Executive Roundtable: Latin American Broadband Satellite Market

by Bernardo Schneiderman

Sao Paolo, Brazil, October 1, 2019--The Latin America broadband satellite market is growing at a steady rate. These days, it is showing a potential high growth because of higher available capacity. Today, players are competing with low-cost VSAT terminals with the Ku- and Ka-band capacities that focus on Internet and OTT/Video streaming services. These are all brought about by High Throughput Satellites (HTS) satellites entering the region during the last three years.

Factors such as the ability to provide services to the unserved urban and rural areas, which are out of the reach of internet connectivity by cable or radio, are defining the satellite broadband market. Because of the strong government support in countries like Brazil, Argentina, Peru, Colombia and Mexico, the satellite broadband connectivity cost is decreasing. Private players like Hughes and ViaSat are also offering more affordable and faster internet connectivity by introducing pay per use and monthly and yearly plans.

According to a recent NSR report covering VSAT and Broadband Satellite Markets 2019 edition, “Satellite Consumer Broadband is just scratching the surface of the opportunity, capturing less than 1% of the potential addressable market.”  Lluc Palerm, NSR senior analyst and report co-author, says “subscribers are very sensitive to more generous data caps and cost. Consequently, lower capacity pricing will trigger strong demand elasticities. Additionally, the ecosystem is still underdeveloped in many regions and Latin America is one region still in development.”

Palerm predicts a stronger focus on retail, and that newly available capacity will see accelerated growth. He said new business models like Wi-Fi Hotspots, which are proliferating, would open the lowest segments of the market. He added small cells will drive 43% of service revenues by 2027.

Video is, by far, the primary driver of data traffic. Multiple offers are now promoting unmetered services for web browsing, email, and other critical functions, but “streaming time allowance” is defining subscribers’ quality of experience. Video quality at 720p is now standard among several platforms. The reason for this is to allow users enjoy faster streaming time, albeit this also sacrifices video quality. But even with these measures, data caps are still very restrictive with the current balance between ARPUs and capacity pricing. However, once prices decline below 100 USD/Mbps/Month, data allowances can grow generously, “activating demand elasticities,” says an analyst.

Today, Internet service providers (ISP) and mobile network operators (MNO) employ satellites in providing broadband service. Thus, satellites are employed as the “middle-mile” or backbone solution, but in some regions, they also provide the full solution to the broadband connection.

The key satellite operators and service providers of broadband via satellite in the Latin America Region include ABS, Eutelsat, Hughes, Hispamar/Hispasat, Intelsat, SES, Telesat and Viasat, among others. By country, satellite operators and services providers are as follows:

Argentina: ARSAT – Government Agency provides capacity and services in Ku-Band with two satellites focusing on remote areas and for use by government agencies

Bolivia: TKSAT-1 is operated by the Bolivia Space Agency and provides services for government agencies and for remote areas in Ku-band

Brazil: Telebras (Government-owned company) provides capacity and services in Ka-band; Star One – (Private company Embratel Star One is a unit of Claro Brasil) provides capacity in Ka-band, Ku-band and C-band in Brazil

Mexico: The Mexican Satellite System, also known as Mexsat, is a network of three satellites operated by the Mexican government’s Ministry of Communications and Transportation. It provides services to the defense department and most government agencies and provides connectivity to remote regions where no service is available. Mexsat-1 and Mexsat-2 are twin satellites used for mobile communication devices and operate in the L- and Ku-bands. Mexsat-3 operates in the range of the extended C and Ku-bands.

Venezuela: Venesat-1 is operated by Venezuela’s Ministry of Science and Technology and provides services to government agencies and remote areas in Ku and C-band.

Satellite Markets (SM) invited to contribute for this article all the key players in region. We received feedback from Estevao Ghizoni, Latin America, Managing Director of the Americas-ABS; Sergio Chaves, Business Development Director for South America-Hispamar; Jurandir Pitsch, Vice-Pres. Sales Latin America & Caribbean-SES; Lincoln Oliveira, Director General-Embratel Star One; Mauro Wajnberg, General Manager-Telesat Brasil; and Kevin Harkenrider, President, Broadband Services-Viasat Inc.  Excerpts from the operators’ responses are as follows:

SM: How are you addressing the broadband satellite market in Latin America in regards to video and Internet/data market. Please give us some examples of satellite capacity or product and services?

