Business development executives seeking profits from the Internet-via-satellite marketplace need to focus on e-commerce opportunities in the right geographic locations if projections are accurate according to a new study.

Currently, more than 11 percent of the world’s Internet service providers (ISPs) now use a satellite link to connect to an Internet backbone, according to the Internet via Satellite 2000 Report. In addition, many companies now are looking to use two-way satellite terminals to provide high-speed Internet access to their corporate end-users, thus bypassing telecommunications companies and allowing ISPs to keep control of their customers, revenue streams and networks.

The most promising short-term development in IP over satellite is in the emergence of a number of these two-way, satellite-based Internet access services such as that provided by Tachyon and the Gilat operation, according to the study.

“I suspect the consumer market does not have the $1,000 for the two-way terminals. Projections indicate [that in] two to four years after broadband comes into the marketplace, [businesses will begin to yield consumer market revenue],” Roger Stanyard, principal consultant and author of the report for the UK-based DTT Consulting firm told SPACE BUSINESS NEWS. “The market is more favorable to the next-generation VSAT businesses that are providing e-commerce rather than to consumers because the maximum market share for high-speed Internet access is 15 percent.”

Business Models May Want To Buttress Satellite With Fiber

According to the report, fiber continues to dominate the marketplace and always will play a role–even if it shrinks to the vital last-mile segment. “The anecdotal evidence from our research suggesting that many of the satellite links were short-term measures intended only for use until fiber came along is starting to be seen,” Stanyard added. “There is already a discernable shift of traffic from satellite to fiber among ISPs in Central and Eastern Europe.”

Some companies have caught on and are choosing to work with, rather than fight the presence of, fiber. Out of the 338 industry suppliers detailed in the report, some of the major satellite service providers with large operations in supplying satellite ISP links now are investing in fiber. Impsat, working with Global Crossing, now is exceeding a turnover of $200 million a year.

The Right Geographic Location Is Vital For Business Success

Even if a business model contains the fiber and e-commerce components, targeting the wrong country or region will not yield profits, but rather mere frustration.

The report analyizes the market potential of the eight major regions–Western Europe, Central and Eastern Europe, Middle East, Asia, The South Pacific and Australia, Latin America and the Caribbean and North America–along with the major countries in each respective geographic area.

“Bottom line: the Internet has developed where the money is and may continue,” Stanyard said. “South America, for example, is a growth region because it is a homogeneous market.”

Africa including South Africa and the Middle East, however, may not yield high profits Stanyard added. “Even though South Africa dominates the entire

African continent, it is still a small market,” he said. “Roughly only one-eighth of the population would benefit from business developments in Africa.”

In addition, business developers may want to follow closely Western European initiatives as executives eye ISP developments in the industrial world.

“Another development which is not detailed in the report is that European business is quickly reorganizing behind the Euro this year. I think that will lead to many cross- border mergers and the need for networks to control any sort of e-commerce structure which will affect internet-via-satellite developments.” Stanyard added.

Those wishing to purchase the 427-page report for $1,195 can do so by contacting DTT Consulting at +441 9.62.87.78.50.

Major Market Segments for Internet Via Satellite

1998: ISP links to backbones, Hybrid access services

1999: ISP links to backbones, Hybrid access services, Caching and Usenet feeds

2000: ISP links to backbones, Hybrid access services, Caching and Usenet feeds, Two-way access services

2001: ISP links to backbones, Hybrid access services, Caching and Usenet feeds, Two-way access services, Voice over IP

Source: DTT Consulting