most recently booked capacity on Bermuda-based ABS’s ABS-3A satellite, an all-electric-propulsion satellite that has begun operations at 3 degrees west longitude overlooking Africa. SkyVision is launching two video platforms, one using the DVD-S transmission standard, and the other to operate in DVB-S2, for standard-digital and high-definition programming.

ABS Chief Executive Tom Choi has said his company is positioning its fleet to be able to offer low-cost bandwidth to survive a time of sharp downward pressure on satellite prices, especially in Africa.

That’s music to the ears of SkyVision Chief Executive Ori Waterman, whose company is branching out from corporate-data-network services. Waterman discussed the evolution of the African market.

What led to the ABS satellite capacity deal?

The new ABS-3A satellite is well suited to our needs and will allow us to launch a new broadcast platform. Up to now we have been focused on selling data in Africa. We think demand for IPTV [Internet-delivered television] and video connectivity in Africa will continue to be strong on the continent. We plan to open more platforms. This is the first.

Satellite bandwidth pricing is dropping in Africa. Is this good news for you?

Prices are dropping because end customers are demanding to pay less. And as an ISP we buy capacity from satellite operators and sell it to our customer companies. We are under very, very strong pressure from our customers, and in turn we pressure satellite operators.

But as is the case for all telecom markets in the world, while the price is going down the demand is going up. In Africa there are a lot of satellites covering the continent and the demand for bandwidth is very high.

I recently returned from South Sudan, which may be the youngest country in the world. They don’t have roads, they don’t have water or electricity. But you see cellular coverage and Internet 3G everywhere. But with the demand for bandwidth, we need to supply better prices and coverage.

When you look at the number of TV channels per African consumer compared to other regions of the world, and the low penetration of HDTV, and the coming analog-to-digital shift there, it looks like a huge potential. Do you believe the rosy forecasts?

Yes I do. In Africa you see smartphones selling for $10 or $20. There is already 3G and in the near future they are going to have LTE [a mobile broadband transmission standard]. So you don’t need anything else to stream it to your device.

It’s a global world now. They are aware of Google, Facebook and Youtube. The next thing is going to be broadcasting through video streaming. So yes, we really believe. There are not that many pay-TV customers in the continent. The potential is huge.

The ISPs are broadening their approach. Everyone can approach customers as long as there is an ISP. And we are now seeing RFPs related to the continent going from analog to digital. I believe there is going to be a tremendous change in TV consumption there.

Even in South Sudan?

Even in South Sudan. I was using 3G from the cellular operator there doing video calls on iPhone via Facetime – all in a place where there were no roads. They are taking the water out of the Nile, with trucks. Electricity goes out every two hours. But there is great 3G.

We are now implementing LTE 4G in Chad. Chad has the same issues, a landlocked country in Africa, and LTE demand is rising there.

Is overcapacity inevitable given the number of satellites now serving this market and on the way?

Overcapacity is going to be good news because the prices are dropping and people can never get enough data.

The advantage of SkyVision as a service provider is that we have a lot of people on the ground in these markets. We have six offices in Africa with local salesmen, technicians and other people who know how to implement services in Africa.

The challenge is moving from being only a data or bandwidth provider, to being a supplier of the entire solution. Our existing customers – the telcos, the ISPs and the satellite TV broadcasters – are more than happy to purchase additional services from us.

Prices are going down even as the service is getting better. Facebook announced they are launching a satellite platform over Africa with Eutelsat. This is great news for a company like ours because Facebook will need someone to implement it on the ground – to contact the end user, install the dishes, spread the satellite connectivity with microwave or WiFi, and make sure the service is of good quality. And someone needs to know how to do the billing, to sell the capacity and to do the maintenance. They need feet on the ground.

This is our advantage and this is what we are trying to leverage with the entry into broadcasting.

You are in 100 countries. Do you have full African coverage?

Yes, we cover the full continent with a few satellites, with C- and Ku- and Ka-band capacity. We’ve been in Africa now for 15 years.

How much capacity do you now have under lease at SkyVision?

We are a private company and that is confidential. But we have a lot. We have about 2,000 links in the continent, with more than 400 customers – all corporate customers, and governments and ISPs. We are quite big.

We may be the biggest player that is solely focused on Africa. You see lots of global VSAT operators in Africa of course.

Do those 2,000 links include fiber?

Yes, but we don’t have much fiber stuff. Most of our business is through satellite.

Who is your Ka-band provider?

NigComSat in Nigeria. We buy Ku-band capacity from them and we are planning to launch a Ka-band platform too, in agreement with them. We have a good relationship with them.