Future competition
The telecommunication space is developing at an exponential pace, and we are updated on the latest developments. New technologies are emerging, while 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: * 5G technology * StarLink
It is highly unlikely that traditional broadband infrastructure will be available in Africa within the next 10 years.
Even if construction were possible, the World Bank estimates it would require an investment of $100 billion to cover Africa by 2030, and “no single actor will be able to meet Africa’s 2030 target” (Senges, 2019). Such facts also offer perspective 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, the claims seem more like clever marketing plots, and the lack of motivation in this direction for many years supports this outlook.
5G mobile technology
5G remains a hot topic in the mobile world. There have been many controversies and much resistance to rolling out the new generation of mobile networks.
The main advantages of 5G are high bandwidth and reasonable deployment costs.
5G has the amazing theoretical potential of 20 Gbps downlink and 10 Gbps uplink (Bhardwaj, 2021). However, real-world tests show that current 5G download speeds reach between 160 and 350 Mbps and upload speeds of 20 to 30 Mbps (Fogg, 2021). Although this throughput might be considered high enough, the real issue is the high response time making 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 only reach up to a few hundred 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 lower. Also, 5G operational costs are up to 5 times higher than K3’s technology.
5G coverage in cities is growing and is at about 15%. Typically, penetration in Africa and other emerging economies is almost nonexistent and is not expected to play a major role in the next 5 years (it is estimated that only 3% of the mobile connections in Africa will be on 5G by 2025 (Kazeem, 2020)).
Figure 7 Global 5G coverage
StarLink
Starlink is a new technology aiming to provide 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. Starlink’s long-term goal is to reach the 1 Gbps download speed mark.
Although Starlink can potentially disrupt the broadband market in the future, it is still in its infancy. It is currently unreliable, inconsistent, foiled by nearby trees, and has limited availability. Real-world usage shows actual download speeds even below 25 Mbps. (Patel, 2021)
Starlink requires a near-perfect line of sight with its satellite. This becomes an issue in cities where high buildings obstruct clear views of the sky. 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). In the end, this leads to poor user experience as many report interruptions, inability to hold online meetings, and low-quality video streaming.
There is no doubt the user experience will improve in the future as more satellites go into orbit. However, Starlink aims to cover rural and remote areas without proper broadband infrastructure. Hence, it is not a direct contender with K3 and 3air, as we aim for densely populated urban areas. Also, Starlink is years from becoming fully functional, while K3 technology has matured over the last decade and already has verifiable real-world applications.
If you are interested in our RISK and PESTLE or ESG narrative.