Pan-African wholesale carrier Liquid Telecom has built a satellite hub in South Africa that will enable the company to route African traffic within Africa rather than backhauling it via Europe.

According to the company, the move represents a multimillion-dollar investment in its satellite business. By keeping African data in Africa, the company believes it has reduced latency and increased connectivity for its customers.

"The expansion of its pan-African satellite business will complement our fibre network, enabling us to provide high-speed, cost-effective broadband services to more Africa's remote areas where it is commercially impractical and unviable to lay fibre cables," said CEO Nic Rudnick said.

Fiber and satellite connectivity will enable the company to meet the ever-growing demand for connectivity across Africa.

Liquid Telecom has built Africa's largest single fiber network, which spans more than 17,000 km from Uganda in East Africa to Cape Town in Southern Africa.

In Zambia alone the company plans to spend more than $15 million on massive deployment of fiber across railway lines in order to improve communication in the southern African country.

Liquid Telecom's fibre and satellite networks provide a variety of wholesale broadband services including Multiprotocol Label Switching (MPLS) and Virtual Private Network (VPN) systems to cellular, wireless and fixed line providers, ISPs and financial institutions in eastern, central and southern Africa, according to the company.

Several telecom operators in Africa have been laying fiber, mostly in urban areas, but have been very slow and in many cases refuse to expand to rural areas, claiming it would take years for them to recoup their investment.

However, with the coming of many satellite companies in the region, it is expected that operators would expand their businesses to rural areas at a minimal cost.

The coming of Liquid Telecom into the African satellite business is expected to trigger competition in the provision of satellite broadband services in the region, which may help bring down the cost of broadband services by operators.

Gateway Communications also provides satellite connectivity in Africa. The company has over the past few years been solidifying its satellite communication business, taking advantage of outages of land-based networks in the region.

The company has already signed agreements with several telecom operators and ISPs in the region to provide satellite communication. Gateway operates in 40 African countries and has an ambitious plan of building MPLS that will cover every city.

"We need as many companies providing satellite business because competition will help bring down the cost of communication in the continent. It will also help many service providers to widen their businesses to rural areas," said Andrew Makanya, managing director of Internet Solution Zambia.

Undersea cables servicing the region have greatly helped to bring down the high cost of communications in Africa. But often, there are reports of cable cuts that disrupt Internet services in the region for days and sometimes weeks. Companies providing satellite communication services are hoping to be useful in preventing Internet disruption in the region.