Non-terrestrial networks (NTN) have the potential to be a game-changer for connectivity in South Africa. For example, satellite and high-altitude platform systems can provide reliable coverage beyond traditional infrastructure and common methods, especially in remote areas.
So, can MVNOs leverage partnerships with NTN providers to extend their footprint without heavy network investments?
Moderator Andrew McHenry, Co-Chair of Mobile Monday South Africa, discussed this interesting topic with Bradley Shaw, Vice President MEA, Lynk Global, and Akim Benamara, Chief Editor and Founder, TechAfrica News.
The connectivity gap in Africa
At the time of the event last year, there were some staggering statistics shared about the connectivity gap in Africa.
- 870 million in sub-Saharan Africa either are not online at all or have very limited Internet.
- 710 million people in areas with coverage, but they’re not actually using mobile Internet
- 160 million people who simply have zero coverage.
- More than half of the people in most African countries live in rural areas.
- 25% of all rural Africans have no possibility of connecting to broadband
- The biggest urban to rural Internet gap in the world is in Africa.
- Only 30% of the population live within a 10km distance.
Additionally, mobile data and mobile device affordability is a huge challenge in Africa, in the context of national average incomes.
Of course, these figures will have improved somewhat over the past few months, but the message is still clear and specific:
There is an enormous connectivity gap to fill in Africa.
And, as one of the speakers pointed out, if we’re talking about connecting people, we have to focus on rural communities. The panelists suggested that NTN, specifically end-to-end satellite services, could close this gap.
Businesses have been rolling out satellite coverage to as many countries as possible for the past couple of years now, with investment coming in, so MVNOs could begin partnering with these providers.
How does the satellite service work with MVNOs and MNOs?
Satellite providers working with operators to deliver connectivity to end-customers will often begin with messaging, SMS to instant messaging on third party platforms like WhatsApp, then we move to emergency alerts, then voice calls, then data.
To start with, it will usually be narrow-band data. It’s unlikely to be broadband data. But, in time, with additional satellites on the network, capacity will of course increase and this can improve.
This allows MVNOs to provide customers with connectivity where none would traditionally be available.
Another benefit to MNOs and MVNOs is that when the 2G networks start to be retired, satellite providers’ 2G networks will still be able to operate from space. Given a very thin sliver of spectrum on the terrestrial network, you could still run your old 2G IoT applications, 2G voice, and 2G messaging directly from the satellites, potentially with zero ground infrastructure.
Regulation must evolve alongside technology to make this happen
While this is a very intelligent concept, there’s still plenty of uncertainty around it.
Perhaps one of the biggest obstacles is that technology is always evolving faster than policies and regulations. A key struggle in Africa is that better regulations are needed, as are faster policy changes.
One speaker said, “We need to find the right model with this. We have 160 million people who have no coverage, so this solution is valuable. The challenges are big, the technology is here, but we just need a bit more political will. Innovation is often slowed down by the regulatory landscape.”
What’s required of MVNOs and MNOs to make this work?
Most satellite providers have to partner with an MNO that owns spectrum. Spectrum is the access technology from the device on the ground to the satellites in orbit. So, unless you own spectrum, this won’t work.
As an MVNO, that means you’d need to approach your MNO partner and work together to be able to offer this service. Of course, this may change in future.
What does the commercial model look like for MNOs?
An example of common commercial models was outlined during the panel discussion. There could be two commercial models for MNO partners to choose from:
- Revenue share
- Usage based
With the revenue share, the satellite provider keeps the bulk of the revenue, and the MNOgets a small portion, to cover the costs of launching the satellites.
On the usage-based model, it’s a simple cost per message, with the MNOs choosing which they want to use, megabytes or minutes.
MNOs should ideally be in charge of the commercial retail pricing to the market, as they know what they’re going to be able to charge and make money.
One speaker said, “This needs to be a collaborative approach so that everybody benefits from being able to use the service, but also being able to afford to afford to pay for it.”
What kind of use cases could this support?
In addition to bringing more available, affordable general connectivity to rural areas, there are some other use cases that could have a significant impact on Africa, such as digital healthcare, telemedicine, and so on.
As one speaker pointed out, “We have a lot of rural areas where people probably need to drive three four hours to see a doctor and to get the right diagnosis. This could solve that.”
Of course, there are many applications in various different sectors across Africa using IoT devices as well, from oil and gas, to marine companies, to farmers.
Serving rural communities
To help bring the under-served areas of Africa online, this is a great solution for someone who can’t afford a smartphone.
It’s great for enabling SMS and USSD communication. It’s also backwards-compatible with old devices such as the Nokia 3210 for example, vastly increasing the number of people in Africa who could use this solution to get connected.
One speaker said, “Is there really opportunity for MVNOs in the rural areas? Five years ago, I would have said no, but things have changed recently. There’s been a shift where MNOs now understand MVNOs in a better way, so it’s not more like cannibalising the business because they have declining subscribers, and you bring someone in who probably can increase subscribers going into niche markets. This makes it way easier for the MNO to finance the digital infrastructure as well.”
Key take-aways and guidance for MVNOs
For MVNOs and MNOs looking to expand their reach into rural, remote areas of Africa, partnering with these new satellite providers may be an innovative approach to help under-served communities and support people with new connectivity.
