This article originally appeared in the Jan. 29, 2018 issue of SpaceNews magazine.
Satellite network operator Quika Ltd. is launching an “entirely free” internet service this spring in Afghanistan and Iraq and plans to reach nearly half of all African nations this summer.
Announced this month at the Cabsat 2018 conference in Dubai, the Quika Free service relies on leased Ka-band satellite capacity to deliver what its founders are calling “the world’s first entirely free high-speed satellite internet for consumers in developing countries.”
There is a catch, though: Quika Free isn’t entirely free. Initial customers could have to pay a deposit of up to $350 for self-installable user terminals. If customers want higher speeds, more generous data caps, or to hide the ads that will help underwrite the free service, they would also need to upgrade to one of Quika’s paid plans.
Founded last year by Alan Afrasiab, who is also CEO of U.K.-based satellite network operator Talia Limited, Quika aims to sidestep a long-standing challenge with monetizing low-income customers by providing the service pro bono to users being asked to help defray equipment costs.
Quika’s network activation date is March 1, followed by testing and the first subscribers accessing the service in April. Quika initially will rely on shared access to Talia’s Ka-band high-throughput capacity on the six-year-old Arabsat-5C satellite over Iraq and Afghanistan.
Afrasiab said Quika anticipates serving 1,500 registered and validated users when the service starts with Arabsat-5C, and 4,000 when YahSat’s just-launched Al Yah 3 satellite is active. Quika intended to use Al Yah 3 capacity starting in June, but that could change given that the satellite was delivered to the wrong orbit last week when its Ariane 5 launcher suffered its first anomaly in 15 years.
Afrasiab said local distributors have been promoting the Quika services in Iraq and Afghanistan, to be followed by a larger advertising push across Africa.
(Credit: Quika Ltd.)
Capacity reserved by Talia on the Al Yah 3 satellite will expand Quika’s coverage to some 24 countries across Africa, according to Afrasiab. He said Talia already purchased associated ground network hardware from Newtec and installed it at Jordan Media City, a tax-free international media hub in Amman, Jordan, that Quika will also share. Talia has invested $5 million in Quika to launch the new company, he said.
“We passionately believe that the opportunities the internet provides shouldn’t be limited by geography, culture, wealth or infrastructure and should be available to all,” Afrasiab told SpaceNews by email.
Afrasiab said that Quika Free is still expected to generate a profit for the company through the advertising revenues that enable the service to be “free.”
Recognizing that the $350 deposit may be a stretch for prospective low-income users — in local currencies, that’s roughly 25,000 Afghan afghanis or 415,000 Iraqi dinars — Afrasiab said Quika will seek to eliminate that barrier as well.
“As an organisation, we are looking at available funding opportunities to reduce or remove that cost completely,” he said.
Should subscribers cancel the service, Afrasiab said Quika will refund deposits “without a timescale providing the unit is in a good and working condition.” He said Quika is negotiating with several terminal manufacturers, and hopes to further refine unit costs on a per-country basis.
David Hartshorn, secretary general of the Global VSAT Forum, a satellite communications trade group, told SpaceNews that $350 is “in the ballpark for consumer-grade broadband terminals today,” and, structured as a deposit, doesn’t expect it would be a large impediment to Quika’s success.
“If history is any guide, when your terminal price is down as low as below $500, the operator has a relatively high degree of latitude in how to price the terminal — provided that they have a model where they can win back revenue sufficient to offset the cost of the terminal by other means,” he said. “And in this case where you have advertising revenue, subscriber revenue and then other revenue from data-gathering and data-mining, there is a possibility that they will have adaptability and flexibility in a way that they price the terminal.”
Hartshorn said he anticipates satellite broadband equipment to follow a similar trend as satellite television dishes, which were too expensive for some regions until production rate brought equipment costs down.
“We’ve seen this business model and we’ve seen it work … [but] I have not seen this attempted on a major scale by the satellite industry until now. I think it’s a very exciting and innovative play for the communications sector,” Hartshorn said of Quika.
An oversupply of satellite capacity is helping make the Quika Free service financially viable by driving down bandwidth prices globally, said Afrasiab said. He expects prices to continue to drop.
He said Quika is in discussions with operators designing low-Earth-orbit constellations about making the free service available worldwide.
Quika and Talia are being set up to not compete with each other, with Talia keeping its focus on multi-national organizations in the communications, energy, government and nonprofit sectors, he said. Quika’s focus is on consumers and small-to-medium enterprises, Afrasiab said.