Broadband in a post-Gaddafi world

by Staff Reporter | March 26th, 2013

Kamal Arjundas, Director, Wafa Technical Systems Services

Supplying broadband to Libya at prices as low as USD 20 has involved some hard-earned experience at managing bandwidth coupled with cultivating working relations with partners on the ground. SatellitePro ME speaks to the UK and Abu Dhabi-based service providers of FreedomSat on the Libyan initiative.

“What surprised us is not everyone is going for the USD 19 package. On an average, the spend in Libya is around USD 100” – Kamal Arjundas, Director, Wafa Technical Systems Services

In Kufra, the largest district in Libya, highly unreliable internet facilities provided by internet agents cost consumers LD 120 dinars a month – approx. USD 95. So when Walid Elhwari sells Ka-band-based satellite broadband connectivity at prices starting at USD 20, his customers find the offer compelling. “The main selling points are the price and service they get independent of any public infrastructure,” says Walid Elhwari in conversation with SatellitePro ME.

He is one of  the largest VOIP resellers in Libya and a reseller for FreedomSat’s Ka-band service from UK-based satellite internet provider, Bentley Walker Ltd. Considering that war-torn Syria is reported to have faster download speeds and better connectivity than Libya, Anthony Walker, CEO of Bentley Walker should not have been surprised at the levels of interest the company’s Ka-band offering received from Libyan delegates at GITEX 2012 held in Dubai.

Speaking to SatellitePro ME, he recalls: “We had an inkling of the demand in Libya when we started promoting Eutelsat’s Tooway that offered limited coverage over Tripoli. But it was a week before GITEX 2012 in October, when Avanti decided to move the steerable Ka-band beam on Hylas 2 towards Libya, that the possibility of covering nearly 80% of the 1.76 million-sq km North African country became a reality.” Buoyed by the interest during GITEX from Libyans wanting to be resellers for the service, Bentley Walker got the product up and running, complete with a web portal, at a breathtaking pace typical of a provider that has worked in challenging countries such as Afghanistan and Iraq.

“We are promoting three platforms – the Hughes HN router for consumers and the Hughes HX router and the iDirect platform for the corporate sector,“ explains Walker.

Ka-band: A game-changer

Bringing Elhwari and Bentley Walker together is the latter’s biggest partner in the region, Abu Dhabi-based satellite internet service provider, Wafa Technical Systems Services. We visited the company’s office and warehouse in the industrial suburb of Mussafah.

Commenting on the enthusiastic response from Libyans, Director Kamal Arjundas says, “We knew there was potential in Libya, but we did not anticipate that Libya is going to grow so fast. It was beyond our expectations. Our target was to sell around 1000 terminals a year. So far, since we launched in October 2012, we have already sold 1,600 terminals.

“We based our entire research on Ku-band and we did not expect the surge in demand given the lower price of entry for Ka-band. Moreover, what surprised us is not everyone is going for the USD 19 package. On an average, the spend in Libya is around USD 100.

“Similarly in South Sudan, where we shipped 40 systems – 20 each for C-and Ka-band, people are overwhelmed with Ka-band and the price difference, though our C-band terminals are also heavily subsidised. Also, logistics matters when you compare dish sizes of 1.8 metres for C-band as against 98 or 74 cms for Ka-band.”

A reported 80% of the terminals shipped by Wafa are 98 cms owing to its consistent performance throughout Libya as against the 74-cm terminal that performs optimally only in the coastal areas.

Ka-band has been a game-changer, says Walker.

“You have satellite broadband that actually competes with the cable service. It is not the last choice now, even where there is fibre it is a credible alternative because of the speeds, capacity and competitive cost of hardware” – Anthony Walker, CEO of Bentley Walker

“Where it is introduced, the demand starts to surge. Suddenly, you have satellite broadband that actually competes with the cable service. It is not the last choice now, and even where there is fibre, it is becoming a credible alternative because of the speeds, capacity and competitive cost of hardware.”

The hardware costs drop as the price of the package rises, clarifies Walker.

“We subsidise the hardware quite dramatically to get the service contracts. We take an entrepreneurial view and focus on the bandwidth contract charging the lowest possible price for hardware.”

The unprecedented demand for Ka-band in the vast North African country post the ousting of the Gaddafi regime has reportedly emerged from all quarters ranging from corporate entities to call shops and individual homes. Some of Libya’s largest banks are reportedly Elhwari’s clients.

Cost is apparently key when you consider that the entry price for a Ku-band terminal is around USD 130.

Logistics, then and now

Shipping and logistics is a far cry from the time during the bloody revolt, when Elhwari was installing VSATs for free on hospitals in dire need of medicine, or in hotels for journalists reporting from war-torn Benghazi. Owing to a no-fly zone situation over Libya at the time, containers shipped to Alexandria, Egypt, would then take the long, tortuous road route to Libya.

