One of the closing panels  of SATELLITE 2011 focused on a highly discussed topic in terms of the future of the satellite sector — broadband. The panel “Satellite Broadband: Ready for Real Market Impact?” brought together speakers from O3b Networks, ViaSat, Hughes Network Systems, Eutelsat and Thaicom to discuss the opportunities available for satellite players.
    Mark Dankberg, chairman and CEO of ViaSat, said it was vital for satellite companies “to outrun alternatives” in the broadband markets where they operate. “One of the issues facing operators is, ‘Can you handle streaming video?’ The option is how well you do it compared to other alternatives. What a satellite needs to do is outrun the other alternatives, so even where there are some terrestrial options, people are consuming more bandwidth. The big leap is to get high-capacity to drive the unit cost of bandwidth. Streaming video consumes a whole lot. We believe we can keep up with terrestrial alternatives. People are realizing that WiMax is not so good for terrestrial video. It used to be the elephant in the room. The real challenge is going to be five to eight years down the line, when you will need higher capacity satellites,” he said.
    Dankberg said satellite operator’s should not necessarily become caught up in singular aspects of the broadband offering, such as speed. “Technology is only one aspect of it. A great example of this is TV. Comcast has the best physical plant anywhere in the world. But you look at the satellite technology deployed by the likes of DirecTV and that is more than good enough, so other values then come into play. I think we have some catching up to do” in terms of the overall package.
ViaSat has been one of the most aggressive players in the market and its ViaSat-1 satellite is scheduled for launch later this year. Dankberg has spoken often about a follow-up ViaSat-2 satellite, as the operators looks to cement its position in this market. Both ViaSat (through WildBlue) and Hughes now have around 1 million subscribers in the U.S. retail broadband market.
    Paul Gaske, executive vice president and general manager of Hughes North America, said with a number of operators now launching spacecraft, satellite is really beginning to make its presence felt in the broadband market. “Our Jupiter satellite launches in March 2012. We are currently filling our Spaceway satellite. Customers like the higher speeds from Spaceway. With any of these big systems, one of the aspects of them is that they will evolve. We have seen the video requirements of users rising. The unit cost of Jupiter is cheaper than Spaceway. We hope there will be more Jupiters around the world. You have SES and Eutelsat, which have waited for the bands to come up and launch satellites. Avanti are beginning to roll out. They leaped in during the middle of the game, and that is pretty interesting.”
    While the market potential may be increasing for satellite, as the technology improves and the rollout of terrestrial technologies becomes prohibitive in some areas, satellite broadband remains far from an easy market to monetize. Nongluck Phinainitisart, president of Thaicom, said Asia is proving to be a hard market for satellite broadband to crack. “It is tough. When you provide a VSAT service, you need licenses. In India, we need to go through ISRO. We have learned lessons the hard way. It has taken years. Once we have got the landing rights, we could not keep up with demand,” she said. “In India, things are looking very good. In Australia, we have dealt with NBN, and that situation is also promising. China is a tough market. It has gone at a snail’s pace in terms of getting the landing rights.”
A new IPStar satellite could be some way off, and if it were ever to be launched, it would have a much tighter focus in terms of coverage, Phinainitisart said. “We might be able to launch another IPStar satellite in the next few years. I think many countries are thinking about launching their own broadband satellites. India and Australia are thinking about launching their own satellites for example. It is also a question of sovereignty. Many governments feel comfortable launching their own satellites. If we were to launch a new satellite, it would be targeted to specific markets rather than spread it around a number of different markets,” she said.
    Arduino Patacchini, director of multimedia for Eutelsat, would not rule out the operator investing in another major broadband satellite. The operator’s Ka-band satellite, Ka-Sat, reached orbit in December, and now Eutelsat’s job will be filling that satellite and showing that there is a demand for satellite broadband in Europe. “We don’t know what will happen there. We are assuming the consumption of bandwidth will increase. I think that Ka-Sat is a big step for Eutelsat. It changes our business model. If the capacity fills very quickly, the option to create the second Ka-Sat is there. The speed is comparable for ASDL2, but we would definitely look to a second satellite. We have the orbital position. One of the advantages is Ka-Sat is that it covers all of Europe. We need to make sure the business works, before we make another investment,” he said.
    Steve Collar, CEO of O3b Networks, said the company is focused on the “middle mile” and not on selling direct access to the customer. It also has a different approach in markets such in Africa. “There is a big difference between broadband and connectivity between Europe and North America and the developing world. One of the biggest problems is the backhaul. Yes, fiber and wireless are there. I think we need to think differently about the way we serve the developing world. O3b can be integrated into terrestrial systems and can provide terrestrial performance. One of the key challenges for us is to convince customers about our system prior to launch.”
    Collar says O3b does not really compete with fiber operators, as it is looking to sell capacity to the likes of major telcos and wireless operators in emerging markets that need the extra bandwidth. “The demands for bandwidth are high. O3b has an implicitly mobile system. We can respond to fiber cuts, emergency situations. We will be using those attributes for a number of different applications. We are selling into countries that are fibered if not more fibered in Africa. We don’t compete with fiber. The deployment of networks in Africa will spur the needs for applications.”