changing the world by connecting the unconnected - … · this low entry-barrier business model,...

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CHANGING THE WORLD BY CONNECTING THE UNCONNECTED

Market Trend

Rev.3 06/2019

Wi-Fi HotspotsChanging the World

by Connecting the Unconnected

Introduction

In a world where Internet access is coming to be regarded as an essential utility,

not having access to broadband connectivity can severely affect quality of life.

Large parts of the globe, especially those in rural locations, can find themselves

cut off from the digital revolution that is happening all around us, harming their

potential for growth and development.

However, this is not solely a problem in rural or hard-to-reach areas. A recent

market study released by the Wireless Broadband Alliance showed that more

than half of the global urban population remains unconnected to broadband

Internet, with 37% living in some of the world’s wealthiest cities.

As the number of Internet-enabled devices globally continues to grow, the

demand for Internet connectivity is only going to increase – can satellite Wi-Fi

hotspots provide the answer?

By Richard Schaap, Market Director Broadband Access

at Newtec



Reaching the Masses

Finding a solution that can provide mass connectivity in areas

where terrestrial infrastructure is severely lacking is a major

concern for network operators, with the demand for Internet

access on a global scale reaching an unprecedented level.

In Africa, for example, more than half of the continent’s

1.2 billion population has little-to-no broadband Internet

access, with 400 million of those lacking even the most basic

levels of connectivity. These numbers illustrate a great potential

for growth and a great opportunity for access solutions that

can reach these difficult-to-reach areas, which are often vast

and without the infrastructure to connect by more traditional

means.

This lack of terrestrial infrastructure is one of the main reasons

for millions of people in rural areas remaining deprived from

Internet connectivity. In many regions of the world, it is likely that

this infrastructure challenge will continue for the foreseeable

future and this is traditionally when satellite becomes the

primary connectivity solution. However, the cost of satellite

equipment and capacity – not to mention the transport costs

and national duties and taxes – means that even a traditional

satellite VSAT solution remains out of reach for many.

Photo Courtesy of Liq

uid Telecom2



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A Growing DemandThe irony of this situation is that many of these traditionally under-served countries and

regions are seeing huge growth in the sales of smartphones and tablet PCs, bucking the

global trend which shows smartphone sales are decreasing. Since 2012, there has been a

significant market shift with consumers bypassing traditional personal computers in favor

of handheld devices, opening a significant market for connectivity. Returning to the African

example, the continent now has more than 200 million devices with the ability to connect to

the Internet through Wi-Fi. This figure is expected to grow to 500 million by 2020, despite the

fact that not all areas are covered by Internet connectivity.

These market conditions have created enormous pent-up demand and a great business

opportunity. Smartphone and tablet PC users are eager to be connected to the Internet to

browse websites, conduct business and get involved with social media – all at a price that is

affordable to the end-user.

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PD D

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Why Not DTH Or Mobile?

Finding the right type of connectivity to reach the masses

in such regions with an economical solution, is a difficult

task. While mobile networks are a viable solution in built-

up and semi-rural areas, the economies of scale that

operators work to often mean that they cannot justify the

required investments in even the most basic GSM mobile

connectivity for rural and hard-to-reach areas.

Similarly, while satellite provides an answer to the issues

of reach and accessibility posed by mobile, the traditional

solution – direct-to-home broadband through a VSAT

terminal – poses significant problems in terms of Total

Cost of Ownership for the end-user due to it being more

commonly deployed in a pre-paid scenario.

In this situation, what is required is a combination of the

overarching connectivity that satellite can provide with the

affordability, ease of installation and reliability that is craved

by operators, service providers and end-users alike.

THIS WAY!

NO, THIS WAY!

CONFLICTING ELEMENTS!Recurring questions of satellite broadband access

SATELLITE BROADBAND ACCESS

• Total rendered Equipment cost

>700USD

• Terminal

• Shipment

• Installation

• Customs

• Recurring monthly fee >50USD

INDIVIDUAL PEOPLE

• Low average monthly income

per capita: From 10’s to a few

100’s USD

• Very short or no commitment for

service

• Used to pre-paid services



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A Community Solution

A solution to this imbalance of supply and demand is to

create Wi-Fi hotspots that are reliable, easy to install and

– above all – affordable to the masses. Several business

models can emerge from this kind of deployment. One

example is to create a kind of micro business model for

Internet access provided on an access voucher basis. With

this low entry-barrier business model, hotspot owners such

as private shop owners invest in a satellite Wi-Fi hotspot

terminal and sell voucher-based access to consumers. After

the initial low investment, they do not have any recurring

costs, but receive commission from the network operator

on the revenues generated from access vouchers sold.

The main benefit of this model is that the end-user has

no investment and has no recurring service procurement

obligation, but will buy voucher based Internet access

based on their available finances.

Although the satellite Wi-Fi hotspot solution is slightly more

expensive from an initial investment perspective, the fact

that the investment is generating revenues from a large

number of end-users means the Total Cost of Ownership

per user represents just a fraction of the cost when

compared to a traditional-single user VSAT terminal.

Another model could see rural shops or service stations

provide Internet access as a service to their customers

within their normal local spending. This model is attracting

more business as there is an additional provided service

element.

As an example, there are currently shops in rural Africa that

provide electricity to their customers, who very often do

not have access to electricity in their homes to, for example,

charge their phones. Again, providing additional services

in the retail environment increases the economic activity at

the point of sale.

Community Wi-Fi will likely be an important delivery mechanism, not just for

initiatives like internet.org, but also for the LEO constellations

that are expected to deploy in the 2019-2020 timeframe and for

whom Middle East & Africa will be importants markets.



5

Wi-Fi Hotspots on Newtec Dialog®

Adding a Wi-Fi service element to the Newtec Dialog®

platform extends its service range, enlarging market reach

and increasing service revenues for operators. The flexibility

of Newtec Dialog means that consumer Wi-Fi can be added

simply and cost-effectively by adding a Newtec Wi-Fi hotspot,

including the required OSS/BSS solution for end-customer

management.

Newtec has already delivered a significant number of its

Newtec Dialog platforms worldwide, with many opting for

the community Wi-Fi hotspot solution as part of the service

delivery.

WI-FI SOLUTION

NewtecWiFi Hotspot

Terminal

OSS/BSS



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ConclusionThe number of end-user devices requiring Internet connectivity is increasing,

requiring a suitable and economical technology solution.

Creating community solutions that are reliable, easy to install and affordable is an

essential element for operators that are unable to justify investments in mobile

infrastructure, and also for those end-customers for whom individual VSAT

terminals and the associated recurring service procurements remain out of reach.

Community Wi-Fi hotspots such as those created on the Newtec Dialog platform

provide a central technological hub that can deliver a larger variety of services for

both business and residential users, while providing operators with a platform that

is flexible, scalable and efficient.



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SHAPING THE FUTURE OF SATELLITE COMMUNICATIONS

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changing the world by connecting the unconnected - … · this low entry-barrier business model,...

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