New satellite connectivity model set to empower township/rural entrepreneurs
BUSINESS| Aug. 17, 2012, 9:02 a.m.
Maxwell Technology has launched a new product, Satellite Hot Spot, which it says has the potential to transform the business model for providing connectivity to underserved communities in townships and rural areas.
World Bank research has shown a direct correlation between broadband penetration and gross domestic product (GDP): every 10% increase in broadband penetration increases economic growth by 1.38%.Broadband rollout is thus perceived as a vital driver of desperately needed job creation in South Africa, which is why it is a flagship project of the Department of Communications.
“However, finding the right business model for low-income areas where computers are in short supply has proved to be difficult,” says Kallie Carlsen, technical director at Maxwell Technology. “The problem has always been the high costs of putting in terrestrial infrastructure as against the lower rate of return. Satellite has always seemed to be the best technical alternative but, again, the business model hasn’t been right—until now. When we came across this product we were blown away because it has the potential to turn this sector on its head.”
The Satellite Hot Spot product is offered by Sat-Space Africa, a leading provider of reliable and innovative solutions to Africa’s connectivity challenges. It uses the AMOS 5 satellite to provide connectivity to even the most remote areas — with only onsite satellite dishes and routers required.
The product is aimed at rural entrepreneurs wanting to set up Internet cafes, lodges and hotels situated in remote areas and even wireless operators looking for a stable alternative or addition to their terrestrial infrastructure.
The key, says Carlsen, is the Satellite Hot Spot’s innovative billing model. The traditional per-month billing model means that the client is charged for bandwidth even if it is not sold on to end customers.
By contrast, the Satellite Hot Sport uses a router to connect to the Sat-Space billing system, allowing the entrepreneur to purchase vouchers per end user—in this way, connectivity is only charged for once it is used, effectively creating a prepaid model.
“This billing model is a huge innovation in the satellite business, and we are first to market in Africa,” says Shimri Lotan, the sales director of Sat-Space Africa. “We are creating the conditions to make Internet connectivity a reality for those living in remote areas. Every dollar invested in Internet connectivity has an immediate impact on the education, self-development and welfare of users.”
“The prepaid approach was pioneered here in South Africa and, one could argue, lies behind the phenomenal growth of our mobile market,” Carlsen observes. “I believe that by applying it to satellite connectivity, we are now in a position to change the dynamics of the broadband market in our underserviced areas.
It’s all about removing the risk for the resellers of connectivity, be they township/rural entrepreneurs or tourist destinations. The business is always cash positive and this means that it will be in a position to offer a cost-effective product to its customers—and because the cost is based on time and not bandwidth, the connectivity experience will also be superior.”
MORE BUSINESS NEWS
TNM first quarter net profit jumps to K1.8 billionMalawi's mobile telecoms network service provider TNM continues to realise an increase in net profit from operations. Read More
Revenues from tablet games to tripleNew data from Juniper Research has revealed that by 2019 worldwide revenues from tablet games will reach $13.3 billion – a threefold rise on the 2014 figure of $3.6 billion. Read More
Airtel Uganda hosts high value customers at Business Leaders’ ForumAirtel Uganda has hosted an Enterprise Expo in Mbarara district, Western Uganda, as part of efforts to provide practical and modern business solutions to its high value customers. Read More
Safaricom, Airtel complete yuMobile dealSafaricom and Airtel have completed the US$120 million acquisition of yuMobile from Essar Telecom. Read More
GrowthAfrica, Usahibu partner to solve SME accounting issuesKenyan accelerator GrowthAfrica has partnered cloud computing firm Uhasibu in a bid to address the accounting and financial software needs of East African startups and small and medium enterprises (SMEs). Read More
Top 10 risks worth considering when expanding into AfricaCompanies planning to expand across Africa must make a concerted effort to understand the risks, and not assume they “know” Africa, says ContinuitySA. Read More
Shop Soko connects Kenyan artisans to lucrative international marketsA new e-commerce platform, Shop Soko, is helping Kenyans access a lucrative international market. Read More
Ricoh SA begins rollout of new services-led strategy, Africa expansionJacques van Wyk has been appointed Ricoh SA’s new COO to drive the expanded strategy that will enable the business to become a services-led organisation and see its expansion into the rest of Africa. Read More
Stock Exchange launches news serviceA news service by the name of X-News has become the latest product coming from the local bourse, the Botswana Stock Exchange (BSE) recently. Read More
FEATURED STORYSafaricom-Equity battle for mobile banking hots up
Equity bank's entry to the mobile banking and telephony industry is still hanging in the balance with London-based global association of mobile operators (GSMA) calling for independent audit.
BEST READ NEWS
IN DEPTHKenya rolls out e-extension to improve agriculture
In a bid to curb the overwhelmed number of agricultural extension officers in Kenya, the ministry of agriculture is embracing technology with their introduction of E-Extension services, which are aimed at reaching out to over 7 million farmers annually.