Kacific looks for potential investors in NZ

Kacific will position four or five beams over New Zealand, complementing fibre networks by offering broadband service to remote areas and service assurance to customers, mitigating the impact of disruption of the fibre trunk

Late last year a Singapore-based company, Kacific Broadband Satellites, announced plans to launch a Ka Band High Throughput Satellite (HTS) to provide enhanced broadband to 40 million people in the Pacific, including New Zealand.

CEO Christian Patouraux said this would be the world’s most geographically dispersed broadband satellite footprint. “Our aim is to create high quality broadband network offering direct Internet access to around 99 per cent of the government agencies, institutions, businesses and people within the total footprint area.”

Patauraux was in New Zealand this month talking to potential investors and resellers.

“It went very well,” he says. “We’ve got one very interested potential investor, who is now doing due diligence. I also spoke to a couple of potential customers, both of whom showed substantial interest.”

Two private investors have already provided seed capital for Kacific. Patouraux says one is a senior executive from the satellite industry.

The organisation leading the capital raising is a boutique New Zealand finance house, Caniwi Capital. “We’ve met all our financial milestones so far,” Pataouraux says. “We’ve also got investment from the US, Europe and Singapore.”

According to the World Bank, the Pacific is significantly under-served in terms of broadband access. Estimated total potential demand for bandwidth by Pacific island states is 44 Gbps. Today just 20 per cent, or less than 10 Gbps, is supplied.

Kacific says the Pacific has the highest Internet pricing and the highest Skype call prices anywhere. Substandard, over-contended, 1 Mbps broadband services can cost more than US$700 per month in some territories.

Kacific intends to sell wholesale bandwidth and anticipates that telcos and ISPs will offer it to end users at speeds of up to 10 Mbps and at price points as low as 5 per cent of current costs. The service will be provided through small terminals costing just a few hundred dollars.

According to its website, the company expects to begin its service in Q1 2017. It has defined its specifications for satellite manufacturers and is taking reseller bookings for wholesale broadband at a cost of 20 per cent of current offerings.

Geographic and demographic factors mean that Pacific island nations have two to seven times lower Internet penetration than continental nations with comparable GDP per-capita and adult literacy rates. Macro-economic modelling suggests there is an untapped pool of 2 million Internet users in the Pacific islands and eastern Indonesia who would be connected if Internet prices were in line with the rest of the world, Kacific says.

The World Bank notes that developing countries enjoy an increase of 1.38 per cent per year in average GDP for each 10 per cent increase in broadband penetration. But at penetration rates below 5 per cent, which is the case for the majority of Pacific island nations, this growth does not occur.

To help address these inequalities, Kacific will provide broadband service via a payload co-hosted on a geostationary satellite. It will operate up to 48 beams, each providing coverage of 700km diameter and up to 400Mbps (duplex) throughput. Beams can be adapted to provide service to remote atolls with low populations without increasing the price of bandwidth in those locations.

“We have been highly encouraged by feedback from government agencies and Internet and economic development communities throughout the Pacific,” says Patouraux. “They recognise the significance of competitively priced high availability broadband to economic growth, health and education throughout the region. High speed broadband is now a fundamental infrastructure for economic growth, employment, security and the improved delivery of essential services.

“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 per cent penetration threshold, thereby substantially lifting their GDP.”

Kacific says its target customers include mobile networks (for back-hauling), primary, secondary and tertiary education institutions, hospitals and healthcare providers, hotels and airlines and tourist services, government departments, agencies and services, emergency services, aid agencies, banks and financial institutions, mining, oil and agriculture businesses, as well as small-to-medium enterprises and consumers.

Kacific will position four or five beams over New Zealand, complementing fibre networks by offering broadband service to remote areas and service assurance to customers, mitigating the impact of disruption of the fibre trunk.

No doubt, New Zealand's rural community will follow Kacific's progress closely.