Greg Wyler, the founder of O3b Networks, explains why he wants to bring the Internet to Africa with low-orbiting satellites.
How long were you in Rwanda, who were working with and what were you doing? What were you doing prior to that?
Prior to Rwanda I had built a semi-conductor cooling company called Silent Systems which provided cooling components to the major personal computer manufacturers such as Dell, Hewlett-Packard and IBM. After Silent Systems was sold in 1998, I became involved in several other high technology ventures. Eventually, I decided to devote my time to projects which would have a positive impact on the social and economic development of citizens in emerging markets. That is what brought me to Rwanda with John W. Dick in 2003.
Our original goal in Rwanda was to provide Internet connectivity to a small number of schools. With the help of several bright, enterprising university students, we achieved that goal. Building upon that success, Mr. Dick and I soon founded Terracom Communications, which built Africa's first fiber-to-the-home (FTTH), network deploying more than 450 km of fiber. Terracom also built Africa's first 3G cellular network.
What led you to start up O3b Networks and what kind of change do you think it can bring about in developing regions such as Africa? What might it mean for the average African in terms of connectivity and development?
As an ISP in Rwanda, and building world-class last mile infrastructure (gigabit Ethernet FTTH), we quickly found that there was still a huge bottleneck – global connectivity. No matter how much fiber, DSL, 3G or WiMAX was deployed locally, you still had the challenge of connecting to the global fiber infrastructure to ensure global connectivity.
Geosynchronous (GEO) satellites had too much latency to provide a quality Internet connection for web 2.0 and interactive applications, and also could not provide the hundreds of megabits per second of bandwidth necessary. Therefore, African ISPs – who really do a great job with what they have – needed lower-cost, low-latency, high-speed international access in order to meet the needs of their customers.
There was just no way to secure that access. After running a lot of fiber, we realized that fiber alone was not the answer. Africa is big, very big. It is as large as China, the U.S., the UK, Argentina, Western Europe and India combined. We realized that trenching hundreds of thousands of kilometers of fiber was not the answer.
In today's global economy, Internet access and communications are a fundamental requirement for economic growth. The importance of a communications infrastructure transcends the individual at the computer. It is really an infrastructure that impacts all aspects of economic growth, from health care to education.
Take health care, for example, if you want to treat malaria, then you need to supply malaria medicine to the thousands of health centers in any given country. You need to manage inventories, distribution, and know who is taking what medicine and what the reactions are. All of this is important, and can only be done efficiently with an efficient communications infrastructure.
Has the endeavor been affected by the global financial crisis?
O3b Networks serves emerging markets, which have fared well so far in the current financial crisis. Most of these markets operate very conservatively when it comes to debt structures. Therefore, they have not been affected by the credit issues of the developed world.
In general, our markets have GDP growth between two and 10 percent. O3b Networks has the ability to move its capacity to reach the fastest-growing markets with the most demand. Our markets also have the lowest Internet penetration and the fastest growth; therefore, O3b Networks is a strong global investment opportunity, which focuses precisely on the markets that are developing. Because of this, we have been insulated from the global credit system. Our markets, taken together, represent relative safety compared to the turbulence of the New York markets and the echo impacts worldwide.
How much cheaper will your venture make high-speed Internet for Africans? I have seen one figure saying it will be 95 percent cheaper. How does this figure?
While we can't speak to that figure, O3b Networks will have cost reductions for Internet service providers on the order of five to six times current high-quality satellites. This places the costs in line with fiber. But, because ours is a satellite-based solution, the bandwidth can be delivered anywhere in Africa (and most of the world). Two other items as important as cost are quality and availability. O3b Networks is designed to provide ultra-low-latency, high-speed links – multiple STM-1s, up to 10Gbps. These speeds are not available today in most of Africa.
Fundamentally, because the O3b Networks satellites are approximately five times closer to earth than GEO satellites, they offer a number of cost-saving advantages. For instance, they require less power on board, yet they have more power to the ground. They weigh less because they need fewer solar panels, fewer batteries and can generally be smaller and significantly less expensive than GEO satellites.
Will you be competing with cable companies Eassy, Teams and Seacom? How is what you offer different than what they offer and will the satellite links be equal in quality?
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In general we are complementary to the cables which are coming to the shorelines. WiMAX and 3G networks today need the bandwidth at the edge, at the cell tower, while fiber cables typically bring it only to the core of the network. O3b Networks is designed to bring high-speed bandwidth directly to the 3G/WiMAX tower. Running fiber directly to towers is impractical, yet bringing high capacity directly to these towers is something O3b Networks can do very well.
In terms of price and quality, O3b Networks will be very similar to the fiber cables, but will not require any significant capital expenditure on the part of the customer. The satellite system will deliver very low latency (approximately 61 milliseconds one way), high-speed Internet trunking and thus is ideally suited for web 2.0 interactive applications such as video conferencing and voice applications.
Where does O3b Networks stand in terms of signing up telephone and Internet companies in Africa? Who and where might you have signed up?
O3b Networks fundamentally changes cost structure of deploying 3G/WiMAX functionality, especially for regional, rural and remote locations. For new greenfield systems, it can have even more dramatic cost savings. We are currently working with a number of major multi-country telecom and satellite service providers in Africa. We can't disclose any of our customers at this time.
