O3B announced this week that it had secured more funding

Google-backed satellite operator O3b Networks, which stands for “the Other 3 billion”, is set to launch services in 2013 after this week securing its final round of funding. The company has raised a total of $1.2bn from a group of investors and banks, which will allow it to launch the first of its satellites dedicated to providing low-latency, fibre-quality internet connectivity between developing markets and the global internet infrastructure.

Counting Google as one of its leading backers, O3b has also attracted the interests of HSBC Principal Investments and Liberty Global, as well as Bridge Venture Partners, Allen & Company, and SES as leading investors. Funding has also come from ING, CA-CIB, Dexia, DBSA, AFDB, DEG, Proparco, FMO, IFC and EAIF, as well as the Development Bank of Southern Africa, Sofina and Satya Capital.

Thales Alenia Space is currently constructing O3b’s first eight satellites and is using a system design that will allow O3b to add many more satellites to the constellation in the future in order to increase capacity. O3b’s satellites will be placed in orbit 8,000 kilometers from the earth, four times closer to the planet than regular geostationary satellites, which should give customers extremely low latency.

O3b will begin commercial service during the first half of 2013 following the planned launch of the first eight satellites by Arianespace with a Soyuz launcher from French Guiana. ViaSat will provide the teleport and trunking product customer terminals.

The brainchild of American entrepreneur Greg Wyler, who has rolled out fibre networks in Rwanda with his company Terracom, O3b Networks proposes to wirelessly connect markets in Asia, Africa, Latin America and the Middle East, providing access to approximately 70 per cent of the world’s population with “fibre quality” internet connectivity.

While developed nations, particularly those in the northern hemisphere, are well served by an extensive submarine fibre network, the same is not true, in both a commercial and practical sense, of emerging markets. So O3b claims it can offer fibre performance over satellite links, at prices comparable to fibre in developed regions, as well as plugging directly into core networks and 3G cellular and WiMAX towers to change the economics of the telecommunications game in the world’s fastest growing markets. The company’s plan to have services available by 2013 means O3b’s offering could also play a significant role in harnessing technology and communications to help meet the UN Millennium Development Goals by the target date of 2015, according to supporters. The service could further bolster the strong growth of mobile data revenues in the Middle East.

Commenting on the launch date, Mark Rigolle, chief executive of O3b Networks said: “This news means that we are now truly on the map – our customers can be assured that O3b is a reality. Ever since Greg Wyler founded O3b in 2008, the company has enjoyed the support of a growing number of investors, customers and partners. This has allowed us to secure our funding and to achieve our goal of reaching the billions who have so far been poorly served or completely cut off from the internet – the greatest business and information resource of our time.”

Delivering data by air and sea

During the keynotes and panel sessions on the morning of the first day of the Africa Com event in Cape Town, it became clear that non voice services hold much potential not just as a revenue generator, but also as a customer retention tool in Africa.

Figures from Informa Telecoms & Media show that data revenues in Africa increased 13 per cent in the second quarter of 2009 to reach over $1bn. But we’re not talking about mobile broadband or YouTube here, it was also clear that data services have to provide timely and relevant content and information to the region’s subscribers.

A good example of this is Safaricom’s m-pesa initiative in Kenya, which analysts agree has shown the way in mobile banking, as a revenue generator as well as a customer retention tool.

And it is the dynamism of the market that will see more exciting and interesting data services rolled out as more bandwidth becomes available. Speaking at the opening keynote session of the event, Themba Khumalo, CEO of MTN Uganda, said that there is increased access to bandwidth in the country because of the landing of submarine cables such as EASSy on the continent. “Prices will come down so we will have to look at our own business model and price ourselves correctly. Data is a key area of concentration, we need to deliver value and great experience,” said Khumalo. “While we still need to maintain expensive connections from satellite for some time, customers will eventually see reduction in tariffs, as attractive pricing from other developed markets is coming in.”

But on the same panel Nagi Abboud, CEO of Atlantique Telecom, based in Cote d’Ivoire, said that most of his business is still based on voice. “The cost of data is still very high, and customers are not willing to pay,” he said. “But as more cables land prices will come down.”

This is a market being targeted by Google-backed satellite operator O3b Networks, which stands for “the Other 3 billion” and has attracted the interests of HSBC Principal Investments and Liberty Global as well.

