K-Net: Leading Provider of Business-Grade Network Solutions in Ghana

Interview with Richard Hlomador, CEO of K-Net

What is your assessment of the sector here in Ghana? Is it a competitive environment? What are the latest trends in the sector itself?

In general, Ghana is becoming very digitally competitive. If one looks at when we started Internet Access as a country, moving towards ICT, which became the hot topic at the time in 1996, we were using dial up Internet access. Today, we are using fiber optics. The journey from dial up Internet access to date is full of impressive achievements. This is largely due to the fact that a lot of the mobile telephone operators are very active in this space, including the private sector, digital service providers like ourselves, and many other Ghanaian companies. Now, every business today needs an app of some sort to run effectively. Ghanaian private companies are developing apps to be utilized by Ghanaians. Mobile operators are running a lot of Internet-based services, including packages to suit apps that will help to develop the country. There are six mobile operators who are providing Internet services at the moment. Before, we had private sector or indigenous Ghanaian Internet service providers -who we typically would call ISPs- but today, the mobile operators have fully taken over that space. The telecom sector continues to grow ambitiously.

Is there space still left for companies to enter and grow, as it is very competitive?

Much of the sector is growing quickly and aggressively. There is still a lot of space left in the digital inclusion agenda of any country and continent even. I would focus on Ghana and Africa, especially on the rural inclusion and rural telecoms. There is a huge infrastructure deficit, which needs to be seriously addressed in order to close the digital inclusion gap. When you look at health, agriculture, education, and farming, there is a lot of room for development of digital infrastructure that will support these communities to help them grow much faster and better. In fact, digital infrastructure will even support self-feeding, which means growing our own agricultural crops locally for consumption. We do a lot of imports in terms of agriculture, and technology can improve that. Technology largely depends on telecoms.

What are your competitive advantages? What do you offer that is different from other companies?

We are back end service providers and we are coming up with a new solution that will allow every rural person in West Africa to be able to be part of the digital inclusion agenda.

We started as an ISP and evolved into a telecom company. We saw into the future that the mobile operators, based on technologies that were evolving, would sooner or later take over the consumer Internet space. So, we specialized ourselves into a niche for providing backbone or back-end services for consumer facing companies. For example, TV companies, mobile phone companies, and banks are the people we work for. We are a corporate service provider. Our niche and focus are for tailoring of services for corporate institutions to be able to deliver services uniquely for their consumers. In the TV sector, for example, as far back as eight or nine years ago, we provided all the key back-end services for all the analog TV operators, and then overtime we evolved them into digital TV operators. We have a digital TV platform that has been responsible for the distribution of the analog TV operators’ broadcast feed to their relay stations. This platform has evolved and became DTH (direct to home) services for these operators. We have completed the digital TV migration for the country, and have successfully migrated Ghana from analog to digital TV broadcasts.

Regarding mobile phone operators, as far back as eight years ago, residents in the rural areas were denied mobile network connectivity. Most of these GSM operators have been here, but nobody looked after the rural populations because they believed it was not economically viable for them. We were the first to develop a mobile infrastructure platform for this segment that we called MRIID, which essentially delivered mobile connectivity as well as Internet access. We built a platform, of which a prototype is right here (behind me), which is solar powered and is VSAT or satellite backhauled. In a situation like that, you can install this unit anywhere, as long as there is sun and you can see the sky, and it covers 2,000 people per site. It is a 2-tier platform. The first was TV, and now we do mobile operators.

Of course, we provide a lot of Internet and network connectivity for banks within the country for inter-bank operations as well as head office-to-branch operations. We also provide network connectivity solutions for several other key sectors of the economy, including government agencies, mining companies, industrial establishments, educational institutions, and so on.

The company has five key areas of operation. We have our teleport, which is at our Tech center. The Tech center is where we have deployed all the various technologies that we use in the delivery of services to our end-customers. It is a 100 x 100 m² center which serves as a data center, as well as a teleport for hosting all our satellite-based services. For instance, we monitor satellites with footprints in Africa for Global Satellite Operators so they can constantly have real-time information on how their satellites are faring in Africa. We provide Satellite uplink services for television broadcasters.

