Opportunities in the Satellite Ground Segment Market

by Dan Freyer

Los Angeles, Calif, January 3, 2019--The Satellite Executive Briefing spoke with executives from large and emerging ground equipment supplies about challenges and opportunities they are seeing in global and European markets.

Not surprisingly, mobility continues to be a growth engine across the board, with in-flight (IFC) a sought-after, if challenging opportunity. Export opportunities into and from Europe remain strong for suppliers in terrestrial wireless backhaul. HTS architectures and new constellations have suppliers’ attention as Ka-Band systems continue to deploy for broadband consumer, enterprise, and even interactive IP DTH systems in emerging markets.

Mobility Is King

In its June 2018 State of the Satellite Industry report, the Satellite Industry Association, a U.S. trade group, reported a 5.6% year-on-year increase for industry ground equipment revenues including GPS equipment to $119.8 Billion in 2017.

According to another market research report conducted by global broadband VSAT supplier, Gilat Satellite Networks, Ltd, satellite bandwidth capacity is expected to expand from 439 Gbps to 4.8 TBps between 2016 to 2023. “The highest growth segments moving forward are the IFC (Aero) and backhaul segments, while the Enterprise and Maritime segments are expected to remain flat. Consumer broadband will continue to be the largest segment, although its share is expected to drop substantially over the period” says Doreet Oren, Director Product Marketing & Corporate Communications for Gilat Satellite Networks. The company’s portfolio includes cloud based VSAT network platform, high-speed modems, on-the-move antennas and high efficiency, high power Solid State Amplifiers (SSPA) and Block Upconverters (BUC).
The company is focused on three segments: In-flight Connectivity (IFC), cellular backhaul and consumer broadband access for its Gilat’s SkyEdge II-c multi-service ground segment platform with X-Architecture.

Aeronautical (Aero) IFC Segment

Other providers agree that IFC is hot. With potential demand for thousands of aircraft systems yet to be purchased and deployed, the opportunity is enormous, and competition is fierce, vendors say.

“The fastest growing market globally is for in-flight connectivity as part of the mobility market,” says Heidi Thelandar, Sr. Director of Business Development, Comtech Xicom Technology. The company, a unit of Comtech, is a leading supplier of tube-based and Solid State Power Amplifiers (SSPAs), and Block Upconverters (BUCs) for commercial and military satcoms, with power levels from 8 W to 3 kW, and frequency coverage within the 2 GHz to 52 GHz spectrum.

“The in-flight connectivity satcom market was almost nothing just a few years ago,” says Thelander. “A wide range of companies, business models, and solutions have been created to address the market. Airlines and end users are having to sort through all the options available to them to find what works best. This market is expected to continue expanding, adapting, and eventually focusing on the most promising business models and solutions.”

Delivery of uninterrupted Internet connectivity for hundreds of passengers over the course of a ten-hour transcontinental flight is a complex undertaking. “Ensuring uninterrupted connectivity during a long transcontinental flight requires the onboard antenna to be able to "talk" to multiple satellites along the way, in Ka and/or Ku band. Particularly when working with narrow-beam HTS satellites, IFC providers need to seamlessly switch between beams and satellites as the plane travels,” explains Gilat’s Oren.

Gogo, which operates one of the world's largest global satellite networks for IFC, began upgrading the majority of its fleet to using Gilat’s modem during the past year for use with GoGo’s 2Ku service. Gogo has deployed Gilat's hub platform at 15 locations worldwide and uses capacity from over 25 satellites. Gogo announced that Gilat's modem can deliver more than 16x the throughput of GoGo’s previous modem. Gilat’s end-to-end broadband solution for In-Flight Connectivity includes both airborne components and a complete ground segment infrastructure. The airborne components include Ku/Ka antennas, Wavestream transceivers and the Taurus MODMAN (modem manager), which have been installed in hundreds of Boeing, Airbus and other types of commercial aircraft.

