O3b Networks will soon help lower Internet access costs in rural areas.
Broadband Internet is a crucial portal to the global economy. But traditional, land-based cables don’t reach much of the world, especially those individuals and businesses located in developing regions. In 2010, for example, fixed broadband subscriptions in Africa accounted for less than 1 percent of the global total, while estimated Internet users on that continent accounted for less than 4 percent.
By funding a satellite-based Internet development project, IFC is helping address that problem. O3b Networks, a company striving to bring Internet access to the “other 3 billion” potential users worldwide, will soon deliver broadband connectivity to underserved regions—from space. From a constellation of eight satellites in medium earth orbit, O3b will increase bandwidth capacity and lower Internet access costs for those rural areas between 45 degrees of latitude north and south of the Equator. The system has the potential to provide millions of people with connectivity to broadband networks.
Though initially backed by a number of high-profile investors—including Liberty Capital, HSBC, and Google—many commercial lending banks deemed the venture too risky because of volatility in credit markets and uncertainty resulting from the global economic downturn.
IFC helped rally support from development finance institutions to bridge the investment gap. By pledging $70 million from its own account and mobilizing $170 million in parallel loans from other institutions, IFC helped fulfill the remainder of O3b’s investment goals.
Expanded Internet access aligns with a number of IFC’s strategic priorities. We’re tackling constraints to private sector growth by improving access to communications technology, addressing access gaps in telecommunications services, and supporting Internet-based business innovations.
In addition, the undertaking should lower costs for cellular operators. Mobile phone use is generally more common than Internet use in developing regions—lower costs here will also mean greater connectivity.
The first round of satellites will be launched in 2013.