Monday, June 15, 2015

Kacific Aims to Disrupt Traditional Satellite Valur-Price Relationships

Satellite entrepreneurs such as Kacific now are aiming to disrupt the traditional value-price relationship for satellite communications, using new technology as much as two orders of magnitude better than prior platforms.

In the past, price points of older satellite bandwidth caused decision makers in island countries of the Pacific and Southeast Asia to rule out satellite as an economically viable way to enable connectivity in their country, focusing on cable to power fixed and mobile internet networks, notes Cyril Annarella, Kacific executive director.

But new high-throughput satellites are changing the economics of the access business because they “allow data connections at a much lower cost per bit than older generations satellites,” says Cyril Annarella, Kacific executive director, who will be speaking at the upcoming Spectrum Futures conference Sept. 10-11, 2015 in Singapore.

High throughput satellites provide as much as two orders of magnitude more throughput than earlier generation satellites, significantly reducing cost per bit profiles.

ViaSat-1 and EchoStar XVII (Jupiter-1) provide more than 100 Gbps of capacity, which is more than 100 times the capacity offered by a conventional Ku-band satellite, for example.

When it was launched in October 2011 ViaSat-1 had more capacity (140 Gbps) than all other commercial communications satellites over North America combined, to illustrate the capacity advances.

Kacific is building on several technology advances, in additon to availability of HTS. The Ka-band spectrum inherently “carries more information,” says Annarella, much as millimeter wave frequencies or even 2.5 GHz frequencies can carry more information than signals of equivalent bandwidth at 800 MHz.

Also, the success of HTS-based services in the United States,  such as Viasat and Hughes networks Jupiter, has driven the cost of user terminals well below US$500, enabling an interesting mass market value proposition that older generations of satellite services were never able to achieve, Annarella says.

In many markets, including Indonesia, the Philippines, Papua New Guinea and the Island nations of the Pacific, satellite might be the only affordable way to bridge the digital divide, Annarella argues.

Kacific believes there is a mass market for Internet broadband if the price to bring internet at the point-of-consumption can be brought sufficiently low. In most of its target markets, the existing choice  is mobile access at speeds no faster than 2 Mbps.

Kacific plans to provide more than that, especially using anchor sites at government buildings or schools as community access points.

In its target countries, Kacific is “currently the only possible proposition that completely addresses the requirements of universal access plans defined by the regulators,” says Annarella.

Kacific was founded mid-2013 by a group of experienced entrepreneurs with space, finance and IT background, he says.  

The first phase of the project logically involved convincing potential customers of service viability and affordability, defining technical specifications and raising capital.

“This phase is now closing, and the second step of the project, finishing late 2017, will see the construction and launch of Kacific first satellite K1a, for a commercial service opening in the first quarter of  2018.

Kacific says it is a business-to-business bandwidth provider, selling to other satellite service providers such as BIGNET, telecom operators such as OurTelekom and governments including Kiribati.

In other words, Kacific will be a wholesale provider, enabling other retailers to create consumer, business or governmental services.

Although the core of its intended market are islands of the South Pacific, Kacific Broadband already has signed a contract with Indonesian satellite provider BigNet. The US$78 million long-term agreement with Kacific Broadband Satellites entails capacity covering all of Indonesia, with a particular emphasis on providing good quality, affordable Internet to rapidly developing areas in Eastern Indonesia, Kacific Broadband says.

Secondary cities and villages are the target, especially schools, government buildings, enterprises and community Internet access points.  

The deal is the seventh, and largest, signed so far by Kacific Broadband Satellites. Teletok, the local telecommunications company of Tokelau and sole service provider, is another customer.

Tokelau, composed of three small atolls situated north of Samoa, is a Polynesian territory of New Zealand with a population of 1,400.

Kacific’s target audience is a familiar market: up to 50 million communications users on remote Pacific islands typically unserved by undersea cable access. That also includes 13 million people who live on outer islands.

Also, as is the case for many countries of the Caribbean, there are huge spikes in demand caused by tourist visitors numbering about two million a year.

Also, 40 million people live in locations surrounding the Pacific Ocean, such as Eastern Indonesia, where there also is little Internet connectivity.

Demand models show that more than a million latent Internet users live in the extended Pacific islands, where there are high levels of education. Over a million latent Internet users could be added if the region was supplied with levels of connectivity equivalent to those found in developing parts of Asia, Africa or Central America.

Kacific will use the latest generation Ka-band high throughput satellites and spot beams, delivering Internet access at speeds up to 50 Mbps to any single location or user.

The business plan calls for Kacific to supply wholesale capacity, enterprise and consumer services, with the launch of the first satellite in the fourth quarter of 2016 and commercial service early in 2017, with full capacity reached in 2020.

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