How Businesses Should Prepare for Global Internet Access
With businesses like SpaceX, Amazon, and Google investing in innovations that will expand broadband around the world, it is reasonable to predict that, in the next three to five years, most of the planet will have some form of reliable internet access. That means over three billion people will be, for the first time, directly connected to the global economy. Businesses that are aware of the changes to come, and that prepare for these new markets, will enjoy a range of unprecedented opportunities. Specifically, businesses should prepare in these areas: creating products and services with intuitive designs for first-time users, working with local partners to bring both cultural awareness and linguistic skills to organizations, developing business models that meet the needs of low-income communities, and focusing on video and audio communications.
In May of this year, a rocket launched by SpaceX, the company founded by Elon Musk, carried aloft a payload that heralds great opportunities for global business. Atop the rocket were 60 internet satellites, stacked like pancakes, representing the start of an ambitious network called Starlink. SpaceX plans to launch nearly 12,000 satellites in the next few years to provide broadband services across the entire planet.
Since the World Wide Web was popularized with the launch of the Mosaic browser 26 years ago, only about half the global population has gained access to the internet. According to the UN’s State of Broadband report, 49.2% of people were online by the end of 2018 with reliable, affordable access. Regions vary greatly: Europe is 80% online, Africa only 22%.
Most regions not yet covered are rural and low income. It is often prohibitively expensive to lay fiber optic cable (or any cable) in these areas. Cell tower coverage is less expensive to provide, but requires a critical mass of paying customers to make the economics viable.
Technology firms that benefit from internet expansion recognize this issue. In the past decade, many have started experimenting with “leapfrog” innovations to provide broader internet coverage.
The technology most likely to revolutionize broadband extension in the most comprehensive way, low-earth-orbit (LEO) satellites, are currently being developed and deployed by a number of companies. In addition to SpaceX, Amazon has announced plans to launch over 3,000 LEO satellites. OneWeb, a firm backed by SoftBank, Richard Branson, and others, has also begun preparing and deploying a network of more than 600. The new satellites aim to be faster, smaller, and more powerful than previous models, offering internet latency periods of 25–35 milliseconds — equal to or better than many cable and DSL systems.
Other companies are looking to expand broadband with different technologies. Google is experimenting with high-altitude balloons that act as floating cell towers, and Facebook is investigating solar-powered drones produced by Airbus and others.
While balloons, drones, and particularly satellites are promising solutions to the world’s internet problem, they remain untested on a large scale. When, then, will new markets have high-quality, affordable access to broadband?
Possibly very soon. SpaceX, which is currently leading the race in LEO satellites, plans to launch as many as 800 by the end of 2020, a number it claims will support a commercially viable constellation. OneWeb aims for a commercially viable network by 2021. Amazon’s timeframe is unclear, but given the company’s resources, as well as its access to launch capabilities through Jeff Bezos’s Blue Origin, it is likely to be a major player. Finally, the Google initiative Loon has signed its first commercial client, Telkom Kenya, to provide 4G internet access to rural parts of Africa. Services are set to begin as soon as this year.
On balance, it is reasonable to predict that, in the next three to five years, most of the planet will have some access to reliable, if somewhat expensive, broadband. That means over three billion people will be, for the first time, directly connected to the global economy. First adopters — businesses, government agencies, schools, health clinics — will be eager consumers, even while prices are high. Lowering costs will likely allow broader access to the remaining unconnected populations over the next several years through smartphones and other devices.
The business community should consider this emerging market with astonishment, if for no other reason than its vast size. It will present challenges in terms of economics, geography, language, and demographics. But businesses that are aware of the changes to come, that appreciate the speed and reach of global broadband expansion, and that prepare appropriately for new markets will enjoy a range of unprecedented opportunities. Specifically, businesses should prepare in four areas.
Most of the billions of consumers coming online will be from low-income communities. Many will have limited access to education. Some may not be familiar with products and services that are widely available elsewhere. To address these new populations, products and services offered via the internet need to have accessible and intuitive designs, or include clear instructions for first-time use.
Communications will also need to be localized. Half of the people on the planet speak one of five languages (Mandarin, Spanish, English, Arabic, and Hindi). But the billions of people coming online could be speaking one of 7,000 languages. Communications will need to be driven by local partners who bring both cultural awareness and linguistic skills.
Because many new consumers will be located in low-income countries and have limited resources, business models will need to adapt to their needs. In many cases a “paygo” model, where consumers pay a bit each month from online accounts, can be effective, as has been demonstrated with products ranging from cell phones to life insurance policies. For example, many companies have tried unsuccessfully to sell household solar systems in emerging economies. But when M-KOPA Solar tied billing to user cell phone accounts (and remotely turned off solar systems when bills weren’t paid), sales took off.
There also may be opportunities for hybrid business models involving government and philanthropic partnerships. In fact, the World Bank plans to invest over $200 billion in renewable energy projects in emerging economies by 2025 — an initiative that will result in significant opportunities for the private sector .
If past experience holds true, new markets coming online will quickly be dominated by a small number of global platforms, especially Facebook. In many markets Facebook is offered for free (with data subsidized by Facebook or telecommunications firms), so adoption is rapid. Often consumers aren’t aware that there are other online services or resources outside of Facebook. Research in 2015 indicated that 65% of Nigerians, 61% of Indonesians, and 58% of Indians agreed with the statement “Facebook is the internet.” (Only 5% of Americans agreed.)
Facebook also owns WhatsApp, the messaging service that is dominant in many low-income countries, as well as Instagram, which also has a major international profile. Because of Facebook’s dominance in new markets, every business considering expansion in these areas needs to factor in its stature. In some regions this may mean, for example, abandoning plans for separate web page communications, and using Facebook for company information, communications, and transactions.
A large portion of the populations gaining access to the internet may be illiterate. Communications may be further challenged as many will speak regional languages, which means that audio and video communications will be particularly effective. This can already be seen as smart speaker technologies like Alexa and Google Assistant become more prevalent in international markets. Alexa’s offering in India, for example, already speaks Hindi, Kannada, Tamil, Telugu, and Malayalam, and knows Biryani recipes, Bollywood plot lines, and cricket jokes. Smart speakers are also less expensive than smartphones, and it is possible to imagine free giveaways in the future, much as simple smartphones are now offered for free in India.
While the next billion or so consumers will come online through smartphones, the billion after that are likely to come online through culturally adept smart speakers. Companies seeking to expand in developing countries would be wise to start experimenting with building smart speaker “skills” (like apps), as they will play a major role in future markets.
In short, global broadband expansion represents an opportunity that can’t be ignored. The billions of consumers that will come online in the next few years represent a once-in-history expansion of the global marketplace. Businesses that recognize the speed and magnitude of this transformation, and educate themselves on how to react to it, will be best positioned to take advantage of unprecedented opportunity.
Jim Cashel is Chairman of Forum One, a digital agency, and author of The Great Connecting: The Emergence of Global Broadband, and How That Changes Everything. During academic year 2018-19 he was a Visiting Fellow at the Harvard Kennedy School. He can be reached at Cashel@ForumOne.com.
How Businesses Should Prepare for Global Internet Access
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