|Asia-Pacific II 2001
|Satellites – The Growing Demand and Reach
Satellite communication is the key to Internet penetration throughout the Asia-Pacific region. Satellites facilitate rapid global connections and can be quickly adapted for a variety of needs. Satellite are faster to install and reach places where landlines are not feasible. They reach areas where fibre optics are either not in place or not feasible. Satellites provide point-to-multipoint broadcasting and can handle Internet, broadcast, telephony and corporate network traffic at the same time.
When recent failures of a major cable between Shanghai and the U.S. West Coast cut off millions of Internet users in China, satellite links were set up to restore service and people were able to log back on within 48 hours. At first blush, these incidents appear simply to show how satellites can be called on to restore service while traditional landlines are repaired. However, they actually reveal a lot more about the advantages of satellite communications. Satellites have the flexibility to be quickly adapted to fill a variety of needs. They can be operational in much less time than it takes to install landlines. Satellites can reach areas where fibre optics are either not in place or not feasible. Their point-to-multipoint cap-abilities are unique; they can handle Internet, broadcast, telephony and corporate network traffic at the same time. One could make a good case for arguing that satellite communications is the key to region-wide penetration of the Internet in the Asia-Pacific, especially with the emergence of broadband, because satellites connect people virtually any-where in the world, and do it quickly. Internet use in the Asia-Pacific increased by 300 per cent in 1999. In September of 2000, there were about 90 million users. As of February of 2001, the number had reached nearly 105 million and the Nua Internet Surveys predicts that will climb to 190 million-nearly 25 per cent of users worldwide-by 2005. Satellites are an attractive method of meeting growing Internet backbone needs there, because of the way satellite configurations can be easily modified to meet ever-changing traffic requirements. Analysts project that the demand for Internet services throughout Asia-Pacific will reach the point where the number of satellites launched will have to triple over the next decade to keep up with the demand. Another significant reason why satellites are attracting more attention in the region is their reach. As in most other parts of the world, Internet use is concentrated in the more densely populated areas. Outside of these areas, parts of the region are very mountainous, and other parts consist primarily of islands. Neither situation is conducive to fibre optics. For example, laying cable to provide service from Japan to Australia could be financially prohibitive considering that satellites possess global beams that can be quickly positioned to cover as many islands as is necessary. Projects of this nature show the difficulties inherent in providing service to the region, which can be demonstrated through the status of Internet use in China and India. China Overview China is a region which has embraced the Internet as a vehicle for profit and economic development faster than any region in the world, and satellite systems will be a key element in the roll-out of managed last-mile access services. In 1999 the Yankee Group, a U.S. market research firm, said usage there is expected to surpass the United States by 2005 to become the largest Internet market in the world. The firm said the overall potential commercial Internet market there is considered to be between 250 million and 350 million users. However, at this point, Internet development in China is still in the early stages. According to a China ISP (Internet Service Provider) market profile by Intelsat, the distribution of Internet accounts varies greatly by geographic location and socioeconomic group. Except for a small population of academics and researchers, the main users of the Internet tend to be young people in urban areas. For instance, the Beijing area accounts for 20 per cent of all Internet users in China, yet there are nine provinces and territories which together account for less than one per cent of the country’s users. Factors that have restricted growth of the Internet there include high usage fees and call charges, slow access speeds, no access in certain areas and poor service quality. Another key factor, particularly in the Internet via satellite marketplace, is a shortage of satellite capacity providing direct connections to the United States. India Overview As with China, India is in the early phases of communications development and the Internet is the fastest growing medium. With 4.5 million users, the market is relatively small, but growth potential is expected to be in excess of 10 million by 2005. The rapid growth is attributed to increasing demand for services, positive government initiatives for expansion, high growth in PC sales and the globalisation of business, which requires the presence of the Internet. But even with skyrocketing growth, the Internet reaches fewer than 100 of the 5,000 cities in the country, and 85 per cent of users live in urban centres where adjacent rural areas are virtually disconnected from the Web. Poor infrastructure, low PC penetration, the need for large initial investments and an extended period without profits have been blamed for delays in the establishment of ISP start-ups. Other impediments to service include: o Low teledensity, o Slow broadband development, considered crucial to generating an information-based economy, and o Significant portions of the 30 million to 40 million homes with cable use ‘innovative’ connections-nearly all of which consists of one-way access. Emerging technologies are providing new opportunities for ISPs, with the main access routes to be cable, xDSL and wireless local loop. The government is in the final stage of constructing the national Internet backbone, which is made up of a network of about 550 Internet nodes-one in each of the government’s district offices throughout India. These nodes provide service to local subscribers and act as international interconnection points for Internet