Rash Jhanjee, VP MEA & Central Asia for O3b, said the firm offers fibre performance over satellite links, at prices comparable to fibre in developed regions, as well as plugging directly into core networks and 3G cellular and WiMAX towers to change the economics of the telecommunications game in the world’s fastest growing markets.

This week the monster vendor said it is seeking to reduce annualised operating expenses and production overheads by €500m by the end of 2011, which means between seven and nine per cent of its approximately 64,000 employees face redundancy. However, disruption to customer-facing sales positions is expected to be limited.

The shake up will also see a company wide overhaul of the firm, reducing business units from five to three. The new departments to come into effect from the start of 2010, are: Business Solutions, which will focus on end user services, billing and charging, convergence and subscriber data; Network Systems, which will focus on both fixed and mobile infrastructure, including optical transport systems and broadband access equipment; and Global Services, which will focus on outsourcing and network management.

Meanwhile, over in Sweden at rival infrastructure vendor Ericsson, heads were moving. Ericsson’s head of technology, Håkan Eriksson, has been appointed head of Ericsson in Silicon Valley, the centre of the company’s important IP business. Eriksson will lead Ericsson’s development of fixed, mobile and internet convergence technologies from January. He will succeed Bert Nordberg, newly appointed head of the manufacturer’s struggling handset joint venture Sony Ericsson.

Eriksson, who’s got a long history of heading up the Swedish firm’s tech division, serving as CTO since 2003, prior to which he led Ericsson Research for five years, will also keep his present position as CTO. The Informer hopes it doesn’t all go to his head.

Keeping with the head hunting theme, Google-backed satellite operator O3b Networks has hired a veteran to steer it on its course to bring internet connectivity to emerging markets. The brainchild of American entrepreneur Greg Wyler, who has rolled out fibre networks in Rwanda with his company Terracom, O3b Networks (which stands for “the Other 3 billion”) proposes to wirelessly connect markets in Asia, Africa, Latin America and the Middle East at prices comparable to fibre in developed regions. It’s an ambitious plan, but one that has attracted the interests of Google, HSBC Principal Investments and Liberty Global as backers.

So as it prepares to launch another round of fundraising, Wyler is set to step back to a board role, to be replaced by ex-Cable & Wireless emerging markets wireless head Greg Clarke, who currently heads up property developer Lend Lease.

The Informer is hoping to catch up with O3b at the Africa Com show in Cape Town next week, where he will be roaming the floors (bars) looking for the region’s juiciest titbits of news.

Sticking with the skies for a paragraph or two, Vint Cerf, the father of the internet, gave a presentation at the Open Mobile Summit in San Francisco this week about his work on an interplanetary internet (an outernet?) protocol known as Delay-Tolerant Networking (DTN). In space of course, you’d have a hard time running TCP/IP because of the mammoth distances between planets and the fact that they rotate. So DTN stores information until one node finds another to communicate with, rather than continually trying to send the information until it is successful.

The Informer really only included this because of a brilliant quote from Cerf presentation regarding DTN: “Engineers are really good at labelling and branding things. If we had named Kentucky Fried Chicken, it would have been Hot Dead Birds.”

Actually, DTN has already been implemented into the Android OS stack, which is rather fitting, given the marketing to come out of Motorola recently. The Motorola Droid, unveiled last week as the first Android-powered handset to use the version 2.0 firmware, is on its way to Europe under the guise of the Motorola Milestone. Italy and Germany will be the first markets in Europe to stock the Milestone, with further availability to be announced at a later date. It is believed T-Mobile, Vodafone and O2 will launch the device in Germany, while Italian carriers are not yet confirmed.

Android has been hogging the limelight of late, with Sony Ericsson on Tuesday showing off its first handset to be powered by the mobile operating system. The X10 is the latest addition to the handset vendor’s Xperia portfolio and will be the flagship model in a family of phones coming to market during the first half of 2010.

Like a number of other manufacturers experimenting with Android, the X10 will feature Sony Ericsson’s own user interface, known as UX, which shoves certain features to the forefront. In this case, it’s Timescape, which streams all communications with one contact together in one place regardless of the medium; and Mediascape, which streams music, photos and videos from contacts and artists via Sony Ericsson’s content shop/app store, PlayNow. However, the device will also offer a link to the generic Android Market as well as its own storefront.

