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Summary:

O3b Networks has raised $60 million in funding for a $650-million project to send 16-birds and build a satellite broadband network that is focused on emerging markets and remote areas with little or no connectivity. Continue Reading

Google is one of the many investors who together have put $60 million into O3b Networks, a St. John, Jersey, Channel Islands-based startup that is looking to offer Internet services in the emerging world, especially areas that are far away from the sub-sea networks and major backbones. Apart from Google, other investors include HSBC Holdings, Allen & Co. and Liberty Global, according to the Wall Street Journal. It is not clear how much money Google invested in the company. The company lays out its reasons in a press release, but that I am skipping because it doesn’t really say anything.

One thing is clear: O3b Networks will need a lot more than $60 million. The project, the brainchild of Greg Wyler, is going to cost $650 million and will require 16 satellites; the service is due to start by the second half of 2010. Wyler apparently has a lot of telecom experience in Africa. Liberty Global, a company owned, in part, by legendary media mogul John Malone is going to help develop the project.

Given how many of the previous attempts have been non-starters — whether for economic reasons or simple technology constraints — the claims by this company are quite audacious. Here are some facts about their service:

* The service is strictly wholesale and will sell bandwidth to local ISPs, fixed-line and mobile providers for, say, cellular and WiMAX backhaul.
* The company is also going to offer Google Apps to its potential customers.
* They claim speeds of up to 10 Gbps and low latency. They can do that for three reasons:
* They have a dedicated Ka-band satellite and as a result, the large available Ka-band spectrum can help deliver bandwidth at speeds of Gigabit/second and higher.
* O3b Networks uses parabolic antennas, which reduce latency.
* Their birds — 16 of them — are going to be positioned at 8,063 kms from the Earth, which allows them to add new satellites.
* The coverage zone is between +/- 40 degrees of latitude.

I’m intrigued by this startup because it does make sense to offer connectivity in remote areas. It also makes sense because Africa is one of the booming cellular markets and one where there is a need for cellular backhaul infrastructure. In remote areas, voice is going to be the killer app for a long, long time. The problem is that this company will always compete with fiber networks in terms of pricing, and that might put them on the back foot.

  1. [...] Om Malik on O3b [...]

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  2. [...] back to basics: Das dürfte sehr interessant sein, denn Google investiert in eine Zugangsinfrastruktur via Satelliten, um unerschlossene Gebiete, die über keinen Zugang verfügen, ins Netz zu hieven. [...]

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  3. There are a number of “content distribution to the edge” scenarios where multicast satellite downlinks are more efficient than fibre (assuming that fibre is where it needs to be, without additional last-mile connectivity to fibre PoPs).

    If Android phones are going to dual-mode (GPRS/3G and WiFi), a much more viable content distribution strategy to mobile handsets would be via SMS together with WiFi hotspots/hotzones (with mesh WiFi to satellite backhaul), with some kind of local content servers/caches at the satellite points. SMS could be used to alert users (via cell-ID tracking or even GPS) as to the content available at the hotspots/hotzones.

    Remember that the vast majority of mobiles in Africa are on pre-paid usage, and pre-paid GPRS/3G data-usage is still a very new thing. WiFi backhauled by satellite solves a lot of problems for Google, especially having to deal with the local mobile operators. A lot of these mobile users in Africa are already big on Opera Mini.

    Since the longer-term potential for Android is for (lots of) low-cost handsets from China (which will find their way to Africa), I can only see good from this Google investment. Google might also do well to sponsor development of Android applications in Africa.

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  4. I don’t see how they would run into competition with fiber in “areas that are far away from the sub-sea networks and major backbones”. If the areas have fiber, wouldn’t it mean that they are close to a major backbone (or that a major backbone could be built using cable)?

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  5. This is very interesting news for african people but i am afraid that project would failed just like 100 dollar laptop project…

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  6. I am more hopeful about the venture as a whole.

    There is considerable evidence, at least in India, that the areas seen as remote by urban people are doing much more than ‘voice’ over the web. Mobility will enhance that experience.

    Operators not being keen to lay fibre is one of the reasons why these areas are still seen as ‘remote’. The African experience is that the absence of such fixed infrastructure catalysed the wide adoption of mobile. A mobile web offering therefore makes sense for Africa too.

    I do however think that Google’s strategic interests in this project need closer scrutiny, on which I wrote a post. I linked yours to provide a good perspective too.

    Thanks.

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  7. [...] hot new is that Google has invested about $10M in O3B Networks that has plans to provide internet services to Africa and third world [...]

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  8. Google became self-aware at 2:14am EDT August 29, 2009.

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  9. How soon we forgot Iridium . Eienstien was right there is no match to human stupidity

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  10. Interesting..we just saw another report about Google sending a satellite into space to collect user’s data as opposed to helping “emerging worlds” get their service. Funny at the crazy conflicting reports I read on a daily basis!

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