services. Instant Access from Anywhere to Anywhere As with many countries in the Asia-Pacific, China and India are just starting to develop the kinds of Internet connectivity that will make the region a 21st century leader when it comes to communications technology and market demand. No one industry segment will contain all of the resources necessary to fulfill needs of this magnitude, so there is likely to be a place for virtually all segments of the communications industry, especially as the technologies converge to provide end-to-end solutions. The speed and flexibility of satellites are likely to make them a highly sought platform. Estimates suggest that the industry will command at least 20 per cent of the market in China alone, and continue to dominate in areas where terrestrial capabilities are limited or nonexistent. Because of the relatively short time required for establishing satellite connections, satellite implementation of ISP access is a particularly efficient means of introducing service into underserved and unserved markets. Access services generally involve two categories of customers: medium-to-large ISPs and small ISPs. Members of the larger group usually are regional and national ISPs with large connectivity requirements. The smaller operations usually serve local ISPs with smaller traffic requirements. Both groups are essential to ensuring seamless connectivity on a regional, worldwide, urban and rural basis. Satellite service providers use a variety of services to accomplish this goal. Satellites provide major carriers with backbone access to ISPs and corporate customers on every continent. Scalable connections at speeds of up to 155 Mbps are available at competitive prices. Internet trunking by satellite service providers can link ISPs to the World Wide Web quickly and affordably, allowing them to transmit directly from earth stations or local telecommunications companies. Satellite service providers can also help customers establish Direct-to-Home (DTH) services using DVB/IP to connect them to their regions ranging from a large metropolitan area to a group of tropical islands. Smaller ISPs can use satellites to expand their reach by giving them affordable access to new markets and the strategic benefit of connecting to upstream providers. One of the more popular services that address customer needs is multicasting. This service facilitates point-to-multipoint applications such as Web caching, UseNet Newsgroups, digital audio/video multicasting and real time database updates. It builds on the natural broadcast capability of satellite and the addressability provided by protocols being developed for Internet application to support dissemination of information to specific groups of users within a geographic area. Another emerging service is the use of satellites to supplement VSAT (Very Small Aperture Terminal) networks. VSATs offer high-speed and rapidly deployable networking solutions for Internet as well as data, voice and multimedia, primarily using IP and Frame Relay. VSAT applications include corporate networks with WAN and LAN interconnections, video-conferencing, multicasting, tele-education and tele-medicine. The systems can also meet the burgeoning demand for Internet backbone access. The Broadband Wave Clearly, the next big push in the telecommunications industry from an overall standpoint is broadband. As the latest high-speed Internet technology, it can deliver access at speeds hundreds of times faster than dial-up modems. Satellite Internet technology in this arena works much the same as Digital Subscriber Lines (DSL), with the notable exception that Internet connections are established using satellite dishes instead of telephone lines, which enables everyone- regardless of their distance from the telephone company-to have high-speed digital Internet access. Some have taken to calling broadband the ‘Windows operating system of telecommunications,’ because it has the potential to virtually redefine the entire industry. In time, there will be applications that can manage the flow of information and do it in a dynamic way, such as enabling the transmission of broadcast quality video over the Internet to millions of users at one time. Satellites hold an advantage in this respect because it is much easier to push true broad-casting via the sky as opposed to terrestrial networks. And as satellites become more powerful, operators will be able to use them to cover increasingly larger areas while reducing the size of ground equipment, such as terminals and dishes. Satellites also have the ability to deliver content to the edge of the network, thus avoiding terrestrial broad-band congestion that causes delays. Satellites match the idea of the Internet in a way that gives them the advantage in the long term. Satellites are global and access is nondiscriminatory. Customers can buy a dish instead of waiting for the telephone or cable company to build out to their location. Satellites also have the advantage of allowing for more Internet content, creating potential for a more global network than currently exists with all of the U.S. sites dominating the Web. One of the best examples of the emergence of satellite technology is the growing use of satellites by ISPs outside of the United States. These ISPs use satellite links to bypass the multiple router hops and overseas fibre bottle-necks that normally would obstruct data communications. Another fast-growing market segment is local loop bypass, where corporate and consumer end users utilise satellites to bypass the congestion of the public telephone network. In terms of technology expenditures alone, broadband satellite represents a major growth avenue for the inter-national satellite communications industry. From an overall standpoint, space technology has turned out to be the segment that has had the greatest impact on modern society. It is a multibillion-dollar industry in which providers are moving beyond simply offering capacity in space. They are working to develop the value-added, end-to-end solutions and services that focus on quality and speed. And the best providers are creating these developments by first finding out what their customers need in urban areas, as well as in the most remote corners of the earth.