LTE Backhaul

“In general, the worldwide mobility segment is the fastest growing segment for our business,” according to Doreet Oren. “It has expanded from $63M in 2016 to $80M in 2017. We forecast continued revenue growth in this segment expecting around $100M in 2018 from the worldwide mobility segment,” says Oren. In May 2018, Gilat reported first quarter 2018 revenues totaled $67.4 million, up 5.4% on the prior year, with around 40% revenue growth in its Fixed Networks and Mobility segments.

“The European market represents a substantial share of Gilat's total revenues and we expect this market to continue to expand. Most of our revenues in Europe come from consumer broadband and cellular backhaul applications. In Europe, as well as globally, we focus on cellular backhaul solutions for mobile network operators (MNOs), as well as consumer broadband access solutions.”

According to the Oren, among VSAT players, Gilat leads the global cellular backhaul LTE market, having projects with Tier-1 MNOs worldwide such as Optus in Australia, SoftBank and KDDI in Japan, Globe in the Philippines, Sprint and T-Mobile in the United States, and others under its belt.

In Europe, Everything Everywhere (EE), part of the BT Group, is using Gilat's satellite backhaul solution over high throughput satellites with a goal of extending its LTE network coverage to over 95% of the UK landmass by 2020, while enhancing network resilience and backup. Another European backhaul customer deal noted recently by CEO Yona Ovadia to shareholders, is a backhauling deal for critical communications with Altice in Portugal.

Another player perceiving continued demand from backhaul applications is Quintech Electronics & Communications, Inc., a leading supplier of RF signal management equipment including L-Band RF matrix switches used in teleports, NOCs, cable head ends and broadcast facilities around the world. According to David Chan, Vice President of Sales & Marketing for Quintech, “We see the bandwidth for cellular backhaul and IPTV continuing to increase, while the bandwidth for broadcast and CATV programming remaining flat.”

Room for Innovation

Although the VSAT market is dominated by long-established large supplier like Hughes, Gilat,and iDirect, which collectively shipped about 87% of terminals in 2016 according to Comsys, the growing pie, along with new architectures in has left room for new players to gain and sustain traction in different segments.

Smaller players have focused on specialized applications, such as defense networks. An example is Canadian supplier Advantech Satellite Networks, headquartered in Dorval Quebec. The new company was spun out of Advantech Wireless, which sold its microwave and other business earlier in 2018 and according to Comsys VSAT Reports had a 2.5% global market share in 2016 shipments. Advantech Satellite Network’s ASAT II™ WaveSwitch™ technology allows-on-the-fly waveform switching between low-footprint MF-TDMA connectivity and high-throughput dedicated SCPC links that can be required for applications such as C4 video streaming from field-deployed troops, UAVs and land-mobile vehicles to command centers. “ASAT™ dynamically allocates bandwidth from a single shared bandwidth pool for highest efficiency,” explains Managing Director, Assaf Cohen. Patforms that partition waveforms to separate pools suffer from reduced efficiency and require additional management, according to Cohen. “In contrast, Advantech Satellite Network’s ™3D BoD™ and WaveSwitch™ provide multi-dimensional on-demand capacity assignment (SLA, demand and seamless waveform optimization), which delivers optimum efficiency. For mobility, we can save up to 30-50% of bandwidth as the dimensions can be modified on the fly via a single algorithm in our technology,” he says.

A relatively newer player in the VSAT marketplace, UHP Networks manufactures VSAT equipment with a unique software-defined architecture, and a stated ambition to disruptively innovate in the VSAT industry.

The company offers complete network solutions based on its product line of UHP (Universal Hardware Platform) satellite routers and NMS (Network Management System). UHP Networks has been growing at an annual average rate of 40% over the last 4 years. It has installed more than 300 networks in 45 countries. The company shipped 10,000 remote terminals and 31 Hubs in 2017 alone. Around 30% of its business comes from Europe today.