ABS: ABS offers highly effective satellite solutions to South America. We have invested in and expanded our team in the region with the appointment of Estevao Ghizoni, Managing Director of the Americas and Edison de Vito, Sales Director of Latin America to support our Latin America customers, enabling us to more effectively deliver capacity and solutions at the local level.

The Latin America region has diverse geographies and diverse economic tiers favoring solutions that are flexible, high throughput, frequency agile, and economically compelling.

ABS-3A is one of the world’s first new generation innovative all-electric propulsion satellites which allow us to deliver more affordable capacity to our customers. Launched in March 2015, it began operations on September 7, 2015 and was authorized in Brazil by ANATEL in February 2016.  Its services high-growth data, video, mobility and government applications.

In the broadcast video segment, ABS-3A is a pillar for high profile broadcast contribution in the Americas, Africa, Europe and MENA.  It has a dedicated Americas beam along with an extensive broad European beam, which extends from North America, across Europe to Moscow and provides optimal coverage for diverse media requirements.  We have made significant progress in the video service across these markets with many well-established broadcasters.

In addition, the ABS-3A verticals such as VSAT and IP Trunking are among some of the applications that are being used on the high-power Americas beam covering North American and all of South America regions. ABS work in partnership with local service providers on many applications such as Cellular Backhaul, IOT, OTT, Maritime Mobility, and Corporate Applications.

Hispamar: The Video market relative to DTH is stable in what is relative to the consumption of Mhz, and in the Content distribution market, has grown, the amount of content transmission channels has increased, through regulatory issues or through the initiation of new content. There is also a movement in relation to the exchange of satellite providers for this market.

Hispamar’s Guaratiba Satellite Control Center in Rio de Janeiro, Brazil.

With the entry of the HTS satellites, it was noticed the need for the operators to descend more in the value chain, offering products more level of mbps and not only Mhz. So that the client does not have to have to invest in a HUB, this has brought new demands, both for the consumer market and for the corporate market.

In our case, we have invested in more than 4 Hubs directly (covering all of Latin America through the Ku band and part of the Ka band) or through associations in Latin America. Some for the consumer market and others for behavior and mobility.

In our current model, we do not go to the end customer directly, we always do it through B2B. Sometimes due to the need to enter the market we can participate in a bid to enter a country.

Hughes: Over the past few years, Hughes has launched broadband service in several markets throughout Latin America.

Hughes has been offering broadband enterprise services in Brazil for decades. In 2016, with the launch of Hughes 65 West (the Ka-band payload on the Eutelsat 65 West satellite), we began offering HughesNet®, our flagship satellite Internet service for consumers and small businesses. In 2018, we launched Hughes 63 West (the Ka-band payload aboard the Telstar 19 VANTAGE satellite), which brought more capacity over Brazil. And earlier this year, we announced a joint venture with Yahsat to combine Hughes do Brazil with Yahsat’s consumer broadband company in Brazil, creating a strong value proposition to serve the growing market demand for a wide range of broadband services, including consumer Internet access, enterprise networks, cellular backhaul and community Wi-Fi hotspot solutions.

The venture combines the companies’ more than 65 Gbps of Ka-band satellite capacity on Hughes 65 West, Hughes 63 West and Al-Yah 3 high-throughput satellites (HTS), reaching more than 95% of Brazil’s population. It also includes Hughes and Yahsat’s three gateways in Brazil.

The JUPITER 2 satellite (designated EchoStar XIX) provides coverage over Mexico, where we have been providing broadband services via local service provider partners, and Colombia, where we launched HughesNet service in 2017.

In Colombia, we added additional capacity with Hughes 63 West, enabling the expansion of HughesNet service in the Colombian market. Our enterprise and government services in Colombia offer a valuable solution for projects like Mintic Wi-Fi access and school’s connectivity.

Recently, we began launching Hughes Express Wi-Fi service in Brazil and Mexico, bringing satellite-enabled Community Wi-Fi hotspots and the Facebook Express Wi-Fi platform to the market. Local merchant’s sign-up to install a Hughes VSAT and Wi-Fi AP at their business – a store or café, for example – and then use the Facebook Express Wi-Fi platform to manage the service and collect revenue on a per-user basis.

