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Future competition

The telecommunication space is developing at an exponential pace. We are following the developments. There are some new technologies emerging and some have already failed (for instance Google’s Project Loon (Project Loon, 2021)).

There are still 2 key players that could potentially replace classical broadband and those are: * 5G technology * StarLink

It is highly unlikely traditional broadband infrastructure will be built in Africa within the next 10 years.

Even if constructions would be possible, The World Bank estimates that, to cover Africa by 2030, it would require and investment of $100 billion and “no single actor will be able to meet Africa’s 2030 target” (Senges, 2019). Such facts also shed some light on statements about providing free internet, mobile networks, and TV in Africa from the likes of Facebook’s Mark Zuckerberg or Virgin’s Richard Branson. Right now, they seem like impossible tasks and look more a clever marketing plot as true intentions. The fact that no steps have been taken in this direction for many years additionally supports this.

5G mobile technology

5G remains a hot topic in the mobile world. There have been many controversies and a lot of resistance in rolling out the new generation of mobile networks.

The main advantages of 5G are for sure high bandwidth and reasonable deployment costs.

5G has the amazing theoretical potential of 20 Gbps downlink and 10 Gbps uplink (Bhardwaj, 2021). Real world tests although show that current 5G download speeds reach between 160 and 350 Mbps and the upload speed is between 20 and 30 Mbps (Fogg, 2021). Although the throughput might be considered high enough, the real issue is the high response time that makes it almost unusable for certain businesses that rely more on low latency than throughput.

One major drawback of 5G is that each cell/station can have only a reach of up to a few 100 meters while K3 technology can provide stable links and full speed up to 50 km. With fewer K3 towers required, infrastructure installation costs are decisively smaller. Also, 5G operational costs are up to 5 times higher than on K3’s technology.

5G coverage in cities is growing and is at about 15%. Still, penetration in Africa and other third world countries is almost nonexistent and is not expected to play a major role in the next 5 years (it is estimated that by 2025 only 3% of the mobile connections in Africa will be on 5G (Kazeem, 2020)).

5G coverage map

Figure 7 Global 5G coverage

Starlink is a new technology aiming at providing global broadband internet coverage through a low orbit satellite mesh network. In its current beta stage, it promises up to 100 Mbps download and 20 Mbps upload speeds. Long term goal of Starlink is 1 Gbps download speed.

Although Starlink has the potential to disrupt the whole broadband market in the future, it is still in its infancies. As of now it is unreliable, inconsistent, and even foiled by nearby trees. Availability is very limited. Real world usage shows actual download speeds even below 25 Mbps. (Patel, 2021)

Starlink requires a near perfect line of sight with the satellite it communicates with. That becomes an issue within cities where clear view of the sky is obstructed by high buildings. Starlink’s website states: “If any object such as a tree, chimney, pole, etc. interrupts the path of the beam, even briefly, your internet service will be interrupted” (Starlink, 2021). This in the end leads to poor user experience as many report interruptions and low quality in streaming video and online meetings seem to be almost impossible.

There is no doubt that future user experience will improve with more satellites in orbit but either way Starlink’s aim is to cover rural and remote areas without proper broadband infrastructure. With this, Starlink is not a direct contender to K3 and 3air as we are aiming for densely populated urban areas. Also, Starlink is still years away from being fully functional and usable in contrast to K3 technology that has matured in the last decade and has been already filed proven.

For more in depth risk assessment please read our RISK and PESTLE analysis and ESG narrative.