The lower cost and faster speeds of satellite have increased the attractiveness of the technology for MTN, which is pushing up its investment as part of a plan to grow its network coverage in its operating countries.
Despite notable improvements this past decade, internet connectivity in rural areas and outside big centres remains limited, and building networking infrastructure in underserved areas is costly.
Global telecom body, the GSMA, says the coverage gap in Sub-Saharan Africa has narrowed from 50% in 2014 to 17% in 2022.
For Africa’s largest mobile company, covering gaps in its own network is the biggest strategic value.
“We look at satellite technology as an opportunity. We don’t really look at it as a competing technology, we don’t look at as a threat,” Mazen Mroue, group chief technology and information officer at MTN, told Business Day.
“There are a lot of areas where we can leverage from it, specifically in the areas where we can really expand our connectivity business and our solutions to the rural areas.”
These are parts of the country where the cost of building traditional mobile networks is seen as uneconomical by operators.
“So we can utilise the satellite technology to expand our footprints to the rural areas, using it as a solution to back up our backhauling capacity. That’s one example of where we are heading to and we believe we can make some bold steps in that direction,” Mroue said.
In recent years, low Earth orbiting (LEO) satellites have grown in favour as a way to plug these gaps, with Elon Musk’s Starlink being the best-known such service in the world.
Mroue, who has been with MTN since 1998, explains that one big reason for the growth in LEO satellite use is the cost. The cost of transporting equipment into space is now much cheaper than it was decades ago, in part because space rockets are now more reusable as shown by SpaceX.
In terms of connectivity, the two disadvantages with traditional satellite technology have to do with latency (the time it takes for signals to reach their destination) and limited bandwidth (the amount of data that can travel through a signal). Fibre and mobile are therefore seen as superior forms of access.
Low-altitude satellites improve on this, offering faster speeds, mainly because satellites are closer to the ground. By sending a large number of these into the sky, creating a constellation, operators have been able to cover the main challenges associated with satellite technology. Because of these advancements, operators predict that some functions of ground base stations and cellphone towers will be taken into the sky.
“There have been a lot of attempts to take the base station that usually host on a mast or a tower to put it in the air. We call it ‘base station in the air’. That’s the concept. Probably, 40 or 50 years from now we're going to see that more and more equipment will be in the air,” Mroue said.
To make this happen, MTN was in talks with a number of satellite providers.
“We are collaborating with different players”, he said, highlighting that the group was in talks or working with AST SpaceMobile, Lynk Global, Starlink and Eutelsat OneWeb.
“We are exploring opportunities for collaborations and the aim at the end is to make sure that the identified use cases, including expanding our coverage ... is a priority.”
Second, “is to see how we can use the satellite technology to improve our portfolio in terms of reducing the risk and deal with emergencies”.
“There is also another question on the table — whether MTN can go and invest in this kind of technology as well,” he said.
While the individual satellite costs have come down, creating a network in the sky still comes at a heavy cost. Launching a traditional high-altitude satellite is estimated to cost about $500m (about R9bn). To launch a network of low-altitude satellites, such as Starlink or OneWeb, costs about $5bn.
“Those are question marks that are being already tabled in front of our stakeholders and our board, and I hope we can really take both decisions in the future,” Mroue said.
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