The launch of Hughes 63 West enabled us to offer broadband Internet service in several other countries in Latin America, including Chile, Ecuador and Peru.

Furthermore, with service provider partners and customers throughout the region, we offer ground equipment, capacity and solutions for extending broadband connectivity via cellular backhaul, community Wi-Fi and enterprise services.

For instance, Speedcast, a trusted provider of remote communications and IT solutions, chose the Hughes JUPITER™ System to power cellular backhaul over satellite and enterprise VPN services for a leading mobile network operator in Managua, Nicaragua. The operator will employ a JUPITER Ku-band hub and nearly 100 satellite terminals to expand its cellular 3G and 4G services in Nicaragua and throughout Central America, along with providing VPN services for enterprises to increase speed and security of critical business networks and grow new markets.

SES: We have extensive coverage covering Latin America and are more than equipped to be serving customers operating in all markets. To give an example of the different types of satellites we have – we have SES-6 who serves 100% cable headends in the region and SES-14, a high throughput satellite with spotbeams and widebeams. In addition, SES also has its fleet of O3b satellites, which are positioned in medium earth orbit (MEO) providing low latency and fiber-like managed connectivity services to individuals and businesses in the growing mobility, fixed data, and government markets.

In April 2019, SES launched four more satellites in the O3b fleet, increasing the number of O3b satellites to 20, marking the transition to the next generation MEO system, O3b mPOWER. The constellation’s seamless scalability means that additional satellites will increase coverage worldwide and allow the SES network to provide greater availability and reliability of services to meet the growing demand for connectivity services in the government, telecommunication, cloud, maritime, and energy markets.

Embratel Star One: Claro Brasil, through its Unit Embratel Star One, is addressing the Enterprise Market in areas not well served by terrestrial means by using satellites to provide services. For the Consumer Market Claro is reaching its customers by using cable and backhaul cellular network with 4G, to provide broadband services. Some of the 4G sites are being served by broadband satellite stations.

For the Enterprise market, in poorly served areas by terrestrial means, Claro Brasil is offering two products, the iPsat and the Infosat Prime

 1) IPSAT: We launched the new version of our IPSAT Satellite Broadband solution, now with the use of the Ka Band, especially to serve companies of various sizes and segments installed in locations with little or no telecommunications infrastructure. IPSAT provides quality Broadband Internet access with attractive speeds and prices. The new solution helps companies achieve digital maturity with secure, quality Internet, the basis for business scanning. We believe that the offer will bring digital transformation to businesses, including smaller ones located in regions far from major centers.

IPSAT in Ka Band is a Broadband service provided by the Star One D1 satellite, the largest ever launched by the company. With the novelty, we are expanding our offer, which is also provided in Ku Band.

The solution in Ka Band allows connection to the Broadband Internet of quality in diverse localities in all Brazil. Among the speeds commercialized are 20 Mbps (download) with 4 Mbps (upload) or 25 Mbps (download) with 4 Mbps (upload). It is also possible to contract a fixed IP, allowing reverse access configurations to the client network.

The new IPSAT with Ka Band expands the possibilities of high-speed Internet access for companies, even without the existence of terrestrial telecommunication infrastructure in the region, besides allowing the formation of a secure VPN network through the IPSec protocol. efficiently the Internet Applications of Things (IoT), which can use IPSAT stations as hub points.

At IPSAT, Ka Band will provide connectivity to a hub of IoT devices for communication with the world. For example, on a farm, we have a number of installed devices (such as tractors and other machines) that communicate over a land-based wireless network to a hub. This hub can be equipped with an IPSAT (Broadband Internet) that will take these signals to the point of interest.

We are making the use of broadband Internet via satellite more accessible to different types of enterprises. Available speeds are capable of serving a variety of business profiles, including those with the highest traffic demand.

 The companies can contract the solution in Ku Band, for areas that are not covered by Ka Band. IPSAT can also be used to back up existing data connections, ensuring business availability and reliability. The company believes that there is a repressed demand that can be met with the solution, even in agribusiness regions, very representative for the Brazilian economy.

