Two of Asia's largest telecommunications companies have joined forces to engineer new technology that should ease mobile access to some of Africa's most hard-to-reach markets. India's Bharti Airtel Ltd (BOM: 532454) said in a statement Thursday that the company, with help from Japan's Softbank Corp (TYO: 9984), has completed a successful field trial for 3G phone services using satellite transmission lines. The technology could bring data services to many rural areas of Africa, which have been largely out of telecom firms' reach due to infrastructural barriers.
The trial, which took place in Kenya, successfully tested a new way to make satellite 3G transmission more viable. Once the technology is commercialized, it could have huge implications for far-flung communities across the continent. "This technology is critically important to the development of mobile phone networks in rural areas in Africa and other areas where commercialization of such operations is challenging," said Bharti Airtel Africa Chief Technical Officer Bayan Monadjem in the statement.
African mobile phone use is already booming. The continent now has at least 650 million subscribers -- more than the United States -- which represents a 40-fold increase since 2000, according to the World Bank. These phones have become lifelines for poor communities; innovators across the continent have found ways to employ cell phones -- even without the internet -- as mobile banks, business development tools and mapping devices. With more 3G access, users' capabilities would get a massive boost.
3G connections already use satellites, but they also rely heavily on phone towers. Some companies have tried to get around this problem by offering home-based "towers" -- like the MicroCell from AT&T (NYSE: T) or the Network Extender from Verizon (NYSE: VZ) -- which are similar in form and function to WiFi internet routers. But even those depend on an existing broadband connection, making them impractical for people who were never connected to anything in the first place.
In order to bring 3G to Africa's most remote areas, phone towers' capabilities must be strengthened without relying on physical infrastructure. That's where the satellites come in; they enable wireless transmission, easing dependence on land-based transmission lines.
The technology already exists and has been utilized before. SoftBank used it in Japan after the 2011 earthquake, with hundreds of satellite bases providing connectivity despite damage on the ground. The problem: satellite cellular service transmission has always been prohibitively expensive, making it impractical for the poverty-stricken communities that need it most. Now, Bharti and SoftBank say they have found a way to make the technology far more cost-effective.
In terms of customer base, Airtel is the biggest mobile service provider in India and the fourth-largest on earth. The company has been digging into the African market for years; it operates there via its subsidiary Airtel Africa, boasting a presence in 17 African countries. Data services are not nearly as popular as basic phone usage, but Chief Marketing Officer Andre Beyers told Bloomberg this week that data usage in Africa had doubled in the past year through June, adding that he didn't see things slowing down anytime soon. “If anything, with the further increase in smartphone penetration, our continuous expanding coverage and some more exciting products, this growth rate might even further improve,” he said.
Airtel already offers 3G in several African countries, but costs and infrastructural concerns have limited its penetration there. Now that satellite transmission is becoming a reality with SoftBank's help, those obstacles might fall by the wayside.
"I hope this technology will make communication even more free and convenient for people around the world," said SoftBank Mobile Executive Vice President, Director and Chief Technology Officer Junichi Miyakawa.