The areas of communications, broadcasting and Internet are developing at a pace that sometimes can be difficult to comprehend. As customers demand better communications, Internet access and video services, the demands on technologies become even greater. Technologies have the ability to come in and disrupt the status quo in any sector, and some companies and technologies are causing a stir within the satellite industry.

In terms of what technologies can be classed as potentially disruptive to the satellite industry, NSR President Chris Baugh, identifies optical data transmission. “The possibility to transfer information in space at over 1 Gbps per channel will open up a tremendous disruption in the current continuum of satellite telecommunication. It could find an early market in Earth observation missions operating in low-Earth orbit for applications such as large data volume transfers, quick response in times of crisis or after a natural disaster and for sensitive military applications,” he says. “IP networking has developed a whole new paradigm for satellite communications, and its adoption is opening up a wealth of new avenues for both FSS and MSS services, chief among them is better (and easier) integration and interoperability with LAN and WAN.”

Terrestrial Fiber

One of the oldest complaints/weaknesses about satellite technology is its inability to compete against terrestrial technologies In markets throughout Africa, the business case is skewed towards satellite due to its ability to cover large areas of land at a relatively low cost, however, the growth of fiber links in these markets definitely has the potential to disrupt the satellite business. Sea Submarine Communication (Seacom) plans to compete with satellite companies in Africa for valuable emerging market connectivity contracts through its submarine cable service, launched in July 2009. The operator assists communication carriers in South and East Africa through the sale of wholesale international capacity to global networks via India and Europe. “I don’t think that fiber replaces satellite in all of its forms, but fiber’s combined contribution of affordability and throughput speeds have and will continue to play a disruptive role for satellite,” says Aidan Baigrie, head of business development for Seacom. “Satellite can’t match fiber in the above regards purely based on capital expenditure and technology constraints involved in the medium. That is not to say that satellite isn’t here to stay. The more communications technologies proliferate in Africa the bigger the pie for satellite to access. At the same time, as the size of the pie grows, fiber encroaches into satellite’s value chain forcing it to play a more niche role.”

The desire for governments throughout Africa to have their populations connected, along with the desire from companies looking to do business throughout the continent, have created a land grab with different technologies trying to make sure they are not the odd ones out. Along with fiber, satellite players also are facing new wireless technologies, and the end result is a more diverse, multi-layered communications landscape than before, says Baigrie. “Satellite and fiber are individual technologies, but there is a big grey zone between where fiber ends and satellite starts. I believe with the advent of wireless technologies like 4G, WiMax and Wi-Fi and the proliferation of wireless devices in the country, it is going to mean that fiber is going to be able to extend its reach further, much more than many people are anticipating. Point-to-point communication is only one discrete use of satellite though. What I am not ignoring is that satellite has a point-to-multipoint value that really cannot be replaced by fiber. The encroachment of fiber and these mobile wireless technologies will have an impact on the industry, but I think satellites will always have a business case in a place as geographically diverse as Africa,” he says.

However, even for a fiber provider like Seacom, satellite plays an absolutely vital role, particularly in terms of providing backup services, as Baigrie admits Seacom has experienced connectivity issues in the past year. “The challenge on the fiber side is although the risk of an outage is low, the impact is high and probability multiplied because the impact is what counts to the end customer. Have we had more problems than anticipated? I think the short answer is ‘yes.’ This is due to the fact that we have extended our network further inland than originally anticipated. There is so much growth and development going on in Africa currently that you can lay the fiber one day along a road and a week later, the road is dug up to become a high-speed train,” he says. Satellite’s reliability can become key for Seacom even if Seacom’s fiber technology is disruptive to the satellite sector as a whole. “One of the biggest challenges in the fiber-optic broadband delivery space is restoration and reliability,” says Baigrie. “Satellite provides a great restoration alternative for fiber due to its far-reaching capability, reliability and alternate data transfer means (through air, no fiber). However, the downside is satellite cannot carry even a fraction of the traffic of a fiber-optic cable.” 

Small Satellites

Traditional modes of thinking have always been the bigger the satellite, the better. Satellites have grown, and some of the Ka-band monsters barely are recognizable from some of the satellites a few years ago, but in terms of the building of satellites, it has been the gradual emergence of a small satellite market that has changed the nature of this market, and opened up new opportunities. Surrey Satellite Technology Ltd. (SSTL) “does employ one element of disruptive technology with the appropriate use of commercial-off-the-shelf technology in its missions,” says CEO Matt Perkins, CEO. “If that was the only disruptive element, other companies would have quickly followed and it would no longer be disruptive. I think the biggest disruptive element we bring is our unique approach to space missions. We have co-located, tightly focused teams using relevant components and processes, and we rely on individuals to accept ownership and responsibility to enable us to deliver missions in a cost-effective and timely way. I think this is the more disruptive element and is borne out by the fact, 25 years after being founded, SSTL is still in the market, continuing to be a disruptive element.”

