|Issue:||Europe I 2012|
|Topic:||The transition effect|
|Author:||Serge Van Herck|
Serge Van Herck is the CEO of Newtec. Previously he was Head of Satellite Services at Belgacom and Senior Manager in the Communications and High Tech practice of Accenture in Brussels.
In the long run, the only way for satellite service providers to compete with terrestrial services is to use new Ka-band satellites. Many satellite operators are planning to launch Ka satellites over the coming years so there will be excess capacity for some time. There is therefore a common interest for satellite operators and service providers to rapidly develop new services using the new Ka satellite capacity
Satellite operators around the world know it: the future of satellite communications is called Ka-band. This is simply because the total capacity offered by other commercial frequency bands cannot possibly cope with the ever increasing bandwidth requirements of the cyber world, certainly not at a competitive price against terrestrial services.
In the long run, the only way for satellite operators and satellite service providers to stay in the game is therefore to launch or use new Ka-band satellites. Many launches are now planned around the globe for the coming years and although the main target for these are large-scale consumer broadband access networks, the availability of new Ka-band satellites is very likely to have a major impact on the rest of the satellite market, including IP trunking and mobile backhaul. This in turn is likely to impact on services available and monetization.
The roll-out of large Ka-band consumer access networks will take years as there will be an inevitable ramp up period necessary to acquire the hundreds of thousands of new consumers. It could take as long as five years for the filling rate of the transponders to reach the point of a positive return on investment for the satellite operators, yet the capacity will be available from day one, and since many operators will be launching Ka satellites at approximately the same time the excess capacity will have an impact for some time.
Many professional satellite services have reached the point where it becomes impossible to stay profitable and competitive against fibre or other terrestrial technologies. To make things worse, these terrestrial networks are progressively increasing their reach to places where satellite was once the only possibility. Because Ka-band capacity will be both much cheaper and much more abundant, it will be seen as a life-saving opportunity by many satellite service providers.
There is therefore a common interest for satellite operators and service providers to rapidly develop new services using the new Ka satellite capacity. But this evolution will not be as straightforward as changing the RF part of the transmission chain. The operation of services utilising Ka-band requires a very specific ground infrastructure and also has an impact on the value chain for operating this infrastructure.
How will Ka-band affect the value chain?
A Ka-band communication system is an integrated, closed network configuration, very different from the transparent pipe provided by Ku or C band satellites. Most Ka-band satellites use spot beams, which means that each antenna on the satellite transmits to a relatively small geographical area on the ground (typically a few hundred kilometres in radius). This allows transmissions with higher power levels than with wide beams, because the power is concentrated on a smaller area. Satellite communication using a spot beam satellite therefore has a star configuration, and communication between two remote stations in two different spot beams must transit through the gateway.
Because the operation of the gateway includes the careful management of power levels and frequencies among the feeds, spot beams and against fading, it is very likely that most satellite operators will want to operate the gateways themselves. An alternative scenario is for the satellite operator to outsource the operation of its entire gateways to larger independent teleport operators. Hence the impact on the value chain of the satellite business. Ka capacity will no longer be sold by satellite operators as naked capacity, but rather as managed services. For broadband access networks, the operation of the service by the satellite operator can go very deep in the value chain: the market will see some service operators becoming their own satellite operators, while some satellite operators will venture into the service provider business. Fortunately for independent service operators, the integration does not need to be as pronounced for all applications. The role of teleports will however be very different during the era of spot beam Ka-band services.
What will be the applications and impacts for IP trunking and mobile backhaul?
Satellite trunking is certainly one of the main challenges in the satellite communications industry and will be critical to providing capacity to the mobile sector. The additional capacity will enable new applications and services via mobile that will help to monetize the mobile sector.
There is a constant battle between the increasing demand for bandwidth, limited capacity availability and high pressure on prices. The availability of Ka capacity could solve all of these problems at once, if the specific nature of its ground segment infrastructure can adapt to the application. The star configuration of the Ka network fits nicely with the requirements of point-to-multipoint trunking networks, provided there is a backbone access at the gateway, and/or if gateways are inter-connected via fibre (if the trunking network spans across multiple gateways).
The main challenge in implementing high speed communication links on a Ka system will be to cope with fading while maintaining sufficient availability and throughput for these kinds of services. Some of the techniques used to counter fading can result in making the throughput vary over time. Since most IP trunking customers are used to buying fixed-rate capacity, the shift to Ka-band could require some changes in the business model of trunking services, such as the introduction of committed and best effort capacity in the service contracts.
Will Ka-band change the industry landscape?
Ka-band satellites are likely to change the circumstances for many different applications. The companies involved with them will enable new and different business models. Ka-band satellite capacity will require new technical solutions. It is already deployed for broadband access and for TV distribution, but not yet for the other types of applications yet the appropriate technologies exist and provided they are combined into a useful multipurpose platform, companies will be able to rapidly or progressively add value to Ka-band satellite networks and dramatically increase the return on investment for satellite and service operators. This is possible now, but only time will tell how the industry utilises the new applications and what this will mean for the mobile industry.