New Market Trend Report: Wi-Fi Hotspots, Changing the World by Connecting the Unconnected

Monday 19 June 2017
New Market Trend Report: Wi-Fi Hotspots, Changing the World by Connecting the Unconnected

Application note

In a world where Internet access is coming to be regarded as an essential utility, not having access to broadband connectivity can severely affect quality of life. Large parts of the globe, especially those in rural locations, can find themselves cut off from the digital revolution that is happening all around us, harming their potential for growth and development.

However, this is not solely a problem in rural or hard-to-reach areas. A recent market study released by the Wireless Broadband Alliance showed that more than half of the global urban population remains unconnected to broadband Internet, with 37% living in some of the world’s wealthiest cities.

As the number of Internet-enabled devices globally continues to grow, the demand for Internet connectivity is only going to increase – can satellite Wi-Fi hotspots provide the answer?

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Marc Welter wrote

thanks for sharing Newtec's insights into connecting the unconnected. For me the question is on whether traditional consumer DTH broadband (such as Sat3Play, Konnect Africa, SkyEdge, etc) can ever be successful in SSA to reach the masses with very low ARPU?

Richard Schaap, Market Director Broadband Access, Executive Director Business Development at Newtec wrote

Dear Marc,

What are the opportunities and the constraints of the mass market in SSA?

The opportunity resided for a large part that by 2020 in Africa alone, there will be more than 500 Million smartphones in use, all WiFi enabled. These consumers can afford such smartphone, but are not in a position to subscribe to a monthly recurring internet access service fee, but one way or the other, they want to have access, but limited to the buying power they have, which in many cases is limited to a few $$ per month.

Next to the constraints of the service subscription, traditional VSAT terminals are too expensive for the average consumer. Even if the terminal is FOB Europe or USA only $100, before it is delivered, imported and all duties and levies paid and installed, it will be between $700-$1.000, so not really addressing the low end of the consumer market, but only the happy few.

Wifi hotspots are having initially a higher Capex, but can host a large user network of over 100 or 200 users simultaneously. Service can be sold for instance on pre-paid voucher base, for the amount the user can afford and limited in time or volume of the service in line with the paid price.

The result is that the sum of the individual ARPUs is justifying the Capex for the hotspot.


Richard Schaap