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The satellite cellular backhaul market is increasing in importance and proving to be a more lucrative one for satellite operators around the world.

According to Patrick French, an European analyst at research firm NSR, the number of transponders used for cellular backhaul will show some strong increases within the next few years.

According to recent NSR research, in 2006, there were a little more than 90 transponders being used for satellite cellular backhaul, mainly in C-band. In 2011, NSR believes this figure will grow to 150 transponders, showing a fairly strong growth rate.

"Two years ago, this section of the industry was off the radar screen," French said. "This has now become a very important area of the market. This demand has been going on since the mid 1990s, but now we are seeing the sector flower and develop."

Satellite cellular backhaul is particularly important in regions such as Africa and Asia, where the flexibility of satellites can be used to bring cellular services to people in places where terrestrial wireless transmission technologies struggle. Distance and topology issues mean access to mobile base stations can be restricted, and this is where satellite comes in.

Intelsat is seeing an increased market for such services. Denis Descour, Intelsat’s regional marketing director for Africa, said "it has been an effort for many years pushing this application to mobile operators. There was an evangelism process, but it is now a growing business at Intelsat. We had 40 percent growth on that application last year. There are a lot of opportunities in Africa, Asia Pacific and Latin America."

With 40 percent growth, this is a flourishing business for Intelsat. The question is how big is the market? Globally, there are around 2 billion wireless users. With a global population of more than 6 billion, there is still growth to be had.

To attack these under-penetrated markets around the world, satellite could be vital. In terms of some of the largest markets for satellite cellular backhaul, Daniel Enns, senior vice president for strategic marketing and business development at Comtech EF Data, said "Africa will always be disadvantaged infrastructure-wise. Nigeria represents the largest cellular market over satellite. You also have strong markets in Southeast Asia. There are numerous island nations and there are questions about how we reach people there. Satellite will always be a force in those markets."

Satellite cellular backhaul services also are popular with operators once deployed. Richard Swardh, business manager for satellite systems at Ericsson, said "we started with an operator in Malaysia many years ago in this area. The same operator wants to buy more cellular backhaul over satellite. They come back year over year."

While satellite can offer mobile operators a compelling way to reach new subscribers, there are obstacles. Swardh highlighted a case: "The number one issue we face in many parts of the world is power," he said. "MTN (a Nigerian mobile operator) is a customer of ours. We run much of their network in Nigeria. They have to use 8,000 diesel generators to power cell sites."

The key for success for satellite will be its ability to reduce costs. Kevin Bruemmer, director of technology and business development at NMS Communications said "Fuel/energy is a way of cutting costs. That goes under-appreciated a number of times. Maintenance and service costs are another area where you have to reduce costs. With the operators around the world, you have language barriers. You have to make sure equipment is easy to set up."

Another major bonus for satellite is that it can help operators get to market quicker. "We can do microwave to connect sites, but microwave can only reach so far," Swardh said. "That is where satellite comes in as an excellent complement to microwave. It also helps operators in the time equation. They can go out to remote areas and gain this new layer of subscribers. They can use satellite technologies until they get their normal terrestrial infrastructure in place."

Jack Waters, senior vice president, global sales at iDirect Technologies said "the service providers want to expand the business. That second envelope of customers is what these operators are targeting. People in rural areas have adopted cellular services much quicker than forecasts. There is huge demand, so this brings into services such as cellular backhaul over satellite, which helps in terms of time to market."

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