In broadcasting, we operate a Digital Terrestrial TV (DTT) network on behalf of the Government of Ghana, as well as a Direct-to-Home (DTH) TV network for private TV broadcasters within Ghana and neighbouring West African countries.

Rural telephone is another department. We use solar-powered VSAT-backhauled systems for the delivery of GSM and Internet related services in the rural areas.

We started out as an Internet Service Provider, ISP, and it is still our core business. Now, we are also into IOT service provider. IOT is an acronym for “Internet of things”, because everything is about the Internet today.

We are also involved in e-commerce because if you want to provide rural telephony and reduce the cost of using the network, then you have to reduce the cost of logistics and everything else related to that. There are kiosks in these rural areas where one can go and top up phone credit, or one can do it electronically online.

Among these different projects, one of your major ones you have achieved is the migration you do for digital tools. Can you explain in more detail?

In Ghana, there are a lot of TV companies, so it was important for Ghana to do this migration on time, as per ITU requirements. We participated in a tender which we won, because even eight years before this, we had already been providing digital services on satellite platforms. We built 42 digital locations, or transmitter sites, in Ghana with digital equipment and backup power systems inside shelters. They are all powered and controlled from the Broadcast Head-end. The Head-end is where you have all the broadcasters concentrating their contribution feeds before we send it out for distribution to the transmission stations.

There are also comprehensive systems for monitoring the various transmission sites to ensure they are constantly in optimum operating conditions. There is also a call center for receiving calls from broadcasters who might have issues, and/or require support for the optimization of their broadcast services, etc.

Is that something that can be replicated in other countries?

This is our general agenda at the moment. You can only build a broadcast platform, maintain, and improve per country. As a telecom company and creating a niche for ourselves, we always think about how we can provide services for mass consumer facing companies. So, that led us into the broadcasting. Now we are in many of the West African areas where we are actively participating in digital conferences, digital migration agendas, meetings, etc. But to send this message better, we have entered into a strong relationship with ECOWAS, which is the Economic Community of West African States. We want to provide digital radio and TV platforms for the ECOWAS community. We will provide one TV station and one radio station, which will actually be stationed in Liberia, and will transmit across the 15 ECOWAS member states. Once this is working and it is doing well, ECOWAS will use this to market their agenda, and we on the other hand will get the opportunity to assist individual countries improve their broadcast infrastructure, example migrate from analog to digital TV broadcast.

We call this “lighting up of the ECOWAS states” and this gives us the opportunity to provide all our other services including rural telephony, Internet access, etc., and replicate what we have done in Ghana in the other member countries.

What stage is this project currently in?

The stage we are at now is that we have met with ministers and cabinet members of various countries. Three key ones are closing up on this deal. A fortnight ago, we met with the ECOWAS parliament where we clearly demonstrated some of the advantages and values of the ECOWAS community having a TV station and a radio station. That went quite well. The next step is to sign contracts and deliver a solution. Before the end of the year, we should be actively involved in three countries providing the solution. We have developed what we call, “DTH now, DTT as you go”. DTH meaning direct to home TV now for any country that wants it and then digital terrestrial TV as you go along. The cost of implementing the digital terrestrial TV platform is quite expensive. And for developing countries or West African states, it is a challenge to raise huge sums of money. Our strategy is to leverage on what “digital dividend” provides per country. When you migrate from analog TV to digital TV, you get a spectrum available called a digital dividend. Most countries will sell this to mobile operators so they can provide better services. We migrate the country to a satellite digital platform that allows the analog TVs to migrate away from the spectrum onto digital satellite TV. The spectrum then becomes available for sale. When it is sold, the money is used to build DTT, digital terrestrial platform as you go. So, you raise the money, for example, 100 million dollars, from selling your spectrum. You want to spend 20 million on three key states and 80 million on other parts of the country that you need the money for, for example, infrastructure, health, agriculture, education, etc. Then, you look for the next bit of money and continue. If you have a country that has four, five, ten regions, you can do it slowly, but remember that everybody has TV instantly already so the terrestrial is only when you think it is very important, then you build it along. It is important to develop these technological platforms for developing countries like us in West Africa.

