With economic crisis in the saturated European and North American markets, satellite operators are now turning to emerging markets with limited infrastructure and growing demand for communications services for new growth opportunities. Latin America is an obvious choice with its booming economy and growing middle class, lead by Brazil, which represents 50 percent of the Latin American market. According to a study by Frost & Sullivan, transponder capacity available in the region is expected to quadruple during the next five years, and given government universal broadband programs, Ka-band capacity will play an increasingly important role in this new growth cycle for the Latin American satellite market.

The region’s territorial characteristics — from the Amazonian rainforest to the Andean mountains — are a boon for the satellite industry, which thrives in remote locations with no access to terrestrial communications infrastructure, such as cable, fiber and cellular. While satellite pay-TV and VSAT private network data services have seen double-digit growth in the region during the last three years, as has broadband subscribership, satellite technologies still represent less than one percent of total Internet access connections in Latin America. This is mainly due to the high price of the service (which can reach more than $300 a month for a basic narrowband connection) and end-user equipment.

Ka-band technologies have emerged in recent years as the choice solution for providing mass consumer satellite data services to rural users, since they reduce the price barriers for both ISPs and the end-user. Whereas traditional satellite communications use lower frequency C- and Ku-bands and a hybrid satellite business model with wide regional signal beams, Ka-band’s high frequency allows for more bandwidth efficiency and frequency re-use, which is why operators typically use directional spot beam satellites.

Building a Ka-band satellite, however, is a lot more costly for satellite operators since the technology needs specific components, which is why the market has developed a preference for dedicated high-throughput satellites with more than 100 Ka-only wide transponders (up to 15 times as much capacity as an average C- or Ku-band transponders, which typically range from 27 MHz to 72 MHz) and focused the technology on mass consumer markets.

Several satellite operators have already announced shy investitures into the Ka-band market in Latin America in the near future, but up to now, these have been few and far between and almost exclusively comprise of a small test-capacity on mainly C- and Ku-band spacecraft. However, recent developments point to the possibility of mass satellite broadband finally coming to the region, with the emergence on two new players in the regional market: Hughes and Eutelsat, which have recently won exploration rights for Brazilian orbital positions. Both already have successful Ka-band operations in the United States and Europe and, while neither has announced their plans for the new positions, their agreements with Brazil regulator Anatel do include provisions for Ka-band capacity, as well as a five-year deadline for launching the satellites. (It is expected, however, that Hughes’ parent company EchoStar will relocate existing spacecraft to the new position to launch its Dish Networks DTH television service by year-end to compete with DirecTV’s Sky.)

Latin America’s largest satellite operators, on the other hand, aren’t so ready to jump the Ka-bandwagon. Although Carlos Slim’s Star One, which won two new orbital positions in Brazil’s auction, also has provisions for Ka-band coverage in their agreement with Anatel. The general view among the big boys in the market is that, despite technological advances, Ka-band’s susceptibility to frequent outages make it an unwise choice to serve VSAT corporate clients, which increasingly represent the majority of satellite applications (and revenues) in Latin America, going against the global broadcast current.

Commercial operators will also have to face government competition in the segment. Venezuela has already launched a hybrid satellite with some Ka-band capacity to serve its broadband programs, while Bolivia plans to do the same in 2014. The Mexican government is also launching several satellites in the following years, although no plans have been announced for Ka-band.

The most promising Ka-band announcement to date has come from the Brazilian government, which plans to build a dedicated Ka-band satellite — a first in the region — for providing ISPs with the necessary backhaul for their fixed and mobile broadband offers, as part of the National Broadband Plan. BRSAT-1, which is expected to launch in 2014 with both X- and Ka-band capacity, will be operated by the Brazilian Ministry of Defense and the state telco Telebras.