 | Issue: | Asia-Pacific I 2003 |
| Article no.: | 7 | |
| Topic: | Small Business Friendly Satellite Broadband | |
| Author: | Conny L. Kullman | |
| Title: | Chief Executive Officer | |
| Organisation: | Intelsat, Ltd | |
| PDF size: | 104KB |
About author
Mr Conny Kullman has occupied the position of CEO for Intelsat since 1998. He spent the last four years leading the organisation through the most dynamic period in its 38-year history. In July 2001, Mr Kullman spearheaded Intelsat’s successful transformation from an international co-operative to a fully commercial, private company. This process has placed him in a prominent position that enables him to share his ideas about meeting the demands of and introducing new technologies and strategies in an increasingly competitive satellite environment. Since joining Intelsat in 1983, Mr Kullman has held leadership roles in virtually every major functional area of the company. As VP and Chief Information Officer, he initiated a major upgrade of Intelsat’s spacecraft control and launch facility, allowing the company to monitor and control 25 satellites with only three staff on shift. Before becoming CEO, he was VP of Operations and Engineering with responsibility for all major investment programmes and Intelsat’s industry leading operational excellence – he delivered system availability consistently above 99.995 per cent. Since becoming CEO, Mr Kullman and his team have focused on building an Intelsat that leverages its reach into over 200 countries around the world—offering expanded services and entering new markets—while maintaining an industry-leading financial profile. Prior to joining Intelsat, Mr Kullman was a Senior System Design Engineer at SAAB Space AB in Sweden. He received a Master of Science degree in Electronic Engineering from Chalmers University of Technology, Gothenburg. Mr Kullman is a member of the Washington Space Business Roundtable, the Society of Satellite Professionals, and the International Academy of Astronautics.
Article abstract
Broadband access is one of the keystones of the knowledge economy. The industry’s initial focus on building broadband capacity has shifted toward a more customer-centric strategy and SMEs and SOHO (residential) customers are increasingly seen as comprising an important market sector for satellite via broadband. The emphasis is on building flexible solutions to meet a variety of connectivity requirements – including attractively priced broadband–based services for SMEs that give them facilities that were previously available only to larger companies.
Full Article
One of the keys to generating demand for broadband via satellite is in making it accessible and user friendly for small businesses. In some circles, broadband has been called the infrastructure of the knowledge economy. In many countries, it is viewed as being crucial to achieving social and economic goals – a panacea for numerous societal pitfalls and a vehicle for revitalising demand in the telecommunications industry. Unfortunately, this technological saviour has not materialised nearly as quickly as most of us would like. The disappointment in the satellite industry has been particularly acute, due in large measure to the downturn in the telecom sector. However, there are signs of a recovery on the horizon. Costs have been trimmed, new business models are more conservative and growth opportunities are being created through the development of hybrid solutions that marry the advantages of satellites and other connectivity options. In the absence of a killer application to take care of this process, the alternative is to develop sets of common solutions that can be tailored to meet a variety of connectivity requirements. Initially, most of the attention on broadband was focused on building high-performance networks at the enterprise level. One of the more positive elements of the current financial climate is that it has forced operators to look at developing portfolios of flexible solutions and services. Hopefully, it will lead to the emergence of increased efforts to make solutions available that deliver broadband services at prices that are attractive in smaller target markets, particularly Small and Medium Enterprises (SMEs) and the Small Office/Home Office (SOHO) segments. For these businesses, broadband creates advantages that previously were available only to larger companies. It gives them access to high-speed communications and the ability to do business on a global scale while bringing flexibility to the workplace through telecommuting and remote network access at much higher speeds. Economies that have been successful in introducing broadband generally have been able to weave the technology into their cultures. Such is the case with teenagers in Seoul, Korea and other parts of the Asia-Pacific Region who frequent cybercafes to chat with friends via video. “The disappointment in the satellite industry has been particularly acute, due in large measure to the downturn in the telecom sector.” Uncertainty Still Reigns Of course, the continuing economic uncertainty throughout much of the Asia-Pacific, the downturn in the US and the war in Iraq have combined to curtail demand in Asia, potentially one of the world’s most dynamic telecoms markets. Even so, expansion continues in key markets such as China and India and some experts are predicting that negative economic and political trends will stabilise toward the end of 2003. If that proves to be the case, the pace of broadband development in the region may pick up, because ISPs in need of backbone connections and business and residential customers looking for more robust last-mile access could turn to satellites for quick, competitively priced solutions. The challenge for satellite operators targeting SMEs and SOHOs is to find and aggressively implement winning approaches for identifying and responding to these impending service demands. In many cases, the first stage of development involves providing clients with access to a reasonable-speed pipe to the Internet, an ISP or data centre. The next step is to build out solutions that will drive the access businesses to develop applications that are