Internet Access for Africa & other Emerging Markets

HIGH POWERED BACKING FOR GLOBAL WEB ACCESS PLAN

Google and HSBC have thrown their weight behind a plan to provide inexpensive high-speed Web access by satellite to millions in Africa and other emerging markets.

The system will become operational by late 2010, according to a statement Tuesday from O3b Networks, based in Britain and backed by the two companies and Liberty Global, the U.S. cable operator controlled by John Malone.

Thales, the largest defense electronics maker in Europe, said it had started construction of 16 satellites for the network.

The satellite order is the first stage of a 500 million, or $710 million,
project to bring the Internet to parts to Africa, South America, Asia
and all South Pacific Islands, said the O3b Networks chief executive, Greg Wyler.

Allen & Co., a investment bank based in New York, is also participating in the project, though it is investing less than the other three parties, said Charles Palmer, a spokesman for O3b Networks, which stands for "other three billion," those who do not have Internet access.

Together, the backers are investing 43 million, which is sufficient at this stage, Wyler said. The company needs an additional investment of about 100 million and the "current shareholders are a possible source," he said. In addition, the company will borrow about 350 million.

The group is also hoping that Internet access will prove as popular as mobile phone services have in recent years.

"The global bet is: will the GDP and the growth and demand in all of the emerging markets grow?" Wyler said. "If the answer is yes, maybe not in some countries but certainly in others, then it's a good bet."

The South African finance minister, Trevor Manuel, said he welcomed the project.

"The information gap is very real and clearly whatever we can do to close it must be encouraged," Manuel said at a UN-backed development conference in
Berlin. "Any initiative that can leapfrog over traditional means of
getting information to people must be encouraged. Information is power, and it supports democracy and it supports decision-making."

The project intends to offer fiber performance over satellite to parts of the world where it is not commercially viable or practical to deploy a fiber network.

Because its satellites orbit earth at lower altitudes than those used to beam TV signals to homes, they work better for Internet access, where latency - the amount of time it takes for bits of information to travel from source to destination - is an issue, Wyler said.

In some parts of the world, the company will compete with fiber-optic cables currently under construction; for instance, over a dozen cables have been announced connecting Africa to Europe, the Middle East and Asia.

"There's some fiber in place on the coast of Africa, there are pieces of fiber around, and this is meant to compliment those pieces," Wyler said. "We have the ability to offer pricing that is lower than what is being offered today. We have the ability to bring that to everywhere."