The ‘co-opetition’ of satellites in the terrestrial world

Africa’s telecom landscape is rapidly evolving, driven by the need to bridge the digital divide and reach over 800mn people who remain outside the threshold for affordable and reliable connectivity.

Towercos have been on the forefront of this, but recent advancements in non-terrestrial networks (NTNs) are bringing new dynamics to the sector. TowerXchange Meetup Africa’s NTN panel explored collaboration and competition dynamics between terrestrial tower companies and NTNs, and a new ‘co-opetition’ relationship between towercos and satellite operators.

The rise of NTNs are creating new opportunities and challenges for the African telecom market, particularly in terms of collaboration and competition with traditional towercos.

One of the central themes of the panel was the role NTNs can play in complementing existing telecom infrastructure and services. Neville Thandroyan, Director of Business Development at Helios Towers, sees “non-terrestrial networks as a collaborating additional player to the ecosystem, helping to accelerate digital connectivity.”

In some markets, such as the DRC where Helios Towers operates, there are certain areas which are near-impossible or extremely impractical for a towerco to provide terrestrial connectivity to. Satellites can help solve these challenges by offering a complementary service to meet MNO coverage needs.

NTNs, especially LEO (low earth orbit) satellites, are bringing down the costs of connectivity in these hard-to-reach areas. By offering coverage in remote locations where building terrestrial towers is cost-prohibitive, NTNs accelerate the push towards universal digital connectivity.

This collaboration allows MNOs to extend their coverage footprint without incurring the high costs associated with traditional terrestrial networks. As Thandroyan pointed out, this makes NTNs a vital player in the overall mission of increasing digital access across the continent.

Despite the disruptive potential of NTNs, terrestrial towercos are not being displaced. Instead, they are finding ways to collaborate with satellite networks. Thandroyan highlighted the real estate role that towercos play in supporting NTNs.

As satellite operators like Lynk and Eutelsat deploy ground base stations to facilitate communication between satellites and terrestrial networks, they require physical locations with stable power sources. “Towercos, which already provide space and power for telecom operators, are well-positioned to support these ground base stations”.

Moreover, the collaboration between towercos and NTNs is not limited to passive infrastructure. Towercos are exploring ways to package LEO satellite coverage with existing services to enhance MNO offerings.

The possibility of offering LEO-based emergency services to provide additional resiliency in case of outages in traditional terrestrial networks. In this way, towercos can work alongside NTNs to enhance service delivery for MNOs and ensure more robust network performance in both urban and rural areas.

However, NTNs aren’t coming quietly into the telecom sector. Thomas Thiongo, Regional Sales Director for Eutelsat Oneweb, discussed the disruptive impact NTNs, particularly LEO networks like Starlink and OneWeb, are having on the traditional telecom business model.

NTNs change not only the way services are provided but also how business models are structured. While companies like OneWeb primarily target business-to-business (B2B) services, the involvement of high-profile customers interested in LEO services has led to growing excitement in the market. “Now we will see less ground investments due to satellites, moving backhaul over non-terrestrial rather than terrestrial backhaul. LEO will be a game changer in collaboration with towercos”.

Thiongo noted that while NTNs have historically relied on terrestrial infrastructure, such as K-band and C-band ground stations, the growing sophistication of satellite technology means that less ground investment will be necessary moving forward.

The use of NTNs for backhaul, for instance, could significantly reduce reliance on terrestrial backhaul systems, making it easier to deploy networks in areas without existing telecom infrastructure. As NTNs gain traction, this shift may lead to a more collaborative relationship with towercos, where the two technologies work together to provide seamless connectivity.

Cost efficiency was a key topic throughout the panel discussion, with participants highlighting the various ways NTNs can help reduce operating costs for MNOs.

Bradley Shaw, VP of Africa & Midde East at Lynk, explained how LEO networks could solve the digital divide "instantaneously" once fully deployed, offering a cost-effective alternative to traditional terrestrial infrastructure.

Lynk's LEO network requires no capex or opex commitments from MNOs as it operates on a revenue-sharing or per-message usage basis. This model is particularly attractive to MNOs, who are under constant pressure to keep costs low while expanding coverage.

However, Thandroyan cautioned that cost-sharing models between towercos and NTNs need to make financial sense for both parties. Whether the cost is borne by MNOs or by the NTNs themselves, price points must be carefully negotiated to ensure profitability for all stakeholders.

Towercos, traditionally focused on managing physical infrastructure, are now navigating this new collaborative landscape to ensure that they continue to add value while keeping costs under control.

The discussion also touched on the regulatory environment and the complexities of infrastructure sharing between NTNs and terrestrial networks.

“MNOs, faced with stiff competition, can be reluctant to share infrastructure, particularly as they strive to recoup the significant investments they have made in their networks,” said Thiongo. This competitive environment creates a degree of rigidity when it comes to collaboration, as MNOs often prioritise their own financial recovery over broader industry collaboration.

That said, regulators are beginning to play a more active role in facilitating partnerships between NTNs and MNOs. Thiongo mentioned that collaboration between regulators and MNOs is crucial in securing funds, such as those from Universal Service Funds (USF), which are often earmarked for digital divide penetration.

As more stakeholders recognise the need for regulatory reforms to support hybrid network models, it is likely that greater collaboration will emerge between NTNs and traditional telecom operators.

While NTNs bring significant benefits to the telecom ecosystem, they are not a complete replacement for terrestrial infrastructure. “NTNs play a complementary role, particularly for MNOs looking to extend coverage in rural or underserved areas,” said Shaw.

In urban environments, terrestrial tower networks offer the density needed for high-speed data services and low-latency applications, which NTNs currently cannot match. “Dar es Salaam has about 1,000 towers, which covers the same geographic areas as a single LEO satellite.”

However, in rural areas, NTNs can provide temporary coverage when local towers go down, such as during adverse weather conditions. Once the terrestrial network is restored, the coverage can switch back to the local towers, making NTNs a valuable fallback solution.

Satellites can also serve as an initial connectivity solution for areas which lack the commercial viability for even a rural telecom tower. But as these rural communities adopt digital tools and capacity demands increase, this NTN coverage can be replaced by a more robust terrestrial tower.

While NTNs are poised to revolutionise connectivity in rural and underserved areas, they do not pose a direct threat to terrestrial infrastructure. Instead, NTNs and towercos can work together to expand digital access, with NTNs providing critical coverage in hard-to-reach areas and terrestrial towers delivering the density needed for urban environments.

As the telecom landscape continues to evolve, the relationship between terrestrial networks and NTNs will be defined by mutual collaboration, regulatory developments, and innovative commercial models. Together, they have the potential to transform Africa’s digital infrastructure, making universal connectivity a reality.