“Our solutions have superior scalability and unparalleled price/performance characteristics,” says Dr. Vagan Shakhgildian, CEO/President of UHP Networks. “The UHP design has up to 10 times higher packets-per-second processing (PPS) capability and up 20% greater TDMA bandwidth efficiency than the nearest competitor. Each system module can be dynamically configured to operate as Star or Mesh terminal, High-speed SCPC modem or a node of a Hubless TDMA network or an element of TDM/TDMA VSAT Hub,” Shakhgildian says.

At IBC 2018 in Amsterdam, UHP networks plans to demonstrate its latest, a very-high speed 430 Msps DVB-S2X forward link that will work with existing UHP-100 and UHP-200 satellite routers and the company’s new multi-service Hub.

Smaller, Lighter, Rounder and Flatter

Industry opportunities have also attracted new players in the RF and power amplifier market despite a strong base of well-established suppliers such as Communications and Power Industries (CPI SMP), Wavestream (Gilat), Comtech Xicom, Paradise Datacom, Advantech Wireless and others.

An example is Mission Microwave Technologies, LLC headquartered in Santa Fe Springs, CA. Founded in 2014 by industry executives, the company has developed X, Ku, Ka-Band BUCs and SSPAs from 12 to 400 Watts, and is focusing on what it calls the industry’s most efficient, lightweight, and compact power SSPAs for commercial, military and space customers. According to Steve Richeson, VP Sales & Marketing for Mission Microwave, “An example is our 200 Watt Ka Band unit that weighs only 10 kg. An operator can literally carry one to install it on an uplink. Competitive BUC s in this range would require a mechanical lifting device.”

Mobility requirements for light, power efficient RF packages continue to push technology suppliers towards innovation and improvements in performance.

Over the past year, Mission Microwave introduced its one-inch thick GaN BUCs, called Flatpacks, for portable terminals, as well as SSPA products with integrated BUCs in a unique cylindrical form factor. According to Richeson, requirements that make Mission Microwave products attractive for mobile and portable applications are the same globally – design, weight / size, and efficiency.

“On the mobile and portable side, we see a growth in the fly-away and transportable business. End users of these terminals now regularly ask integrators to use our products, knowing that any other choice leads to a larger and heavier system design,” says Richeson. “Customers are finding these fly-away terminals to be easier to manage and deploy than truck-based systems.” Richeson is bullish on the start-up company’s growth potential in Europe. “We see tremendous innovation in payload designs from European Satellite operators that can take advantage of very sophisticated ground terminals.”

AnchorSoftware Defined Networks (SDR) and Software Defined Networking (SDR)

To integrate with terrestrial solutions, satellite network equipment providers have added Virtual Networking, Software Defined Networking (SDN), Software Defined Radio (SDR) and Cloud capabilities to their product lines.

Employed in terrestrial as well as space communications, Software Defined Radio (SDR) technology uses software to replace hardware components in order to offer increased flexibility and reduce costs in radio systems. SDR technology lets operators more flexibly digitize their RF signals so equipment can adapt to communications across various modulation schemes such as satellite air interfaces, wireless protocols like LTE and other radio protocols by software instead of replacing radio hardware.

SDR requirements have spurred demand, for example, for Quintech Electronics & Communication, Inc. RF and Wireless Test Lab systems that help terminal and network designers more efficiently test and validate different device and performance features. According to David Chan, VP Sales & Marketing for Quintech, “We are seeing greater usage of software defined radios (SDR) and networks (SDN). Deployment of these technologies requires significant certification testing that involves costly field trials.” The company’s Laboratory Automation and Management Platform, Q-LAAMP®, is a software package used with Quintech’s NEXUS RF Matrices that significantly increases lab efficiency and reduces test time, enabling cost savings and faster time-to-market. “We have seen an increase in requests for lab mesh matrix switches that can emulate free space over coaxial cable to prove out the SDR and SDN prior to the field trials,” says Quintech’s Chan.

