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The Pacific Islands, remote parts of rural New Zealand and poor but populous parts of eastern Indonesia and Papua New Guinea are target markets for a new satellite-based project that its backers say will bring low-cost, ultra-fast broadband to areas that are too expensive to reach by cable.
The brainchild of Christian Patouraux, a Belgian-born, Sydney-based entrepreneur with a 22-year career in satellite projects, the Kacific Broadband Satellites initiative owes part of its success to the equity funding efforts of boutique Wellington investment and advisory firm, Caniwi Capital, which has helped raise more than US$20 million in equity for the US$147 million project.
Unusual in the satellite industry for being a start-up operation, Kacific is partnering with Asia's largest satellite player, Tokyo-based JSAT Corp. The pair have placed an order with Boeing Satellite Systems for shared use of a 'condominium' satellite using so-called high throughput technology, which delivers focused satellite beams to produce targeted, higher bandwidth broadband than older generations of satellite technology.
Kacific will offer services in the southern hemisphere, while JSAT will take northern hemisphere capacity.
“Kacific-1 is designed to deliver uncontended broadband throughput via 57 Ka-band narrow beams, each having a capacity up to 1.25Gbps, with the highest signal power ever achieved in the region," according to a statement from Caniwi. "The beams are selectively tailored to cover precise pockets of demand in a geographically dispersed footprint of 20 Pacific and South East Asian nations.”
As a result, Kacific says it has sold capacity in 51 out of 57 beams so far, through take-or-pay contracts, with most beams exceeding 70 percent firm capacity bookings and several being almost saturated, for total future committed revenues of more than US$430 million. The project is funded by a mix of debt, equity and pre-payments.
The Kacific service could also produce a competitively priced alternative to terrestrial infrastructure of the sort that Crown Fibre Holdings is seeking in the US$150 million second tranche of funding for the Rural Broadband Initiative, Caniwi believes.
While RBI2 bids are due within weeks, its specifications don't include satellite options and Kacific's forecasts include no RBI2 revenues, although Patouraux is confident there will be demand from New Zealand internet service providers seeking to feed high-speed broadband to the agricultural sector, where remote data collection and analysis is starting to revolutionise precision farming methods.
In an interview with BusinessDesk, Patouraux said he'd identified remote markets incapable of being efficiently served by terrestrial services as an untapped market and had identified the Pacific as ideal, being “extremely disparate, with difficult terrain, and lowly populated” but with good levels of education and literacy. Tourism operators were also seeking more cost-effective broadband for both their own operations and to offer guests less expensive wi-fi at resorts.
Further market research had identified large populations in parts of eastern Indonesia, particularly, where local entrepreneurs were likely to be able to establish local wireless-based ISPs if they had access to UFB via satellite. Service will also be offered to PNG, the Philippines, the Malaysian peninsula and parts of French Polynesia.
“The aim is to have power sufficient to deliver a high level of bandwidth with a very small terminal,” said Patouraux, who likens the satellite beams to the equivalent of a cellphone tower, creating relatively low capital costs for a local user.
While Kacific will target rural New Zealand, remote parts of Australia are off the agenda, with the National Broadband Network initiative having a “totally different focus”, Patouraux said. The few Pacific Island states where telephony is run by monopolies are also unattractive.
French INSEAD business school alumnus connections led him to Caniwi managing director James Gould, with the Wellington firm brokering a US$20 million contribution from a UK 'family office' specialising in infrastructure investments, along with equity contributions from Caniwi principals in their own right and high net worth investors in the UK, Canada and Australia.
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