T-Mobile, which is one of the biggest operator cheerleaders for Android, wants to give its customers the opportunity to go shopping with ease in the Android Market. During a presentation at the Open Mobile Summit, Cole Brodman, CTO of T-Mobile USA, said that from November 17, Android users would be able to pay for apps downloaded to their device on their monthly bill. The carrier is also deploying a T-Mobile channel in the Android Market to support this carrier billing functionality.

According to Brodman, around 50 per cent of users of the myTouch 3G, which is the US moniker for the HTC Magic, visit the Android Market at least once per day. Moreover, around 80 per cent of myTouch users also browse the web on their devices multiple times per day.

These sorts of figures are always a bit problematic, and some numbers from research house TNS ComTech have been causing confusion this week. According to the researcher, the new generation of non smartphone touchscreen mobile phones is causing a significant drop in the value generated from UK bills. While users of non-touchscreen handsets are spending 12 per cent less per month than they were last year, the comparable decrease amongst users of non-smart touchscreen handsets is almost double at 23 per cent.

Since the launch of the original iPhone in 2007, touchscreen technology has taken the mobile market by storm and today touchscreen phones account for almost half (43 per cent) of all UK sales. However, the technology has filtered down the value chain and non-smart cheaper touchscreen devices like the Samsung Tocco and the LG Viewty are accelerating the decline in contract average revenue per user (ARPU).

TNS’s study reveals that consumer misunderstanding is to blame, with consumers not aware of the difference between a phone with an advanced operating system and a touchscreen phone with a basic operating system. As long as a phone looks like a high end smartphone, the average Brit will think that it is one and go for the cheapest deal they can find.

Oh wait… Just as the Informer was penning this very paragraph TNS’s own Paul Moore wrote in to clarify that the data shows that the customers who are now acquiring non-smart touch handsets were previously higher value customers in terms of monthly bill spend. So, those users who switched from smart touchscreen to non-smart touchscreen handsets went from spending on average £38.11 per month to £32.14 per month. While those who transferred from non-touchscreen to non-smart touchscreens spent more than 12 per cent less per month after the transfer. “Whichever way we look at the data, the consumers that own non-smart touchscreen phones are spending less than other market segments, when they were previously higher value customers,” Moore says. So that clears that up.

The good news is ARPU among touchscreen phone users with advanced operating systems, such as Apple’s iPhone and BlackBerry’s Storm, is up by an average of £5 per month.

That may be so, but UK mobile operator Orange was attracting criticism this week as it prepares to go up against O2 with its own iPhone offer. The bulk of the criticism is directed at Orange’s terms & conditions, which have revealed a fair usage policy of just 750MB per month on each of wifi and 3G. This usage cap, which O2 does not have, raises the ugly prospect of network congestion, and has prompted some of our readers to comment on how well Orange’s 3G network stands up to the onslaught of data usage, when the iPhone launches November 10. Saying that, the carrier isn’t shying away from offering tethering options for the iPhone, so it is a least expecting some customers to use the handset as a modem.

With pricing pretty much identical and Vodafone set to launch the device too, it looks like the UK battle for iPhone customers will come down to the quality of service each network operator can offer. And that makes the proposed merger between Orange and T-Mobile of the utmost importance as it’s thought that the move would give the new entity a data optimised network to better handle all that extra iPhone traffic.

On Friday the parent companies Deutsche Telekom and France Telekom announced the signing of the final agreement to combine the two UK carriers. The deal is to be conducted as a merger of equals, with T-Mobile and Orange folded into a 50:50 joint venture. This move would create a new market leader, with over 33 million subscribers and a 43 per cent share of the UK market. This represents a 50 per cent leap from current leader O2’s 22.44 million strong user base and 29 per cent market share, according to the latest figures from Informa Telecoms & Media’s WCIS. The new player will also benefit from the inclusion of Orange’s fixed broadband subscriber base and the potential to deliver converged services.

This week Deutsche Telekom reported a 7.2 per cent rise in net profit for the third quarter, from €895m in 2008 to €959m in the third quarter of 2009. Revenues climbed 5.2 per cent year on year to €16.3bn. The US operation continued to be the driving force, with T-Mobile USA delivering a 4.4 per cent increase in profits to €595m. Europe didn’t fare so well due to the continued decline of fixed line revenues, particularly in Telekom’s domestic market, while revenues were down across the board with T-Mobile in Europe.

