Kacific, the start-up seeking to offer satellite broadband services to Pacific nations, is looking to order two or three Ka-band hosted payloads in the next couple of months rather than the single payload it had originally envisioned.
Speaking to…
Kacific, the start-up seeking to offer satellite broadband services to Pacific nations, is looking to order two or three Ka-band hosted payloads in the next couple of months rather than the single payload it had originally envisioned.
Speaking to SatelliteFinance, Kacific co-founder and CEO Christian Patouraux said the start-up was looking at multiple payloads with different satellite operators and that an agreement was close.
“We are getting closer to a deal with two potential hosts. We have been discussing it with them for quite some time. We’ve also been asking satellite manufacturers about potential proposals on technical arrangements and it seems that there is a good fit.
“We have come a long way with these potential partners and hope to make an announcement in the next couple of months.”
The company originally planned to order a single Ka-band hosted payload but is now looking at spreading the transponders over multiple satellites.
“We may split our payload between two or even three satellites. There are pros and cons of that, it makes things a bit more complicated but on the other hand it may de-risk our project. For our potential partners, they have some space on their upcoming programmes and they are happy to come on board without us taking up too much space on their spacecraft.”
Despite the shift to multiple payloads, Patouraux remained confident that the company would begin offering services from the start of 2017. He added that the predominantly regional satellite operators that the company has been talking to are all looking to order their satellites in Q2/Q3 2014.
Even with the new multiple payload plan, the overall cost of the project is expected remain in the region of US$200m.
Having started the project with an initial round of angel funding from family, friends and members of the satellite community, Kacific subsequently completed a round of seed funding in early April.
Patouraux said the company has now started working towards its round A of funding. Kacific is currently preparing all the necessary documentation and has already begun contacting funds, strategic investors and high net worth individuals.
Unlike O3b Networks, which both Patouraux and Kacific co-founder Mark Rigolle worked for, Kacific does not plan to bring in a strategic investor at this point.
“Maybe later but not at this stage. The partners that we have approached, they want us as a real partner. They don’t want to own part of us at this stage. We definitely want to raise our own financing,” Patouraux explained.
Rigolle added: “There is no need to have a strategic FSS operator because unlike O3b there is nothing experimental or new on these satellites. It is all tried and tested, the payload has been flown for years, so there is nothing that needs development.
“With O3b, the system as such had never been flown and that raises investment concerns. I don’t think the investment would ever have been done with O3b without having someone like SES validating the plan.”
Kacific, though, is following the O3b model in terms of speaking to export credit agencies, development banks and social funds about financing the project. Patouraux said that there was definitely an appetite from these institutions to come on board.
Business begins to take shape
Meanwhile, Kacific is moving forward with the operational side of the business. Patouraux said it has now hired a full executive team, with eight employees in total, and the company is moving ahead with pre-sales. “That is an angle that we really want to focus on because it is the key to financing,” he said.
And Kacific is confident of securing its pre-sales targets. Patouraux said: “There is a fear from our potential customers that the bandwidth may go so fast that they will not get it. So some are in quite a hurry to secure their bit of the bandwidth.
“We will have a total of 7GHz of bandwidth over the region. But it is a very wide region with a limited number of spot beams and we will put those spot beams where we think there is a market. So we are very much coming from a market perspective.
“Everything flows down from our market analysis. We will really drive our beam placement based on what our market model (population density, willingness to pay, etc) is telling us.
“We don’t need steerable beams or wide beams, we just have very focussed beams at a very cheap price per megabit. That is really the philosophy behind Kacific.”
Kacific predominantly plans to act as a wholesaler of this capacity, although it will offer tools to enable its customers to become VNOs (virtual network operators). These customers will mainly be telecoms operators and internet service providers (ISPs).
The company has also initiated discussions with Inmarsat over potentially utilising the latter’s forthcoming Ka-band service Global Xpress. Rather than viewing it as a potential competitor, Patouraux sees it as a complement to its own service. “Global Xpress could be a very nice bridge bandwidth that would allow us to commission some of our customers already.”
Kacific is also looking beyond the launch of its first payloads. “Our plan is to commission a second satellite or payload by 2021. There is enough margin there to put a second satellite on to the same region. We have been fairly conservative with our current market penetration plans. We want to capture perhaps 10% of our particular addressable market. So there is enough space to grow as well for other players to enter the market.”
While this satellite would also be focused on Kacific’s core Pacific Island market, Patouraux said that there are other parts of the world adjacent to this region that have similar needs. He pointed to Central Asia and South America as areas that the company might look at in a couple of years.