 2) Infosat Prime in Ka Band: We have also recently launched the Infosat Prime Ka Band solution, a corporate data network offering. The offer is being made available on the Star One D1 satellite, the largest ever launched by the company. With the new modalities in Ka Band, companies installed in areas with little or no telecommunications infrastructure, such as gas station networks, commerce and hotels, can connect their central offices with satellite branches, transmitting information in real time. The Ka Band solution delivers speeds from 4 Mbps (download) with 1 Mbps (upload) or 8 Mbps (download) with 2 Mbps (upload), enabling high performance data network configurations.

Telesat: Satellite broadband requirements in Latin America are growing rapidly. To address this market, Telesat has seven (7) station-kept GEO satellites in operation that provide Latin American services:

Telstar 12 VANTAGE at 15^o West, Telstar 14R/Estrela do Sul 2 at 63^o West and Anik F1 at 118.7^o  West all have full South American coverage in Ku-band.

Anik G1 at 107.3^o  West has full South American coverage in both C-band and Ku-band.

Telstar 11N at 37.5^o  West has full Ku-band coverage of Central America and the Caribbean and Anik F3 at 118.7^o  West has full Caribbean coverage in both C-band and Ku-band.

Telstar 19 VANTAGE at 63^o  West is Telesat’s newest satellite serving the region. It entered service about a year ago and operates from Telesat’s prime orbital location of 63^o West, the same as Telesat’s highly utilized Telstar 14R/Estrela do Sul 2 satellite. Telstar 19 VANTAGE is a state-of-the-art spacecraft that has two high throughput satellite (HTS) payloads over Brazil, one in Ka-band and one in Ku-band. As previously announced, Telesat customer Hughes Network Systems LLC (Hughes) has signed a 15-year agreement for Telstar 19 VANTAGE Ka-band capacity which Hughes refers to as Hughes 63^o West. Hughes is utilizing this capacity to expand its broadband satellite services for consumers and businesses in South America.

Telesat VANTAGE satellites represent a new generation of spacecraft optimized to serve the types of bandwidth intensive applications increasingly in demand across the satellite industry by combining broad regional beams and high throughput spot beams to maximize throughput and spectral efficiency. The Ku-band HTS payload on Telstar 19 VANTAGE is fully compatible with the large, installed base of VSATs across the region and provides a smooth, seamless transition to HTS capacity for customers ready to benefit from the improved performance of the new Telstar 19 VANTAGE satellite.

The 63^o West slot has become a preferred location among leading satellite service providers who rely on Telesat´s Telstar 14R/Estrela do Sul 2 to support tens of thousands of sites across South America. By having both Telstar 19 VANTAGE and Telstar 14R/Estrela do Sul 2 at 63^o  West, Telesat customers have greater choice and capability to bring the very latest in broadband satellite networking to their end users.

VIASAT: Viasat has strong growth ambitions to bring satellite broadband to the Latin American region.

Today, the company’s ViaSat-2 satellite (total network capacity ~260 Mbps) delivers broadband services to some key areas within the Latin American region. The satellite currently services North America, Central America, the Caribbean, a portion of northern South America as well as the primary aeronautical and maritime routes across the Atlantic Ocean bridging North America and Europe.

Finally, Viasat is focused on expanding its satellite internet service into all of Latin America. The company has announced its ViaSat-3 constellation, which consists of three ViaSat-3 class of Ka-band satellites for global coverage. The first satellite to launch in this constellation is aimed at providing broadband services to the Americas.

SM: What county or region in Latin America you expect more investment for the next five years considering potential long-term growth?

ABS: In Latin America, ABS consider Brazil as the highest potential for growth in the next few years.

Hispamar: Mexico, Brazil, Colombia and Peru. And we always have the incognita of Argentina, because of economic problems and not of demand.

Hughes: We continue to explore opportunities to extend connectivity throughout the region, directly and with our customers and partners. With the launch of JUPITER 3 (designated EchoStar XXIV), we will bring even more capacity across Latin America, enabling higher speeds to our subscribers.

SES: Considering the growth potential and the investments that SES has already made, we see that the priority markets are Brazil, Mexico, Colombia, Argentina and Ecuador. Case in point would be the announcements we have made recently: SES and INRED in Colombia announced the partnership to enable 1,000 free Wi-Fi access points in rural areas and throughout the country as part of the Sustainable Universal Access project. In Brazil, SES is also working alongside Briskcom to offer VNO services in the country as of last month and has launched a new Ku-band free-to-air satellite solution via SES-10. Last but not least, we announced in June the launch of a new video platform with SERSAT in Argentina, that will deliver content more easily across Latin America on SES-14.

