Tuesday, 9 September 2008

O3b Networks -- coming to an African country near you

According to The Times this morning, Google has teamed up with cable company LibertyGlobal and the HSBC bank in a venture to offer internet access to three billion people in Africa and other emerging markets. This project, O3b Networks, is directed at people for whom broadband internet access is not currently a commercially viable option. Each party has initially invested US$20 million in the project, which is expected to go live by the end of 2010. The three lead backers are apparently reserving the right to contribute further to the estimated $150 to $180 million of equity financing needed for the project, any further financing being funded by debt. This venture could offer bandwidth to customers at just 5 per cent of the existing cost. More to the point, it could offer African internet users a far better way of trading within the continent, establishing local brands at continental level and facilitating the distribution of films and music.

1 comment:

Asiimwe Paul said...

This initiative by google is more than timely.

Telecommunication companies in many sub saharan african countries have been accused of selling broadband equipment without broadband! Apart from the measly speeds available, customer care and respect for universal service regulations are not complied with.

Overall, the timing of the google project will also enhance competition in the telecoms sector since most government and PPP submarine cable projects will be getting close to completion between 2010 and 2012.

Lastly, the benefits of high speed broadband to most of Africa cannot be over emphasized. Currently, a mobile broadband link costs about $130 in Uganda, giving a maximum speed of 80kbps. This, coupled with downtime of between 10-30% severely affects prospects of both small and large enterprises, as well as the lucrative business of call centers.

A warm welcome to google and partners!