well suited to satellite delivery and that meet their business requirements. Many of the more common applications talked about today tend to be more platform-driven types of tools, including Voice Over Internet Protocol (VOIP) and Virtual Private Networks (VPNs) that serve corporate networking requirements. There also are a host of other standard applications that generally come with broadband access, such as Web hosting and email. Another satellite platform type of solution that has significant potential in this market segment is multicasting, which has the capability to stream video and data content to multiple sites more cost-effectively and more efficiently than terrestrial options. In these instances, broadband is more of a lower level platform, or physical layer. The next layer includes the end customer solutions. In order to get to this level, the physical layer must be in place. Under the current structure, satellite operators are working to offer complete solutions that will allow service providers to expand their existing end user capabilities, thereby creating additional competitive advantages for customers. To this end, some satellite companies are pursuing partnerships, new technologies and other methods of bundling business solutions with access to increase the value of their offerings to entities such as SMEs and SOHOs. The business proposition is much greater with this kind of an approach, but right now many customers and some satellite providers as well are focusing on the first step. They want to get the physical layer in place before moving on to the next phase. An Alternative Approach There are clients who have chosen to leap frog traditional terrestrial connectivity in favour of a complete satellite or hybrid space and ground solution, particularly in developing markets where a siseable investment would be required for terrestrial deployment. With this strategy, they are able to get their services up and running in much less time than they would with a terrestrial build out. In addition, having the complete solution gives them the flexibility to quickly and easily introduce new services based on market demand. An added benefit is that, as the region becomes more developed and terrestrial infrastructure becomes more common, the satellite-based services can be used to extend a customer’s reach to even more remote areas – to the next connectivity frontier. A key to making broadband more available to SMEs and SOHOs is finding local service providers who understand the market, the customer base and the economy, and then delivering targeted solutions that make financial sense to both the provider and their customers. One particular broadband installation in Colombia, illustrates the value of a close relationship between satellite operator, local service provider and end user. Ladiprint, a small graphic arts company in Bogota, was using a dial-up service operating at speeds between 28 Kbps and 56 Kbps to conduct business. The service was not sufficient for all of its needs and employees went to an Internet café to download large files and graphic materials to be processed at the shop. The company’s approximately 100 employees had access to 12 PCs. Ladiprint did have a portal that allowed customers to place orders and check on their status, but it lacked the benefits of having always on, rapid and effective connectivity. Ladiprint contacted several terrestrial companies about installing a direct line, but the cost was prohibitive and the installation projections ranged from six to eight months. Now, following a three-month trial using the Intelsat Broadband Service, Ladiprint conducts business via broadband, through local service provider Axesat, SA. As a result, employees have access to high-speed Internet connectivity and e-mail. Axesat later made compelling business cases to Ladiprint for Web design, Web hosting and data warehousing, and all three value-added services are now in use. “Intelsat has provided us with the full solution, service and support which allows us to distribute this innovative service to our customers,” said Jorge Eduardo Gomes, owner of Axesat and President of Informatica Datapoint de Colombia Ltda. “The companies who participated in the trial learned the value that quick, reliable access to the Internet can bring to their businesses.” The success of these kinds of installations points to another less tangible possible result of targeting SMEs and SOHOs – the residential customer. In reviewing potential broadband via satellite markets two or three years ago, the residential sector was not considered to be a viable target. This dynamic is changing, as the technology moves further into the mainstream. More and more people are seeing the value it brings at work and are beginning to look at the benefits it can bring to the home. Developments in satellite and ground systems architecture, as well as cost and efficiency, have increased the value proposition, as is evidenced with the emergence of WildBlue Communications, a high-speed satellite Internet access service directly to residential users and small businesses in the United States that is scheduled to be operational next year. Satellite Industry Evolution The satellite industry has undergone dramatic changes over the last few years. Leading companies have instituted major transformational changes in order to keep pace with development and customer demand. The changes have included privatizations, consolidation and, at the same time, a move toward a more customer-centric strategy that relies more heavily on gathering intelligence from clients in the process of developing products and services. The end result is a flexible, more responsive and nimble industry that can design products based on customer input and, in fact, create solutions that can be tailored to meet a variety of connectivity needs in reasonable speed to market timeframes and at reasonable costs to both clients and consumers. Since there is no killer app available for end-to-end broadband delivery, this is precisely the kind of a business model that can create value for the wide variety of potential broadband needs within the SME and SOHO business sectors.