That’s all for this week folks, the Informer has a plane to catch,

The Informer

O3b is targeting "the other 3 billion"

Google-backed satellite operator O3b Networks has hired a telecoms veteran to steer it on its course to bring internet connectivity to emerging markets.

The brainchild of American entrepreneur Greg Wyler, who has rolled out fibre networks in Rwanda with his company Terracom, O3b Networks proposes to wirelessly connect markets in Asia, Africa, Latin America and the Middle East.And O3b, which stands for “the Other 3 billion” has attracted the interests of Google, HSBC Principal Investments and Liberty Global as backers.

Where developed nations, particularly those in the northern hemisphere, are well served by an extensive submarine fibre network, the same is not true, in both a commercial and practical sense, of emerging markets. So O3b claims it can offer fibre performance over satellite links, at prices comparable to fibre in developed regions, as well as plugging directly into core networks and 3G cellular and WiMAX towers to change the economics of the telecommunications game in the world’s fastest growing markets.

As it prepares to launch another round of fundraising, Wyler is set to step back to a board role, to be replaced by ex-Cable & Wireless emerging markets wireless executive Greg Clarke, who currently heads up property developer Lend Lease.

The company’s plan is to launch an initial constellation of 16 satellites supported by an infrastructure of 2,300 transponders, supplying internet backhaul and 3G cellular backhaul at speeds reaching 10Gbps. Production of the satellites has begun and service activation is scheduled for late 2010.

Last month O3b said it closed the third quarter of 2009 with approximately $600m in contracts for services and has struck a deal with Vizada Networks, a satellite service provider, which will resell O3b capacity to the entire African market.

“We are really excited about our progress this quarter and more importantly, the response of customers to our product portfolio. We are proud to report that we have presold every application we developed for the initial launch of our satellites,” said John Finney, executive vice president of sales and marketing at O3b. “We have listened carefully to our customers ensuring that our services are available to meet advanced network requirements in time for O3b Service activation. This has given customers the assurance that they have a solution that is right for the growth they are anticipating. Our attractive pricing and flexible terms has also made it easy for customers to make purchasing decisions to meet their long term bandwidth requirements.”

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It emerged this week that web giant Google is sinking cash into a satellite operator to bring high speed, low cost internet connectivity to emerging markets.

The brainchild of American entrepreneur Greg Wyler, who recently rolled out fibre networks in Rwanda with his company Terracom, O3b Networks proposes to wirelessly connect markets in Asia, Africa, Latin America and the Middle East.

And O3b, which is an acronym for “the Other 3 billion”, has not just attracted the interests of Google. HSBC Principal Investments and Liberty Global are also on board.

Where developed nations, particularly those in the northern hemisphere, are well served by an extensive submarine fibre network, the same is not true, in both a commercial and practical sense, of emerging markets. So O3b claims it can offer fibre performance over satellite links, at prices comparable to fibre in developed regions, as well as plugging directly into core networks and 3G cellular and WiMAX towers to change the economics of the telecommunications game in the world’s fastest growing markets.

“O3B’s model empowers local entrepreneurs and companies to deliver Internet and mobile services to those in currently under served or remote locations at speeds necessary to power rich web based applications,” said Larry Alder, Google’s Alternative Access team product manager.

The company’s plan is to launch an initial constellation of 16 satellites supported by an infrastructure of 2,300 transponders, supplying internet backhaul and 3G cellular backhaul at speeds reaching 10Gbps.

Production of the satellites has begun and service activation is scheduled for late 2010.

“Access to the internet backbone is still severely limited in emerging markets,” Wyler said. “Only when emerging markets achieve affordable and ubiquitous access to the rest of the world will we observe locally generated content, widespread e-learning, telemedicine and many more enablers to social and economic growth which reflect the true value of the internet. O3b Networks will bring multi-gigabit internet speeds directly to the emerging markets, whether landlocked in Africa or isolated by water in the Pacific Islands.”

Perhaps Google will also tap the resources it recently obtained through investment in high altitude networking specialist Space Data, which provides specialised communications services to the military and various industrial outfits. Space Data’s business model is to provide low cost platforms for rural and remote data and voice communication applications via its high altitude SkySite network, which basically consists of an array of balloons equipped with a box of transceivers and other gadgets, ideal for providing connectivity in otherwise adverse territories. ]]> http://www.telecoms.com/5506/google-sets-up-satellite-network-in-emerging-markets/feed/ 0