providing various local services including mobile banking. Solar panels power both the satellite equipment as well as th
ENABLING DIGITAL FINANCIAL INCLUSION THROUGH SATELLITE COMMUNICATION Access to financial, banking and money transfer services is a prerequisite for economic growth, in particular, in emerging economies. In many countries, the lack of reliable and affordable telecommunications prevents the ubiquitous roll out of financial outlets. In such remote areas, satellite communications are providing affordable, high quality solutions to enable money transfer and connect bank agencies and ATMs. These services help transform the socioeconomic lives of citizens through financial literacy and access.
Case Studies Cameroon In Cameroon, Express Union has established 220 outlets across the country connected by satcoms to offer money transfers from companies like MoneyGram and Western Union. By doing so, they avoid costly in-country transfer fees and allow families to receive funds from family members based overseas conveniently and at minimal cost.
Mexico Telecomm Telégrafos connected more than 2,173 people with their “Pagos Móviles” project. They could do P2P mobile payments, transfers via SMS, local calls, local SMSs and balance inquiries. The project proved the technical viability of mobile transactions via satellite.
West Africa Société Générale connects its remote agencies and ATMs to its Headquarters and to the Internet backbone via satellite. This is key to providing equal access to all citizens across the continent, allowing them to check and clear transactions without needing to travel hundreds of miles to a city centre.
Kenya Equity Bank Group delivers financial services to 200 sites across the country via satellite. Local agents use portable terminals to also offer other data based services, which increases business opportunities for them and for the wider community. Each satellite terminal comes with smart devices preloaded with information on banking and finance subjects, addressing local knowledge gaps and helping to drive economic growth.
Indonesia
In Indonesia Bank Rakyat Indonesia launched its own satellite in 2016 to overcome connectivity problems across the Indonesian islands, adding 10 million customers who had no access to banking services.
Democratic Republic of Congo In the Democratic Republic of Congo 800 cell towers are connected via satellite providing various local services including mobile banking. Solar panels power both the satellite equipment as well as the mobile base tower.
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ENABLING DIGITAL FINANCIAL INCLUSION THROUGH SATELLITE COMMUNICATIONS A Secure Solution Systems providing financial transactions must be cyber-secure and robust. The point-to-multipoint architecture of satellite means that satellite networks have orders of magnitude fewer points of entry than terrestrial networks. When connecting remote communities, satellite links often bypass terrestrial communications networks altogether. Newer satellites, developments in ground technologies, encryption and the fact that you need a physical antenna to send and receive a satellite signal all mean that hacking satellite signals is not at all easy to do.
Regulatory Barriers to Financial Inclusion Significant regulatory barriers impede or block satellite service providers being offering financial services because satellite communications are often treated differently to other telecommunications technologies.
Lack of a blanket license policy: Favorable regulatory regimes apply a ‘blanket license policy’ i.e. they grant the service provider a service license for terminals subject to a cost-based administrative fee, independent of the number of satellite dishes deployed. Other countries often unreasonably increase the annual license fee and/or limit the number of licenses to no more than a handful. Some countries have no blanket license policy at all and charge a fee per dish installed.
Consequences: Parallel black market for sub-licenses, lack of competition and high costs for users.
No large-scale deployment of satellite services, lost opportunity to transform lives of maximum of citizens.
Disproportionate import duties: On top of ISP licenses and equipment licenses, many countries also apply very high import duties on satellite equipment. Normally telecommunications equipment carries an import duty of around 10 to 15% of the equipment cost while often import duties on satellite equipment can be between 30 to 35% of the cost of the equipment and the cost of transport. Some countries even charge more than 50% of the value of goods and the cost of transport.
Consequences: Massive cost barrier to deployment of satellite services, no large-scale deployment, lost opportunity to transform lives of maximum of citizens.
No satellite services: Some countries do not allow any satellite service provision at all unless provided through the national state-owned telecommunications operator. The national operator can often be conservative, slow to embrace new satellite technologies and holding a monopoly which allows them to charge high prices.
Consequences:⇨ Limited or no penetration of satellite services, lack of competition and innovation, high costs for users, lost opportunity to transform lives of maximum of citizens.
While importance of digital communications in modern-day society cannot be over-stated, much of the world remains confronted with the harsh reality of no communications coverage at all. Satellites extend the reach of terrestrial networks to overcome this reality. Regulators, especially those in emerging economies, are advised to adopt favourable regulatory regimes that foster the growth of satellite services for the socio-economic transformation of their countries: ➔ A competitive market enabling local price competition and innovation ➔ A blanket licensing regime independent of the number of satellite terminals deployed ➔ Cost-based license fees to encourage uptake and deployment of satellite services ➔ Non-discriminatory and proportionate import duties on satcoms equipment.
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