The people in these countries need a lot of varied services and it gives governments the opportunity to focus on the people and their needs. Essentially, health, agriculture, and education are key. One important thing that we have done in Ghana which we would like to replicate in other countries in West Africa is an educational programme, we have christened “One Classroom to Many”. Here we use our Satellite-based VSAT services to broadcast interactive educational instructions and lessons on behalf of a privately-owned company to various classrooms and schools in rural communities within Ghana. Rural residents have a big screen TV and audio systems in their classrooms for interactive sessions with the instructor based in the city. There is a press of a button to ask a question, and a teacher responds – all these happening onlline in real-time. It is very exciting and is making a lot of difference in rural based schools. One teacher in Accra can serve many rural communities. The teacher is teaching in Accra, and it is broadcasted to the whole of West Africa. Our satellite covers 22 countries, so all these countries can view this lesson, but for now it is tailored towards certain areas in Ghana because of the language barriers, etc. We would like to collaborate more with other companies so we can expand this service to other West African countries.

What are some of your CSR activities?

There are a lot of things we pride ourselves with as things we have done locally that work for the international community: broadcasting, Internet access, school education system, interconnect platforms, etc. Currently, in Ghana, the rural telephony platform is key for us because we built this platform eight years ago and it is still running. It has done a lot of good for the rural residents. For example, they are now able to sell their farm produce at more competitive prices, and can communicate among themselves better. Previously, they had to climb to grounds and mountains to be able to communicate on mobile phones – there is a documentary on YouTube on this called the Rural Telephony. Our social responsibility here is that the Internet access that we give to the rural area residents is free of charge. In rural telephony, you make calls through GSM. We connect these platforms to a GSM platform and the subscribers pay the operators a subscription fee or talk time credit, but the Internet access they use is free of charge. Internet access to the individual is what is going to close the digital gap.

What challenges do you face to develop all these points and to grow?

The challenges we face as a private entity trying to bring about technological advancement to our various countries is two-fold. One factor is an internal one and the other external.

Internally, the challenge a private entity like ours faces, is the availability of the right level of human resource to help drive the company’s developmental agenda. Externally, the challenge is with government.

For example, Ghana is developing very quickly in terms of connectivity. Every app that comes out today for use in any kind of business needs some level of connectivity. Big or small, connectivity is important. Operators who are active in that space today only focus on capital and sub capital and very little focus is given to rural. But, the next billion to be made is in the rural area. There are more people in the rural areas that need connectivity who are getting educated by our installation of these rural school programs. They are becoming hungrier for Internet access because they are now educated. Unfortunately, because there is no key infrastructure in these rural areas, the only way to serve these people today is by satellite. The Government regulator has placed a large license fee for VSAT operators. If the capital cities have fiber infrastructure and there is less infrastructure in the rural area, the only way to serve the rural folk is via satellite, using a VSAT Hub. Why would the governmental agency put a huge premium on these services, so we have to pay huge license fees for satellite services before we can deliver to the rural areas, who are already denied infrastructure and do not have as much finances to pay for Internet access? That is a key challenge to our development. We do not want to criticize the government, but if the government can hold some stakeholder meetings and have a clearer understanding of what the Internet can do for this country, especially for the rural areas, some of these unnecessary licenses can be waived off and we can provide much faster and better services to that sector of the economy.

Project yourself into the medium term, two to three years’ time, what is your vision? What would you like to have achieved by that time if your plans go well?

The focus is still on providing some kind of back end service for customer or consumer facing companies. We are back-end service providers and we are coming up with a new solution that will allow every rural person in West Africa to be able to be part of the digital inclusion agenda. E-commerce, for example, is revolutionizing life everywhere today using apps. We are looking at providing interactive connectivity by satellite at a very competitive, affordable cost, equivalent to and better than the mobile operators in every corner. Very soon, in any corner of West Africa, under the footprint of the 22 countries where we provide service, you can do a mobile commerce transaction with your media gateway -your decoder, your television, or phone- and connect to one of our platforms. Standard TV platforms receive only antennas, modified a little bit at a fraction of the cost to be able to provide interactive connectivity, enough to be able to do simple mobile money and mobile commerce transactions and simple information systems. It is a general app that we will roll out that will allow you to do a lot of things. In two years, we want to dominate the broadcast sector in West Africa and allow enhanced digital services on these platforms.

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