Considering the lack of fibre other than in the coastal areas and the presence of isolated communities across the country, I believe Libya will be a healthy market for satellite broadband over the next five to 10 years

Post the ouster of the old regime, Arjundas’ team has shipped six containers since October 2012 to the ports of  Benghazi, Misrata and Tripoli.

“This is unlike the situation we face in South Sudan which is also a very good market. The air freight goes to Kenya and then it travels to Juba in smaller lots. We cannot ship a container there because container costs are higher than air freight. We are told that the journey from Kenya to Juba can cost a whopping USD 10,000 per container,“ says Arjundas.

Partners and customer support

Walid Elhwari and his fellow-resellers are critical to any initiative on the ground say Walker and Arjundas given that the marketing for the Freedomsat services is driven entirely by rudimentary, but apparently effective word-of mouth across Libya.

While the entry price for the service has ensured a larger pool of consumers, distributors such as Arjundas of Wafa are under pressure to maintain volumes to retain revenues.

“Profitability has been impacted. Previously on Ku-band, we had to sell 100 units. Today to make the same profit on Ka-band, we have to sell 500 units.”

Profitability has been impacted. Previously on Ku-band, we had to sell 100 units. Today to make the same profit on Ka-band, we have to sell 500 units

To streamline operations, subscribers are given customised accounts on a web portal created for the FreedomSat service that allow subscribers access to their usage and billing details. Installation, one of the thorny issues with mass roll-out is apparently not a challenge, states Arjundas.

“With military personnel in certain countries, we would have to go through 30 emails on average for one single system. The reason we can pass on heavy discounts to our partners such as Elhwari in Libya is because they are sound at installation and pose few demands on our support system. Also with Ka-band, unlike Ku-band, we do not have interference issues and a receive signal of 90 or higher is easily achievable – some are getting 93.”

Elaborating on the Ka-band customers in Libya and other places, Arjundas states: “Ka-band operators work on the basis of commitments to volume of data. If the customers exceed their quotas, they can buy tokens from us. We do not encourage that.

“What we encourage is using the fap-free zone (fap-fair access policy) between 1am and 6am to schedule their data downloads, windows updates and the like. Data downloaded between these times is not included in their quotas. Over the past few months, we have seen subscribers getting smarter about bandwidth management and when 90% were buying tokens in the past, only 10% of them are currently opting for the extra bandwidth.”

Moreover the bandwidth usage typically prioritises emails, browsing and VOIP ahead of an end-user’s need to run programmes such as BitTorrent. “From latency issues on a typical satellite terminal to everyday bandwidth management challenges, it is about educating customers about the capabilities and limitations of their respective broadband packages,” states Arjundas.

On the future of satellite broadband in Libya

Going by current sales figures, Arjundas is optimistic.

“Ka-band was launched to compete with fibre. Initially, since WiMAX was already there, we believed sales of around 1,000 units would be a bonus. But the users found that Ka-band was offering more consistency and better throughput with services such as VOIP. We also offer dedicated bandwidth for corporate clients or telcos at prices as low as USD 1,300 – 1400 per megabit.

“The committed information rates that we support on our iDirect hub is a huge pull factor for corporate entities operating in the middle of nowhere.”

Walker believes it is very difficult to predict as to what extent satellite broadband will grow in Libya – but going by evidence on the ground, he is optimistic as well and thinking ahead, he believes the company will run out of capacity.

From latency issues on a typical satellite terminal to everyday bandwidth management challenges, it is about educating customers about the capabilities and limitations of their respective broadband packages

“Considering the lack of fibre other than in the coastal areas and the presence of isolated communities across the country, I believe Libya will be a healthy market for satellite broadband over the next five to 10 years. The long-term view is supported by the fact that Libya, unlike Afghanistan is not volatile.

“Even if we assume that a modest 2% of the population of the five million people in Libya were to use satellite broadband, it works out to be a quarter of a million systems. We would then have to buy capacity from other providers – an issue we are already looking into.”

A recent announcement on Libyan TV temporarily suspending the sale of WiMAX equipment gives Elhwari additional grounds for optimism. He says that his customers are happy with the internet speeds of 512Kbps x 128Kbps – the speeds for FreedomSat3 that is priced at USD 20. And they should be.

It is ironic that since the revolution, overall connectivity has worsened, with a 5.7% decrease in internet speed compared to the last quarter of 2011. Despite one of the two telephone network suppliers in Libya – Al Madar – having recently signed an agreement to provide 3G telecommunications systems in Libya, there is a long way to go.

Walid Elhwari believes that the market for satellite broadband in Libya will last a decade if not more. And to support his optimistic outlook is a report, by American web services provider Akamai, that revealed that 52% of the country has an internet speed of less than 256 kilobytes per second (kbps). What is more, only a reported 5.5% of the population in Libya have internet access, and this is one of the lowest rates in the Middle East and North Africa.

 

 

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