Using a low earth orbit (LEO) satellite to provide fast and affordable internet in Borneo is expected to give BIMP-EAGA a leg up in the nascent space economy.
Malaysian startup Angkasa-X is targeting to launch its first LEO satellite 3 years from now to connect the island to the internet, and has partnered with Brunei-based HallBru Tech and gained the support of the Brunei Darussalam BIMP-EAGA Business Council (BEBC).
Borneo is home to the oldest rainforest ecosystems in the world, with many parts remote and having no access to the internet. Investing in terrestrial broadband infrastructure is a challenge, particularly in hard-to-reach areas, which typically have low-density and low-income populations. This means there would be more infrastructure cost per user and less revenue potential for telecoms companies.
A report from global consultancy Roland Berger noted that it is difficult to build telecommunication towers and lines in archipelagic nations like Indonesia and the Philippines, making satellite-based internet as a more viable option.
Connectivity has become urgent in the wake of the pandemic, as lockdowns forced people to work from home and shift to digital payments and services and remote learning among children.
Satellite technology is already being used to connect remote areas in BIMP-EAGA to the internet. For example, Malaysian satellite operator MEASAT’s CONNECTme Now serves rural parts of Sabah and Sarawak. In Mindanao, a university is installing satellite antennas in remote and isolated communities as a pilot project in southern Philippines.
However, a working paper from the Asian Development Bank (ADB) predicts that LEO satellites would be a gamechanger. The small satellites are cheaper to build and launch than the traditional geostationary satellites. These can dramatically expand the availability and reduce the cost of high-speed broadband internet access in remote and inaccessible regions, with levels of service that rival fiber optic cables in terms of speed and latency. This increased bandwidth could be leveraged to increase economic and social development opportunities for individuals, organizations, businesses, and government facilities (including public schools) located in these areas.
LEO satellites’ potential to provide wider internet access has fueled a race among companies seeking to cash in. More than 1,500 LEO satellites are now in orbit and thousands more are in the pipeline. Starlink, which is part of American space company SpaceX founded by Elon Musk, is among the most aggressive. Other global players include Kuiper by Amazon, OneWeb, and Lightspeed by Telesat. In Asia, the Peoples’ Republic of China is playing catchup with Starlink.
Angkasa-X CEO Sean believes LEO satellites are the answer to the connectivity gap in Southeast Asia and the BIMP-EAGA subregion, the company’s target markets. Putting in cables for a fiber network is just too expensive for telcos, he said. “There’s no return on investment because the people living in the rural areas in Asia and in Southeast Asia are mainly poor.”
Southeast Asia saw a rapid rise in the number of internet users in recent years, but as of 2018, internet coverage reached only 53.4 per 100 population. Among the BIMP-EAGA countries, Brunei and Malaysia recorded the highest coverage, at 94.6 and 81.2 subscribers per 100 population. Indonesia and the Philippines, on the other hand, have a longer way to go. BIMP-EAGA targets 100% broadband coverage by 2025.
Spurring the halal economy
With Borneo connected to the internet, Angkasa-X and its associates hope to spur BIMP-EAGA’s space economy as well as the growth of the subregion’s halal ecosystem that includes related e-commerce systems, halal integrity tracking, halal certification and verification system, and Islamic finance.
"We will collaborate with Angkasa-X to accelerate the development of the space economy in the BIMP-EAGA region,” said Benny Yeo, secretary of communications and media at the Brunei Darussalam BEBC and president of digital catalog management platform catTHIS Holdings Corp., in the Angkasa-X news release.
Under the deal, the council will provide Angkasa-X with population and geographical statistics about Borneo. It will also recommend Angkasa-X satellite services to government agencies and business councils in the four BIMP-EAGA member countries: Brunei Darussalam, Indonesia, Malaysia, and the Philippines
Hallbru Tech Managing Director Maj (ret) Dr. Haji Muhd Nirwan Bin Hj Muhd said the deal allows the partners “to literally connect the sky to the land,” noting it is also part of his company’s innovation initiatives. “With our collective experience in technology and the digital economy, it is vital to identify the next wave of technology and the right investment partner to achieve exponential progress and growth.”
BIMP-EAGA Business Council Brunei Darussalam Chairman Pengiran Haji Haris Bin Pengiran Haji Duraman hoped the deal will benefit not just BIMP-EAGA, but the region as a whole. He said the council will be playing an important role to facilitate the requirements of the memorandum. The council will also “see through that the series of bilateral and multilateral agreements for greater opportunities between BIMP-EAGA businesses and partners will be established.”
Morgan Stanley projects that a new space economy is on the edge of liftoff. It sees the $350-billion global space industry growing to more than $1 trillion by 2040, thanks to advances in space research and aggressive forays by the private sector, with satellite internet among the near-term focus.
Seah said Angkasa-X is now working on the design of its LEO satellites. “The first satellite is scheduled to launch in 2024.”
Asked about potential competition from Starlink, Seah said Angkasa-X can offer the service much cheaper than Starlink’s $99 monthly fee. “We can charge one-tenth of the price.” However, he also added, “People living in rural areas cannot even afford $9 a month.”
Starlink is currently in selected markets, including the United States, Canada, Australia, and New Zealand, but it is aiming for a global presence.
Angkasa-X aspires to be a unicorn and the number one go-to company for LEO satellite-based internet services in Southeast Asia. Angkasa means “space” in Malay.
Seah said not one country in Southeast Asia is using a LEO satellite. Angkasa-X will work with telecom companies in rolling out the service in the region. It will offer telcos satellite-as-a-service contracts. In turn, the telcos, which have the franchise to operate in the countries, can offer satellite internet to their clients. “We just want to provide telcos the bandwidth, so it's a win-win situation since we do not compete with them.”
He said the company also developed another satellite to provide earth observation services to clients. The first satellite for this service will be launched next year. The satellite can be used for disaster response, navigation, parcel tracking, and city planning.
Seah said the number of satellites that Angkasa-X will build and launch depends on how much bandwidth the telcos would need to serve customers in rural areas.