Kacific, a start-up planning to provide satellite broadband to Pacific nations, is in talks with manufacturers and operators to order a Ka-band hosted payload.
The company expects to order the payload and launch vehicle by the third quarter of 2014 with…
Kacific, a start-up planning to provide satellite broadband to Pacific nations, is in talks with manufacturers and operators to order a Ka-band hosted payload.
The company expects to order the payload and launch vehicle by the third quarter of 2014 with services scheduled to start in early 2017.
Speaking to SatelliteFinance, Kacific co-founder Mark Rigolle said the company has held talks with a number of satellite operators over a hosting partnership, with regional players being particularly receptive. He added that one conversation is at a fairly advanced stage.
Kacific has so far been financed through a round of seed funding from family, friends and members of the satellite community. This has provided sufficient funds during the project phase of the past six months but it now plans to undertake an investment round in the “tens of millions of dollars”.
This funding is expected to take place in the first or second quarter of next year and will be used to partially fund the payload.
Rigolle, a former CFO of SES and CEO of O3b Networks, pointed out that this is all dependent on the company finding a hosting partner, although Kacific would consider ordering a high throughput satellite of its own if no such deal emerged.
Based on its hosted payload business plan, Rigolle estimates the total project peak funding requirement will be around US$200m. This includes the payload, ground segment requirements, OpEx and recruitment.
As such, the company will look to raise debt as well as equity. It is planning on speaking to export credit agencies, which in turn has an impact on Kacific’s discussions with the satellite manufacturers. The company also intends to hold talks with Asia-Pacific development banks about its plans.
The idea for Kacific comes from its CEO and co-founder Christian Patouraux. The former chief development officer of O3b saw that the Pacific is significantly underserved in terms of broadband access. He points to macroeconomic modelling that suggests an untapped pool of more than two million potential internet users in the Pacific Islands and eastern Indonesia – if price and access was in line with the rest of the world.
Kacific estimates that the potential demand for bandwidth from Pacific island states is 44 Gbps, at present less than 10 Gbps is supplied. The company plans to sell wholesale bandwidth to government agencies, telcos, ISPs, development agencies and businesses.
Patouraux said: “This will be the world’s most geographically dispersed broadband satellite footprint. By providing high quality broadband at a fraction of the current cost, we will allow a much larger part of the population to participate in the digital age. With support from local governments and global institutions, that will foster greater internet usage on the island, fuelling economic growth. At the pricing and speed Kacific will offer, many Pacific nations should be able to reach the critical 10% penetration threshold, thereby substantially lifting their GDP.”
Kacific had originally planned to provide the service to just the Pacific Islands but has since expanded its coverage to eastern Indonesia, Papa New Guinea and New Zealand.
Rigolle said that, while this means a slighter higher CapEx requirement, the wider coverage means a much greater potential market, increasing revenues, and helping to keep the wholesale price low.
At present, Kacific is looking at a hosted payload with 48 Ka-band beams. At least half of these will be directed over the Pacific Islands while four or five will serve New Zealand.
This plan, though, remains flexible due to the many variables that remain, including the hosting partner, the manufacturer and the demands of potential investors.
In order to assuage the latter, Kacific will look to secure a number of pre-sale agreements to both generate cash and give the business momentum.
While Patouraux and Rigolle’s former company O3b would seem to be a direct competitor for this type of service, Rigolle stated that O3b was just “part of the solution. An HTS is the solution”.
He argues that O3b works for established telecoms operators looking to expand their broadband offering and can afford the O3b ground equipment but while that will work for some islands it will not for others.
“We have looked at those areas where the only solution is a high throughput satellite.”
Near Earth and Soft Venture Pte are advising Kacific on the project.
