Raising the VSAT Opportunity

These days tremendous buzz surrounds the satellite industry. I’m not talking just about all of global billionaires looking to launch “micro satellites” in the coming years. Excitement exists in the traditional satellite market as well, with opportunity abundant for those that step forward as leaders.

Market demand is high, next generation satellites are being launched and the talk of satellite going mainstream is as hot as ever. Let’s examine each of these further.

Crunching the Numbers

The demand for connectivity has reached unprecedented new levels. By 2020 it is projected that nearly 4 billion people will be connected to the Internet, according to Cisco. With this influx of users comes three times the global IP traffic than what we have today. That translates to a growth rate in IP traffic of 21%.

Add to this the projected 20 billion devices and 50 billion machines communicating via IP by 2020 and you realize that there is a need to redefine how communication networks are designed and what they need to deliver.

In fact, enterprise markets are already gearing up for acceleration in demand. Here are some eye-opening projections to consider:

• By 2023 NSR expects that 33% of the 49,855 VSAT-connected vessels at sea will be on HTS.
• Over the next ten years, we will see an increase in the number of aircraft connected from just over 3,000 aircraft to more than 13,000, says Euroconsult.
• Ericsson is projecting an additional 2.4 billion mobile subscribers by 2019, many of which will come from emerging markets.
• Military VSAT services worldwide will reach $10 billion by 2021, says NSR
• By 2023 10% of connected O&G sites will be for exploration and production, (12% of those sites will utilize HTS capacity), generating 50% of retail revenue and using 77% of bandwidth in the market, says NSR.

Launch Time: HTS

With the launch of Inmarsat’s first Global Xpress in 2014 we moved closer to the reality of several high throughput satellite (HTS) programs focused on serving these enterprise markets. Looking to the year ahead, this trend will continue with the anticipation that satellite launches will quicken, led by major programs like Intelsat EPIC.

What this signals is a new era for the satellite industry. The focus now centers on preparing enterprise markets for the impact that comes with HTS; most notably how we design networks, offer services and manage operations.

First and foremost comes the impact of frequency. The Ku Band vs Ka Band debate is one that has been of particular interest to me over the past year. Following many discussions with key stakeholders, here is how I see it playing out:

• New entrants without access to Ku spectrum will more than likely look to Ka.
• Incumbent satellite operators with vested interest in Ku will likely stick with spectrum they already have.

Next comes the topic of business model. Satellite operators are focusing not just on space, but also on ground infrastructure. This is due to the fact that satellite operators will no longer be able to depend on service providers to build their own infrastructure. With such a focus service providers will be able to cost effectively access HTS via a managed service model and could signal a change for satellite operators to sell in Mbps rather than MHz.

The Move Towards Mainstream

In all, the end goal is to move satellite closer to becoming a mainstream technology.
As technologies converge voice, data and video onto one platform they must support any application, reach any geography, and deliver unified global service plans. That requires the use of satellite.

Kevin Steen, iDirect’s COO, says it best that, “The only way forward is a future where every access technology works in unison. And we believe that satellite has an important role to play. It offers not only the global reach and the ability to meet real time demand, but also provides very unique and specialized services—not to mention the resiliency—that is necessary to help achieve global IP connectivity.”

The goal is to achieve broader relevance of satellite. That means the creation of revenue opportunity for partners and ensuring they are in the best position to deliver the high value services in demand across the market.

Amid all the market excitement, perhaps the idea of raising the opportunity for VSAT is the most exciting trend of all.

By Denis Sutherland, Director of Business Development, iDirect