Some commercial operators are willing to embrace the idea of smaller satellites. Hispasat CTO Antonio Abad believes there is a market for smaller satellites — as long as launch prices come into line. “Bigger is better as far as new satellites are concerned. The problem is, in increasing the size of the satellites, we go beyond the range of certain launch vehicles, then the launch price for the Ariane could become expensive. There are still opportunities for smaller satellites. Speed to market is key. We need a launcher for smaller satellites. We find launch prices are not in line with small satellites. If we would have the possibility to have launchers for smaller satellites, we would see more satellites here.” SES vice president of planning and engineering Michele Franci believes smaller satellites provide the benefit of a shorter time to market, which provides SES with the flexibility it needs going forward. “It takes an incredible amount of design to get a satellite design off the ground. The extent of which the industry can reduce the time to orbit would be good for us. That would be an incredibly beneficial advance for all of us. On the bus side, we have seen more efficient batteries and solar panels. Another area we hope to see improvements is on the propulsion side. It is still very old fashioned today.” But with demands for bandwidth ever increasing, other satellite players continue the quest for larger and larger satellites. DirecTV’s business requires the company to acquire a number of satellites and capacity, particularly as it offers its subscribers large numbers of HD channels. Phil Goswitz, DirecTV’s senior vice president of space and communications, says because the operator has a philosophy that bigger is better. “We constantly play with idea of going smaller, but it is never enough. We want the upper end of what manufacturers can do. Maybe satellites have got big enough. Maybe we have accumulated enough risk on one satellite that we should stop, but we don’t.”

Perkins says the satellite sector’s recognition of small satellites has not been an overnight phenomenon. “I think that different markets have shown different levels of acceptance of the small satellite approach. Certainly, commercial customers, such as RapidEye and Deimos, have shown an acceptance of small satellites. Commercial customers want to find the best value for money to close their business case and small satellites are effective here,” Perkins says. However, there can be differences in attitudes from governments and national space agencies. “Governments in space-developing nations also see the benefits of small satellites as a route to development of a high technology industry in their country. National space agencies have proved slower to respond, and so institutional spend has not developed to the same degree. In the United States, while the acceptance of small satellites is growing, it has yet to advance to the same level as other countries. Overall small satellites have had an influence if you consider 25 years ago, there was no market for small satellites and now there is one,” he says. 

Cardless Content Security

Some of the most interesting technology developments are taking place in the content security marketplace, as DTH operators and broadcasters grow increasingly dependent on strong security systems to protect their investments. Previous state-of-the-art protection was based on smart cards, and if the system was hacked, an operator had replace all of its smart cards. This is the method for DTH operators that use content security solutions from companies such as NDS and Nagravision, the main suppliers of these systems. However, companies such as Verimatrix and Latens are trying to disrupt the market by basing content security on software rather than on smart cards. Tom Munro, CEO of Verimatrix, says the company thinks of it more as “revenue security” rather than content security. “We are not just protecting the ownership of that content but also the cash register of the operator. The key benefit for us, and where we position our software based solution approach, is renewability and portability. Both of those things we see as important. Software-based security allows someone to address a hacked system quickly. Our software solution can be upgraded and renewed much quicker than distributing smart cards.”

The software-based approach makes it easier to protect content on different devices, says Munro. “We are able to deliver a single system that works across a wide range of devices and networks. A typical approach in the past is a satellite operator delivering services via a satellite box. Today, we are able to say to that same operator, in addition to reaching those customers, you can reach other customers on an ad-hoc basis, on an on-demand or events-based basis, for example, on other devices. It is that future-proofing that offers a really good value proposition. The operator does not think of themselves as just a satellite operator, and they may reach customers on other devices, such as over wireless, the Internet or some kind of managed IP connection or through hybrid boxes. We have the ability to do that with our architecture.” The trend toward software-based content security will grow. “You only have to look at IPTV, where virtually 100 percent of platforms are protected by software-based security. You look at the Internet and OTT platforms, and they are all being protected by software based DRM now,” he says.

Another company following a similar route is Latens. Jeremy Thorp, the company’s CEO, says the traditional mode of smart card-based solutions could become outdated. “The reality is that you do tend to find that card-based solutions are hacked. You need to replace the cards every so often. You are seeing a lot of card-sharing attacks taking place. Also, from the operator’s point of view, having a cost-effective solution is a critical driver. It is more cost-effective in terms of what they pay out. The other question is, ‘How much money do they lose when they are hacked?’ I think we come out very well when looking at that and competing against these other technologies. We can make sure we can secure platforms, and if they are any gaps, we can respond to it much quicker,” he says.

Like Verimatrix, Latens has started to win business from small satellite start-up operations, which Thorp hopes will lead to bigger companies following along. “The final question is, ‘Why have big operators not moved over to cardless solutions?’ I think it is more a case of why would they disrupt this model, but I think you will start to see operators move away from card based technology.” Thorp believes this part of the broadcast market is in the midst of a significant “state of change”. “On the satellite landscape, you will see more greenfield operators, and possibly one more established operator will have started to try our technology. The market is in a major state of change, and quite often when you into this change, you don’t necessarily realize what is happening. I believe we are near that stage. We are starting to see the big players switch to this technology. I think when we look back in four years time, this will be the time which will be seen as the tipping point for cardless technology. It will be looked at the time where operators revisited their thinking in terms of content security,” he says. 

Bottom Line

Technology is shaping the modern world more than ever before. It seems that with the introduction of every new device, there are more ways to communicate and share information. The satellite sector is well-placed to play a vital role in serving customers/households all over the world, but like most technologies, it is faced with disruptive technologies inside and outside, and how satellite players deal with potential disruptions will determine how well they fare against new technologies going forward.

Mark Holmes is Via Satellite’s Associate Editor.