A business with roughly 1.2 billion potential customers is bound to be a lucrative market. And that’s precisely what many satellite markets are seeing in the continent of Africa.
Where technology and innovation are concerned, the African population largely gets left behind. From smartphones to mobile internet access, even to basic access to the grid and utilities, Africa has lagged behind nearly every other continent. Most still don’t have many of the modern amenities modern societies take for granted. With all this in mind, demand for satellite service is expected to be very high, because so few are currently served and so many could see dramatic positive impact related to gaining connectivity.
Remember that 1.2 billion potential customers? Approximately half of those are young people all in their early 20s or younger who are not only tech-forward, but likely to be early adopters of new technologies. And already, start-ups and technology leapfrogging are in obvious evidence, especially in stable, relatively wealthy nations like Morocco and Kenya. Part of the hope for these nations is the understanding that increased internet connectivity is connected to a not-insignificant increase in GDP.
It’s Africa’s lack of reliable infrastructure which often lets it down, despite recent advancements. Though undersea fiberoptics connect many areas of Africa to the rest of the world digitally, only approximately 176 million individuals now can use those resources. Though worldwide adoption of high-speed internet has slowed dramatically, in Africa it represents a massive and growing market: one of the few left in the world. The same can be said of mobile subscribers, which are expected to balloon to over 725 million within another three years.
But the growth in physical telecoms capability doesn’t preclude the fact that the area is a ripe satellite market. In fact, given that only large coastal areas have good access to fibreoptics, and that usually in major cities, it is expected that satellites are going to be the primary driver of internet connectivity for nearly all other areas: the majority of that 1.2 billion-strong population. And especially for nations eager to jumpstart internet connectivity, satellite-based options are far faster than wired telecommunications, and typically require less investment end-to-end.
For example, terrestrial telecomms options are so prohibitively expensive that it’s expected total number of global satellites offering 3G and 4G capabilities are going to break five digits by 2020 to keep up with rising demand not just in Africa. We live in an age where it’s getting exponentially cheaper to manufacture satellites from end to end and to get them launched… usually as peripheral objectives to larger space-related flights and missions. And as satellites get cheaper, they come into reach for more and more African nations in need of this critical technology.
And it’s not just satellites that are getting cheaper. Peripheral technology is getting cheaper as well, from VSAT platforms to phones to other crucial connectivity components. This is great news, especially for underserved but generally impoverished rural areas, and means that hot markets like South Africa, Kenya, Morocco, Angola, and Tanzania can help in reducing costs for nearby neighbors, helping to increase the African satellite market accessibility.
Investors and major corporations have all connected the dots, and 2016 was a banner year for African satellite launches and digital transition. Roughly 11 nations transitioned to digital broadcasting over the course of 2016 alone, and the penetration of digital television access is expected to reach over 95% of the population of over 30 nations within the next four years. That’s a whirlwind turnaround within an exceedingly short time.
Despite significant problems, including disparate markets, hard competition between different satellite and telecomms groups and pervasively poor infrastructure, Africa’s growing satellite market has attracted interest from investors and providers. With dramatic projected growth within the next four years, Africa is one of the few frontiers of adoption for even basic telecomms service, with over a billion potential new clients scattered across the continent.