Expert View

June 9, 2005
Satellite broadband can provide last mile in absence of local loop

UNITED KINGDOM -- Europe*Star is a satellite owner-operator, offering capacity on its geostationary communications satellites. The company leases whole and fractional transponders on a full-time and occasional use basis, for use with a broad range of satellite communications services including television, Internet, telephony and corporate networking. Brought into service at the start of 2001, the innovative Europe*Star 1 satellite has five high performance beams covering Europe, Southern Africa, the Middle East, the Indian subcontinent and South East Asia.

Convergence*Plus met Jonathan Barter, director, business development, Europe*Star, to discuss how the advancement and standardization in the satellite transmission technology is creating opportunities for the delivery of IP-based services. Excerpts from the interview.

Convergence Plus: Is the satellite launch market getting too crowded? How should this be tackled?

Jonathan Barter: Some would argue this applies to the satellite industry in general, not just to launch systems. If anything, the launch sector is probably less crowded than other sectors, having a limited number of credible players. Many aspects of the industry reflect the long lead-times involved and the lifetime of payloads, and consequently it's easy to get out of step with demand driven by our customers' volatile markets. Programmes for communications satellites and launch systems take years or even decades to be put into place, and once a satellite is launched, the commitment is made. On the other hand, demand can be dramatically affected by terrestrial competition and the whims of governments, and rise or fall almost overnight. However, the variability in demand for communications satellites and associated launches is, to some extent, smoothed out by space exploration, meteorological, earth imaging and military requirements, which run on different cycles.

Launch service companies, who have to genuinely shoulder responsibility for their balance sheets, will inherently try to adjust their businesses to cope with competitors. Other launch providers that rely on the government subsidies can rely on strategic national priorities, as much influenced by politics as by the marketplace for launches. Regardless of whether private or public involvement, almost all countries with launch capabilities have a single presence, which they wish to protect. Consequently, the question of how this should be tackled becomes almost irrelevant, and intervention is therefore likely to be either unnecessary or unwelcome.

CP: How has the advancement and standardisation of satellite transmission technology created new opportunities for the delivery of IP-based services?

JB: The adoption of the DVB standard for the transmission of IP lowered the price of receive-only terminals for some one-way IP services. A similar effect followed for two-way services due to DVB/RCS, with some very competitively priced terminals available in the marketplace. Against this, it has to be recognised that a standard-based approach does not result in efficient utilisation of the space segment or offer the highest performance, and the capital expenditure for the central hub makes DVB/RCS more appropriate for larger networks. Given the wide differences in scale of individual satellite networks, this leaves room for standards-based platforms and for others, and some of the fastest growing VSAT companies focus exclusively on semi-proprietary products. What is also apparent is a greater awareness of IP in satellite system designs, with developers incorporating features from terrestrial communications such as routing, caching and network management. The advantages that result are applicable to standards-based and proprietary designs. Turbo coding is becoming commonplace, and one reason is increased use of IP for voice traffic.

CP: Are enterprise satellite providers offering services and applications that hold true value?

JB: One has to consider the reasons enterprises use communications satellites. A lot of satellite traffic splits into two camps - one in which satellite is clearly the best solution, and the other in which satellite is the only solution. In the right circumstances even a simple low-speed point-to-point satellite circuit may be the only option available to an enterprise. Consequently, the value proposition only applies between competing satellite providers.

In the middle ground are services for which there may be terrestrial competition but subject to limitations or other factors that allow satellite to be a viable alternative. In such cases, satellite providers can certainly have problems establishing value to skeptical enterprises, as few of these satellite services can avoid looking expensive at first glance. The value of specialist satellite service providers is their investment in skills and resources required to deliver satellite services that work reliably and on-time, but it's not always understood by those outside the industry. However, astute satellite service providers are capable of recognising which ones are worth chasing.

CP: What are the issues that need to be addressed to make this happen?

JB: Much of the planet is deprived of the benefits from satellite services because of the actions of some regulators and incumbent telcos. These regions need to open up to the positive side of satellite services, even if they cross national boundaries and allow the entry of new players. The nature of some of these satellite services will probably always be niche or as a fill-gap, but the needs of customers without other service options should not be overlooked. Transparent and less restrictive regulations and access to markets that are more open would be helpful.

CP: What are the prospects for satellite broadband?

JB: Continued growth can be seen for broadband Internet via satellite, provided that the threats from less-expensive terrestrial alternatives are always recognised. Providers of satellite broadband services need to react or even predict the gaps that open and close opportunities for such services. The roll-out of terrestrial broadband programmes in many countries has been artificial -- falling behind or speeding ahead of natural growth rates as a result of government policies and whether incumbent telcos see broadband as an opportunity or a threat. In situations where the local telco is reluctant or unable to roll-out ADSL or other terrestrial broadband infrastructure, it creates a market potential that others could satisfy.

CP: How can satellite broadband Internet become a weapon for bridging the digital divide?

JB: The expression 'digital divide' is recognition of a problem that could be around for some time, and is a classic example of where satellite could quickly provide high-speed Internet access. Cases where satellite is only a stopgap need not inhibit a service provider as the same satellite beam allows the customer base to shift within a region as demand changes, and the declining price of terminals removes another issue. Another advantage of satellite broadband is that it can easily fill two gaps, providing a backbone function without long distance fiber and providing the last mile in the absence of local loop.

Contact:
Europe*Star Ltd
Tel: +44 (0)20 8756 4626
irina.petrov@europestar.co.uk
www.europestar.com