Some areas of the Asia Pacific region have been abandoned by traditional satellite operators, cutting them off from the rest of the world. Landlocked and remote areas have been labeled as nonviable markets due to low purchasing power and high setup costs.
In the region, more than two billion people currently lack access to the internet, either because they live in places that are completely unconnected or because it is too expensive.
With only 18% of the population using mobile internet as of the end of 2018, the Pacific Islands had the lowest mobile internet penetration of any region in the world.
Penetrating the unworkable market
Kacific Broadband Satellite Ltd saw a business opportunity with a high return, whereas traditional satellite operators only saw unworkable and impractical markets. The business recognized the potential of utilizing cutting-edge satellite technology to address a long-standing issue in the Asia Pacific region.
Kacific uses a two-pronged strategy to penetrate the market successfully—a sustainable business model and a strategic choice of technology.
A sustainable business model
Kacific’s move to adopt both a wholesale and a retail business model has commoditized the products and services it offers to end-users. By disrupting the value chain and partnering with localized authorized distributors and resellers to provide terminal kits, Kacific has reduced the entry cost of terminal kits by 40% in most markets, bringing it down to an average price of USD600, offering affordable broadband services to businesses and communities.
Kacific’s terminals are shared among 50 users on average, who primarily target enterprise end-users like SMEs, branch offices, and government facilities. As a result, they are very affordable for each end-user.
With strategically placed regional warehouses made available in almost all the countries it serves for rapid deployment, Kacific is able to reach and tap into the vast market of rural customers in the Philippines, Indonesia, Papua New Guinea, Solomon Islands, Vanuatu, Micronesia, Fiji, Kiribati, and Tuvalu at a faster rate.
This leads the entry price point for broadband service to an enterprise to be around US$70 a month for good quality broadband, enabling regular and reliable use of everyday internet applications for business operations, such as Youtube, Zoom, Skype, Facebook, and WhatsApp.
The latest satellite technology
Kacific1‘s satellite reuses the same spectrum or frequencies eight times in 56 spot beams, unlike more traditional fixed-satellite services that reuse spectrum only once or twice. This results in greater efficiency for Kacific1 and reduced cost per bandwidth.
Kacific also has a state-of-the-art teleport, hub, and managed service network designed to deliver affordable prices per GB or Mbps to end-users.
Kacific has been EBITA positive since April 2021, just a little over a year since launching the Kacific1. This is a testament to the effectiveness of the company’s business model and strategies and that there is a pent-up demand for connectivity in the Asia Pacific region.
The success of Kacific1 has prompted plans for the launch of a second and a third satellite, Kacific2 and Kacific3, to meet the region’s needs with even better technology allowing flexible bandwidth allocation and even higher degrees of frequency reuse.
Kacific has also revealed that the launch of additional satellites is already in the pipeline, a total of seven satellites reaching globally by the end of the decade.
