Satellite Communications Special: The sky's the limit
08 July 2013 | Guy Matthews
The satellite sector is reinventing itself, tapping into areas such as mobile backhaul and forging closer links with the terrestrial market. Has this ushered in a new era of collaboration with the carrier community?
The satellite industry is continuing to innovate in order to bind itself ever closer to the world of earthbound networks, working with carriers to help them to solve a range of challenges.
This innovation is as much commercial as it is technical. A new generation of space technology, and new approaches to the selling of satellite services, are changing both the raw capabilities and the pricing of satellite communications, opening up exciting new opportunities where satellite had previously not enjoyed a central role.
“The primary market for most satellite operators remains, for sure, the distribution of video content,” says Patrick French, senior analyst with satellite consultancy Northern Sky Research, and head of its Singapore office. “Satellite remains the best technology available for distributing video content from one point to many, beating other options hands down, including fibre, in terms of cost per household. And it’s not just households. A cruise ship can’t drag fibre behind it, or a plane.”
Satellite services have moved on to the point where they also now provide effective competition for DSL-based broadband, at least outside of the world’s urban centres. High Throughput Satellite (HTS) technology has become an accepted means of providing broadband internet access on a point-to-point basis in regions that are poorly or only partly served by terrestrial alternatives. In such areas, HTS-delivered services now compare well with DSL in terms of pricing and bandwidth. “In some market areas, satellite is even replacing terrestrial networks thanks to the declining cost of services,” points out analyst Robin Duke-Woolley, CEO of Beecham Research.
A complementary business
Satellite connectivity should not though be read as a straight threat to wired or unwired alternatives, even if its price point now more closely matches them. In reality it is much more likely to be complementary to or supportive of terrestrial networks. Take, for example, the backhauling of mobile traffic out of rural areas: “Nobody is predicting that satellite will ever be big in urban areas, but outside city centres it has growing uses, such as connecting cell towers in places where there’s no fibre or radio backhaul for example,” says French. Satellite has not always been the first backhaul choice for operators, he argues: “Satellite has to date been useful in certain areas for 2G-type services,” he explains. “But as the mobile world has got more data intensive, satellite has found itself challenged from a cost perspective. There have been moves to change that. O3b in particular is addressing the issue with its medium earth orbit technology.”
French confidently expects mobile backhaul of 3G and 4G services to be one of the key planks of O3B’s turnover when it launches services this coming autumn.O3b has just fired its first four satellites into space, and plans four more in September. All will be in operation by the last week of October, says Steve Collar, CEO of O3b: “We’ll wait until all eight are up before we launch services. We want to be global from day one.”
The USP of O3b’s medium earth orbit fleet is that it sits a lot closer to the earth than geostationary alternatives, and therefore can deliver with minimal latency to all points in a band around the Equator, taking in all the developing economies of Latin America, Africa, Asia-Pacific and Asia. “We’ll be addressing the needs of MNOs for whom satellite has to date been a solution of last resort, in terms of its price and performance,” says Collar. “It’s really just been used for 2G backhaul where no other solution exists. Now with MNOs moving more to a combination of voice and data, it’s time for the satellite industry to become more relevant. The task is to change the whole architecture of satellite, moving to what MNOs need and not expecting them to adapt.”
Collar points to evolutionary developments in mobile communications that help wed it closer to satellite in other ways: “Satellite is relevant to operators in the area of the passive and active sharing of infrastructure,” he believes. “We’re seeing many operators sharing radio access networks, particularly in regions like Asia and Latin America, as they look to take 3G and even 4G from metros out into semi urban and rural areas.”
Jamaica-based mobile operator Digicel, for example, has been looking to expand beyond its established heartland of the Caribbean and Central America, and in particular has been active in deploying services to some of the Pacific Ocean’s more remote communities.
Accessing niche markets
Satellite is the essential binding agent that knits these services together. Digicel has recently benefitted from an innovative partnership between O3b and its main investor, fellow satellite operator SES, allowing it to expand its mobile network services across Papua New Guinea. The solution when fully launched will uniquely combine the geostationary power of SES’s NSS-9 satellite with O3b’s low-cost, low-latency medium earth orbit fleet.