SES continues to study the market and wider region seeking new opportunities to diversify our portfolio and offer services with added value to our customers and partners.

VIASAT: Viasat is focused on expanding its satellite internet service into all of Latin America. The Company has announced its ViaSat-3 constellation, which consists of three ViaSat-3 class of Ka-band satellites for global coverage.  Specific to Latin America: the first ViaSat-3 class satellite is focused on the Americas, and is expected to launch in 2021. The constellation is expected to provide unprecedented capabilities in terms of service speed and flexibility for a satellite platform. The first satellite will focus on the Americas; the second will focus on Europe, Middle East and Africa (EMEA), and a third satellite is scheduled for the Asia Pacific (APAC) region, completing Viasat’s global service coverage. Each ViaSat-3 class satellite is expected to deliver more than 1-Terabit per second of network capacity, and will leverage high levels of flexibility to dynamically direct capacity to where customers are located.

SM: Any other solution or technology you are planning to implement in Latin America in regards of Broadband via Satellite (OTT, IoT, Internet direct to user or corporate via satellite, DTH, Backhaul and others)?

ABS: More than technology, ABS believes that flexibility and the capability of providing cost-effective solutions to address the market in partnership with our customers is going to be the key to growth in the next 5 years – helping our local partners in the development of flexible services by sharing part of the risks is going to be key in developing solid relationships and growing the market.

Hispamar: Yes, in the video part we are in the finalization phase of a product that will be released soon, we cannot talk much yet.

In the data part, we perceive a growing demand for backhaul services but in a more participatory model, not only buying MHz but a more direct apprehension in the business of our client, the market is changing and we have to adapt with our products so we can offer something worth to our clients.

Hughes: HughesNet continues as the leading consumer satellite broadband solution with more than 1.3 million subscribers across the Americas including more than 150,000 in Latin America. The Hughes JUPITER System is in use to backhaul cellular sites across Africa, Asia and Latin America, including the project with Speedcast in Central America as well as important carrier class backhaul projects in Bolivia in Ku-band supporting more than 500 3G sites and in Peru in Ka-band capable of backhauling 2G, 3G, 4G/LTE – and 5G-ready.  The JUPITER System offers a low-cost and effective means for connecting base stations everywhere in Latin America, regardless of distance, infrastructure or terrain.

Our satellite-enabled Community Wi-Fi hotspots are helping connect the unconnected – especially in remote and rural areas where options for connectivity are limited due to lack of terrestrial infrastructure. These hotspot solutions can be merchant-sponsored – as in the case of the Hughes Express Wi-Fi solution that uses the Facebook Express Wi-Fi platform – or government subsidized and offered to the public for free or a reduced cost – often in partnership with a telecom company to bridge the digital divide by delivering broadband Internet service at government-sponsored locations (e.g., schools, libraries, health centers, community centers). So far, Hughes-enabled Community Wi-Fi Hotspots extend connectivity to more than 25 million people around the world.

SES: SES is not only offering services but working on developing the ecosystem allowing for competitive prices, flexible solutions and added value to all our customers in the region. We want to provide managed services to them so that we can adequately solved of their business challenges and enabled them to be focusing on growing their reach and markets.

One good example is how we are investing in new video ecosystems. We have an impressive network of interconnected media centers located worldwide in Israel, Germany, London, US and Brazil, allowing us to be well-placed in the hybrid content delivery services and solutions space. Services that we deliver include content preparation, localization, streaming for both VoD and Linear OTT streaming.

We have recently launched OU Flex, an IP video platform for Occasional Use application, enabling customers to have access to broadband wi-fi at the premise of the event where they can complement the main video with a second screen and ingest directly in the social media sites, among other things.

We will be launching SES’s next-generation MEO system O3b mPOWER in 2021, bringing high-performance connectivity to millions of people and places around the world. O3b mPOWER will be more than a satellite constellation - it will be an ecosystem of end-to-end managed data services. The O3b mPOWER system will combine innovative technological advancements with a proven scale model to redefine network services around the world.

