Ben Uzor Jr
Satellite operators and resellers in Nigeria have declared that the new fibre initiatives (Main One and Glo-1) pose no threat to their existence due to the variation of services both technologies offer. This comes on the heels of heated debates amongst industry analysts that the revenue of satellite operators will dip following the growing number of submarine cable systems on the country’s shores. Fibre optics is quicker and has higher bandwidth but for long distances requires more infrastructures.
On the other hand, satellite is slower with lower bandwidth and noticeable delays. The long range capability is greater but parts of the infrastructure are expensive to replace and repair. Satellite operators told Business Day yesterday that because most of the national fibre backbones and fibre rings only run through large cities and towns, majority of Nigeria’s unserved and underserved population will get internet access through satellite communications and other wireless technologies.
Analysts who are familiar with the evolution of internet in Nigeria say that that the internet connectivity business has been dominated by satellite. This, the analysts maintained was because satellite and subsequently other wireless technologies for a long time were the only viable option in the past owing to non-availability of fibre across the country. With the boom in the telecoms industry, they noted, it became essential for operators to lay fibre to attain the high capacity required for a good voice network.
A senior executive in one of the new cable firms’ who pleaded anonymity told Business Day that satellite business will experience a severe downturn on the African continent owing to the proliferation of submarine cables initiatives. He further revealed that satellite operators in Africa have already invested huge amounts in new and replacement satellites at a time when there was already growing apathy to satellite/VSAT use. In his estimation, $4.395 billion will be invested in new and replacement satellites against $2.15 billion in seven international submarine cable systems.
“By the end of 2010, the internet submarine fibre capacity had increased by 1, 683 percent by the end of 2010. It is expected that by the end of 2011, the capacity would have increased by a whooping 3, 967 percent, which is a clear indication of the growth of fibre deployment”, he stated. For Johnson Obioma, a telecom analyst, the big transition from satellite to fibre would force satellite operators to dig deep and come up with new strategies to enable them retain market share.
More importantly, he noted that, if they are to survive, they would need to find new ways to reduce cost of access. As at today, MainOne, Glo-1 and SAT-3 sell bandwidth capacity to their customers within the range of $300 - $400 per megabyte. Lanre Ajayi, past president, Nigerian Internet Group (NIG) who spoke with BusinessDay in a telephone interview, pointed out that the emergence of these new fibre initiatives would only mean expanded business for satellite operators. According to him, satellite was extremely effective in reaching places where the volume of traffic would not justify a fibre connection.
“The tendency is to think that the submarine cables will eliminate satellite communication but it might actually expand the business of satellite in Nigeria. The truth is that fibre cannot get to everywhere. “Most of the national fibre backbones and fibre rings would run through large cities and towns. But for the rural populace, the way for them to get internet connectivity would be through satellite technology.
“This means that the emergence of these cables would only mean expanded business for satellite operators”, Ajayi posited. In the same vein, Oladapo Raji, general manager, DCC Networks, a subsidiary of Computer Warehouse Group (CWG), observed that Nigeria cannot boast of as much fibre as any of the countries in Europe and America, adding that despite the extensive use of fibre in these countries, they have very large installations on satellite and it’s growing quickly.
“If in these economies fibre does not compete with VSAT but both co-exist as compliments why should we expect the contrary in Nigeria? “Even though fibre is faster and has high capacity, its availability is very low especially in our environment where there are no proper cable ducts and infrastructure development is still massively ongoing. So in this light, the VSAT comes in as a compliment to the fibre.”
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