Is Satellite Internet Facebook's Next Growth Driver?

  • Facebook is partnering with Eutelsat to launch a satellite into orbit that will connect millions of people to the Internet.
  • Facebook and Eutelsat expect to begin beaming Internet coverage to parts of west, east and southern Africa in the second half of 2016.
  • The initiative is part Facebook's efforts to connect the world.
  • Delivering Internet via satellite or high-altitude drones is among the best available connectivity options for large unconnected populations in Africa and other regions.
  • Facebook's core business depends critically on how many people have Internet access and how much time they spend online.

Facebook (NASDAQ:FB) is ready to launch its long rumored satellite Internet project. Facebook and Eutelsat said they expect to begin beaming Internet coverage to parts of west, east and southern Africa in the second half of next year. South Africa, Nigeria, Uganda and Kenya are among the countries that will be covered.

In a Facebook post, Facebook's founder and CEO Mark Zuckerberg announced Facebook's first project to deliver internet from space. As part of the efforts to connect the world, the Internet giant is partnering with Eutelsat Communication (OTC:EUTLF) to launch a satellite into orbit, AMOS-6, which will connect millions of people to the Internet.

Using state of the art satellite technology, Eutelsat and Facebook will deploy Internet services designed to relieve pent-up demand for connectivity from the many users in Africa beyond range of fixed and mobile terrestrial networks. Satellite networks are well suited to economically connect people in low to medium population density areas and the high throughput satellite architecture of AMOS-6 is expected to contribute to additional gains in cost efficiency.

"Over the last year Facebook has been exploring ways to use aircraft and satellites to beam internet access down into communities from the sky," says Zuckerberg. "To connect people living in remote regions, traditional connectivity infrastructure is often difficult and inefficient, so we need to invent new technologies. As part of our collaboration with Eutelsat, a new satellite called AMOS-6 is going to provide internet coverage to large parts of Sub-Saharan Africa."

The Eutelsat press release notes that, under a multi-year agreement with Spacecom, Eutelsat and Facebook will utilise the entire broadband payload on the future AMOS-6 satellite and will build a dedicated system comprising satellite capacity, gateways and terminals.

"This is just one of the innovations we’re working on to achieve our mission with," said Zuckerberg. "Connectivity changes lives and communities. We’re going to keep working to connect the entire world - even if that means looking beyond our planet." is a Facebook-led initiative bringing together technology leaders, nonprofits and local communities to connect the two thirds of the world that doesn’t have internet access. The recently announced Free Basics Platform is an open program for developers to easily create services that integrate with

"Facebook’s mission is to connect the world and we believe that satellites will play an important role in addressing the significant barriers that exist in connecting the people of Africa," said Chris Daniels, VP of "We are looking forward to partnering with Eutelsat on this project and investigating new ways to use satellites to connect people in the most remote areas of the world more efficiently."

Scheduled for start of service in the second half of 2016, the Ka-band payload on the AMOS-6 geostationary satellite is configured with high gain spot beams covering large parts of West, East and Southern Africa.

Established in 1977 and headquartered in Paris with an international workforce of 1,000 staff, Eutelsat Communications is one of the world's leading operators of communications satellites. The company provides capacity on 39 satellites to clients that include broadcasters and broadcasting associations, pay-TV operators, video, data and Internet service providers, enterprises and government agencies. Eutelsat’s satellites provide ubiquitous coverage of Europe, the Middle East, Africa, Asia-Pacific and the Americas, enabling video, data, broadband and government communications to be established irrespective of a user’s location. The company is listed on NYSE Euronext Paris with the symbol ETL.

"We are excited by this opportunity to accelerate the deployment of our broadband strategy and to partner with Facebook on a new initiative to provide Internet access services in Africa," said Eutelsat Chairman and CEO Michel de Rosen. "Eutelsat’s strong track record in operating High Throughput Satellite systems will ensure that we can deliver accessible and robust Internet solutions that get more users online and part of the Information Society."

For Facebook, this satellite system represents one of many technology investments to enable cost-effective broadband access to unconnected populations. Facebook is also building Aquila, a 140-foot solar-powered unmanned plane that can beam Internet connectivity from 60,000 to 90,000 feet.

Facebook's core social networking business, and new related initiatives such as Facebook's push to news publishing and video advertising depend critically on how many people have Internet access and how much time they spend online. Recently, Facebook had one billion users  on its platform in a single day and in July the company reported in its Q2 earnings that it had about 1.5 billion people logging on at least once a month.

These figures are impressive, but they also show that most people on the planet are not using Facebook - because they aren't online. That's especially true in regions like Africa, where Internet connectivity via satellite or high-altitude drones is among the best available options. Therefore, Facebook's initiative makes a lot of business sense, and can be expected to have a positive impact on the Facebook stock price in the mid and long term.

Giulio Prisco Giulio Prisco   on Amigobulls :
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