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Google, Liberty back Africa connect

September 9, 2008

Google has thrown its weight behind ambitious plans to bring internet access to 3bn people in Africa and other emerging markets by launching at least Google has joined forces with Liberty and HSBC bank to set up O3b Networks, named after the "other 3bn" people for whom fast fibre internet access networks are not likely to be commercially viable.

They have announced an order for 16 low-earth orbit satellites from Thales Alenia Space, the French aerospace group, as the first stage in a $750m project to connect mobile masts in a swath of countries within 45 degrees of the equator to fast broadband networks.

Larry Alder, product manager in Google's alternative access group, said the project could bring the cost of bandwidth in such markets down by 95 per cent. "This really fits into Google's mission [to extend internet use] around the developing world," he said.

The partners have so far injected about $20m each to raise $65m, including a smaller contribution from Allen & Company, the media advisory boutique.

Richard Cole, head of HSBC's private equity group, which has already funded fixed-line communications projects in some emerging markets, said the bank would lead the search for further finance in the next two years – about 70 per cent of which will come from the debt markets.

Mike Fries, chief executive of Liberty Global, said the three partners reserved the right to contribute further towards the extra $150m-$180m in equity financing required, but could bring in other backers.

Greg Wyler, the technology entrepreneur who founded O3b Networks, said its satellites would be operational by the end of 2010. Wireless spectrum required for the service had been secured through the International Telecommunication Union.

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