There are many instances of capacity on satellites being already fully sold before the satellites are even launched. It is however time for participants in the African transponder market to look at the considerable opportunities that await beyond 2010.
New analysis from Frost & Sullivan (space.frost.com), African Transponder Market, finds that the market earned revenues of $1,080 million in 2008 and estimates this to reach $1,459 million in 2015.
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"The demand for reliable connectivity has acted as a major market driver for the African transponder market," notes Frost & Sullivan Research Analyst Lindsey McDonald. "Although this is true of all vertical sectors, it is interesting to note that the requirement for corporate networks continues to increase."
Multinational companies have identified Africa as an important area for growth and this is reflected in the flow of Foreign Direct Investment (FDI) into the continent. These companies list a reliable Internet connection as an absolute necessity and given that there is a lack of terrestrial infrastructure, satellite capacity is critical.
One of the greatest challenges facing the African transponder market is the lack of regulatory harmonisation. There are about four regional bodies that continue to work to improve this situation. However, the associated red tape does hamper further development and operators are challenged to work with regulators in this regard.
"Regulatory uncertainty and a lack of space in the C-band spectrum makes it a challenging environment for operators," explains McDonald. "Although the C-band is recognised as the most reliable satellite spectrum, it is also the most congested and as a result there is a growing tendency for operators to offer their clients services in the Ku-band, which comes with its own challenges."
For instance, the characteristic inclement weather of equatorial Africa threatens the quality of the services in the Ku-band. Therefore, further innovation and development of Ku-band technology is required to maximise the opportunity present in this spectrum.
New operators have brought with them localised expertise at more favourable pricing levels and have, for the most part, been able to offer a very good quality of service. As a result, more established operators are challenged to differentiate through their high-quality offerings and their ability to lead industry innovation.
"Price is the key competitive differentiator for satellite operators in Africa, as the market is price sensitive," concludes McDonald. "Pricing is likely to remain a key area of concern and opportunity for differentiation over the long term."
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African Transponder Market / M499