Embratel Star One: Embratel Star One has a complete roadmap under development for the next few years that will firm the company more and more as an integrator. On the satellites side, we intensified the use of satellite capacity of our fleet to meet Claro’s cellular backhaul demands. We will continue to expand the service in Ku Band and also in Ka Band for cellular backhaul. Satellite backhaul is the best solution whenever there is a need for fast response and / or cost of extending the reach of the fiber network or radio until the site is considered elevated. With the use of the satellite it is possible to attend any place in the national territory quickly, allowing users to enjoy the service, no matter where they are. The main virtue of this solution is therefore to contribute to a greater number of people having access to a cellular telephone service area. Without the satellite, they might be years without access.

Among the new features for 2020, we will launch Star One D2, the second satellite of the fourth-generation fleet, called the D family, the largest satellite ever made for our company. Occupying the orbital position of 70 ° W, where all the major TV stations are open, and more than 25 million satellite dishes (TVROs), the new satellite will be equipped with the Ka bands, to meet the demands of Broadband Internet, backhaul of cellular, C and Ku, complementing the offerings of capacity for data, video, Internet of corporate clients and cellular backhaul.

Star One D2 will also ensure the continuity of Star One C2’s C-Band and Ku-band services. With the Ku Band, the satellite will provide data, video and Internet capacity to Government agencies and large companies from various sectors of South and Central America, including Mexico, as well as to enable the transmission of Pay-TV signals. Open TV signals will be guaranteed by Band C.

Telesat: Telesat is developing a revolutionary Low Earth Orbit (LEO) satellite constellation that will deliver an unmatched broadband experience – affordable, high throughput, ultra-low latency, resilient, secure and with ubiquitous coverage – and disrupt the performance and economics of Internet connectivity throughout Latin America and the rest of the world.

Telesat’s LEO constellation will provide high performing and affordable global broadband from LEO satellites operating in both polar and inclined orbits.

Telesat’s LEO constellation will transform global communications by leveraging the company’ priority spectrum rights in Ka-band and patent-pending LEO architecture. Our LEO system will offer a combination of capacity, speed, security, resiliency and affordability with latency equal to, or better than, the most advanced terrestrial networks. Able to serve the entire globe, Telesat LEO will help satisfy many of the world’s most challenging communications requirements. It will bridge the digital divide with fiber-like high speed services into rural and remote communities, accelerate 5G expansion and set new levels of performance for commercial and government broadband connectivity on land and in key maritime and aeronautical markets, which are among the fastest growing in today’s satcom industry.

We are looking at a target service-start date for Telesat LEO service at the end of 2022 with an initial constellation of approximately 200 satellites in orbit.

VIASAT: Currently we are proud to offer Community Wi-Fi services in Mexico, Brazil with other markets in Latin America soon to launch.

Community Wi-Fi can help millions of people globally get connected—even those with little or no opportunity for quality internet access either because of the lack of terrestrial infrastructure or because the internet service offered in their communities is too expensive.

By launching Community Wi-Fi, Viasat can provide a way for people to connect to the internet at affordable prices. They can communicate with family and friends, access educational study materials, participate in e-healthcare initiatives, enhance their career opportunities and even participate in e-commerce and online banking programs.

Viasat’s Community Wi-Fi hotspot service is highly-scalable. It can be deployed with minimal local infrastructure investment, in order to quickly bring cost-effective internet service to locations where large gaps exist between demand, affordability and availability of internet services. Service can be installed in a few hours at strategic locations within a community. Typical installations are conducted in partnership with a centrally-located community business (e.g. general store), with internet services sold in either data or time-based packages, and availability of those services reaching deep into the community footprint.

Mexico was the first country to receive Viasat’s Community Wi-Fi hotspot service, which was officially launched in 2018. Currently, more than 1.5 million Mexicans living in communities that previously had little or no internet connectivity, are now within walking distance to a Viasat Community Wi-Fi hotspot.

Brazil will be the second country to receive Viasat’s Community Wi-Fi hotspot service. Beginning in July 2019, Viasat launched a trial program, deploying free Community Wi-Fi hotspots, with speeds up to 25 Mbps, in 20 unserved or underserved communities in the state of São Paulo. The company intends to expand the service to Brazil’s Northeast region later this year.   

-------------------------------------

Bernardo Schneiderman is the Principal of Telematics Business Consultants and a Contributing Editor to Satellite Markets and Research.  He can be reached at: info@tbc-telematics.com