[Satellite News 05-15-09] The mobile IP-satellite industry does not cater to a "mass market," according to Vizada Vice President of Business Development Larry Paul, whose statement sparked a panel debate at the IP Satellite Summit over whether the scope and strength of the potential mobile satellite services (MSS) subscriber base justified the large capital investment required to build its infrastructure.
    Claude Rousseau, senior analyst at NSR, asked Paul and his fellow panelists, "Will IP Move the MSS Market to Mainstream?" to express their opinions on whether or not the MSS industry was experiencing a shift to a wider mass-market acceptance driven by hybrid IP developments with telecoms.
    Paul said MSS remains a niche market product and should think in what he believes are realistic terms. "I think we’re complicating things a bit by thinking that we’re going to be a mass-market consumer product industry. There are few general consumers looking for satellite phone handsets. For example, a rancher in Montana may need one but use it a few times a month," said Paul. "Our customers are in government and industry. When we talk about ‘customer experience,’ we should keep that in mind."
    Paul’s comments seemed to agree with a few audience members; one of which asked the panel to explain who they felt their customers were. Vice President of Strategy for SkyTerra, Christian Gates, defended his company’s plans to use hybrid IP satellite and terrestrial networks to deliver cellular phone products to the consumer public. "Yes, we’re taking a risk with this plan, but we’re confident in our ability to deliver a product that will drive customers to us," he said. "What makes us unique is that we’re integrating satellite chipsets into regular terrestrial handsets. This is designed to improve customer experience by expanding our coverage. IP mobility has created seamless roaming, even between Ku- and L-band, without dropping calls. As long as we maintain that quality of service, we believe the potential holds hundreds of thousands of customers," he said.
    Don Thoma, executive vice president of marketing for Iridium, said his company has already seen the favorable results that justify further funding and investment in remote infrastructure. "We know who our customers are and what they need. Most importantly, they need reliable communications in remote areas. We’ve made big bets in putting up a satellite for 15 years, and it has paid off in that our customers tell us our system works and that base is growing. IP will give us even more opportunity by enabling us to upgrade the applications side more frequently," he said.
    Casey Ramey, vice president at CVG /Avtec Systems, said he has seen enough growth in the military end-user base to drive funding due to IP technology making interfaces more accessible. "Not too long ago, there would only be one or two people in a military division who were qualified to use mobile satcoms. Now, with IP making everything simpler, everyone who has plugged in an Ethernet cable can operate these systems," he said.
    Rousseau asked the panel if wider acceptance of MSS IP services would bring back the issue of bandwidth constraints, since more terminals would have to be issued. Gates said that SkyTerra will manage capacity through pricing. "We’re going through a transition planning right now. Our goal is to make terminals less expensive and more widely available, but the growth of communications has moved from location-specific to person-specific and our business models have to adjust. This is how we’ll keep managing capacity."
    Thoma, who named emergency first responders as a key element of Iridium’s customer base, was asked if IP capacity restraints would affect quality of service during disasters — when a flood of IP registrations would occur in a small, concentrated area. Thoma said government bureaucracy and regulation issues have been an obstacle to quickly obtaining capacity. "One prime example of how this process is slower than we’d like it to be is [the U.S. Federal Emergency Management Agency], an organization that has no money right up until there is a disaster. Then they get a lot of money right away. So things happen very quickly in a short amount of time. But these congestion problems are not as bad as you may think and don’t last that long," he said.
    Paul said while he understood that some companies have the customer base, not all MSS business models will succeed. "I think that IP interoperability has reduced costs and customized capacity ordering definitely has an appeal. ATC (ancillary terrestrial components) is also driving a lot of funding and investment our way. I also know that a lot of companies are making a big confident push on this. If Harbinger had its way, Inmarsat would suck up the entire consumer market. and they’re putting the money behind it,” said Paul. “However, I believe satellite will eventually be the ancillary of ATC and that IP is not the best solution for everyone. And it’s important to remember that some of our highest priority customers are still using circuit switch technology."