“When O3b comes online we’ll gain access to their IP trunking, and get significantly more bandwidth from that,” says Rory Kyte, head of international business at Digicel. “The Pacific is a massive piece of real estate. We’re dealing in distances between islands of three to four thousand miles in some cases, and putting fibre in there would cost hundreds of thousands of dollars. With satellite we can deliver either a broadcast service, or an extremely robust voice solution, and data too. There’s no reason why these islands should be left out of the digital age just because of an accident of geography.”
Another opportunity for Digicel is Myanmar, where is it currently applying for a licence: “A licence would be great for us there,” says Kyte. “But it’s rugged terrain, and satellite backhaul would help to make sense of the rapid deployment of connectivity there – for a time at least until alternatives are built out.”
Romain Bausch, CEO of SES, points out that they key innovation of Digicel’s Papua New Guinea service is that it is hybrid solution, one of a couple that SES has been involved with and an interesting sign of the openness of the satellite industry to new models: “The bundled solution will combine our geostationary capacity in the C-band and O3b’s medium earth orbit capacity – once that’s launched,” he says. The value that O3b delivers to the bundle is not only the low cost of its service but its low latency too: “With medium earth satellites, you can constantly redirect coverage to where it is needed, as terrestrial developments take place below,” enthuses Bausch.
A new era of satellite innovation
Other satellite operators have been innovating in different ways. Inmarsat’s Global Xpress network offers a high bandwidth capability with a global footprint thanks to terminals that are much smaller and lighter than traditional ones. Intelsat has new satellites that reuse frequency to create high throughput. Iridium has invested in new chipsets and reduced its costs that way. SES, not satisfied with having gestated O3b, has developed its own SAT-IP, a technology where satellite-delivered content is converted into IP at the point of reception, and has also launched its Ultra HD Experience, showing that it is able to address more than just linear broadcast needs. Another operator Orbcomm has launched new low earth orbit satellites that provide connectivity for asset tracking applications. Since launching its OG2 satellites, it has increased coverage and lowered costs. “Orbcomm has also innovated commercially by investing in the service management side, so that they now own the routes to market for some applications,” points out Beecham Research’s Duke-Woolley. “This has been a good move for them – moving from pure connectivity up the stack to services.”
It is not just satellite operators adapting their own technology and business models to bond themselves to the carrier community. Carriers too are reassessing their relationship with satellite, perhaps none more thanTelefónica. The Spanish incumbent has cut a deal with satellite provider Eutelsat Communications which allows it to provide satellite broadband services to other carriers across Europe. Through Eutelsat’s KA-SAT service, Telefónica is able to offer a range of high speed internet solutions that it says are competitively priced. It expects the principle application to be in areas that are not within reach of terrestrial broadband networks, including rural locations and urban belts, either acting to fill in gaps or deliver a backup solution. “Our network goes over the Ka band for reasons of economy,” says Antonio Guerra, director of the Satellite Services business unit of Telefónica Global Solutions. “We now have 50% of our VSAT sites on Ka. It’s a good strategy for us to get agreements with satellite operators to provide Ka band services. We can control the quality of connectivity for our customers. As a carrier, we provide a lot of services – voice, capacity, IP interconnect – and the only technology that makes this global for us is satellite.”
Duke-Woolley believes that the recent flurry of satellite innovation is not before time, and would like to see the ground breaking spirit extend into new areas: “Part of the problem with satellite is that there are no common standards,” he says. “Each terminal is different. We’ve worked to promote software defined technology that interoperates, but I’m not sure whether that’s what satellite operators actually want.”
SES’s Bausch believes there is an appetite for further change, and the particular type of change he wants to see a lot more of is collaboration across the satellite sector. “We are behind moves to help unite the satellite industry, playing a part in the European Satellite Operators Association and the SIA in the US,” he explains. “As a sector we must promote satellite to other players in the communications industry. We must unite in our approach. We must protect the interests of satellite too in the area of spectrum to make sure that satellite-only channels are not made available to mobile operators. We must show what satellite bring to the table to solve common challenges.”