Software Defined Networks (SDNs) enable cost-savings, flexibility, and operational benefits by replacing hardware functions with software features in telecoms networks. Satellite communications networks are keeping pace. An example is Gilat’s X-Architecture, an SDN-based distributed network architecture. It provides operators with a single platform for multiple applications including fixed (e.g., cellular backhaul) and mobility (e.g., IFC) satcoms use cases. X-Architecture includes a global central management system, supporting any number of teleports and utilizing any number of satellites and satellite beams while ensuring resiliency and redundancy. Transparent switchover between beams, satellites and gateways, while maintaining user application sessions, to ensure end-user service quality.

Also using SDN, UHP Networks recently introduced its Smart Redundancy system design for Hub redundancy to leverage the Software-Defined Architecture of its products. According to the company this dramatically reduces implementation costs for a distributed network of redundant Hubs or master controllers

Cloud Compatible

As enterprises migrate functions to private, public, and hybrid cloud-based terrestrial networks, in order to stay competitive, satellite data network architectures are incorporating cloud-capabilities that have gained ground in terrestrial environments.

For example, to lower the cost of ownership, UHP Networks uses its own cloud-based network management system for VSAT networks. Network management is carried out through the cloud-NMS which provides the necessary Functionality as a Service (FaaS) and also allows customer to manage the network with online support from UHP Networks’ NOC, according to the company.

UHP is not along in the trend to integrating cloud networking technology. Gilat’s X-Architecture also allows centralized data processing sites with a scalable, cloud-based design and Network Functions Virtualization (NFV). Global bandwidth management is supported by Gilat’s Cloud Quality of Service (QoS), enabling service providers to provision and manage bandwidth across multiple teleports, satellites and user beams from a central NMS.

HTS Architectures: More Beams, Q/V-Band

Executives say the industry is on the verge of a transformation with the expected abundance of GEO, VHTS (Very High Throughput Satellites) and Non-GEO constellations. Low and medium earth orbit (LEO/MEO) systems consisting of hundreds or thousands of satellites offer big potential sources of new business for ground technology suppliers, from terminals to RF subsystems to many other network elements and solutions.

“As the number and size of MEO and LEO constellations increase, we are seeing the number of earth terminal gateways increasing,” says Quintech’s David Chan. “This is driving the teleport markets toward a greater number of beams resulting in the need for larger configuration matrix switches. Our patented technology allows Quintech to offer COTS matrix switches with any number of input and output ports (in groups of 8) for a total of 256 per chassis. This lets customers fit all their ports into a single chassis more flexibly, while saving costs and minimizing the amount of required rack space,” according to Chan.

Another big HTS trend that is accelerating is the move to add more and more capacity at higher millimeter wave frequency bands. Constellations are adding Q/V-band payloads to upcoming satellites, in addition to the general expansion into Ka-Band in recent years. To meet potential demand for frequencies once reserved for military, experimental satellite, or terrestrial applications, RF suppliers are tooling up for these new requirements.

For example, Comtech Xicom is moving quickly to offer products at the newer Q/V-band frequencies, building on its Ka-band and Q-band HPA production experience. “Continued proliferation of the HTS systems and new architectures means that the market for high power gateway amplifiers in Ku and Ka-band, as well as new V-band amplifiers, will show further growth,” says Comtech Xicom’s Thelander. To enable gateways at higher frequencies, the company is developing amplifier and converter solutions, including a new 250W V-band TWTA (47.2-51.2 GHz ITU band for satcom) and new multi-band switchable converters.

Looking Ahead: Staying Competitive with Terrestrial Technology.

Industry participants also see next generation electronically-steered array/phased-array antenna (ESA/PAA) technology becoming more valuable as Non-GEO satellite networks expand. On-the-move applications, and IFC in particular, benefit from aerodynamic, flat antennas that can be electronically-steered with no moving parts.

According to Gilat’s Doreet Oren, “Electronically steerable beam capabilities of ESA/PAA (electronically-steered array/phased-array antenna) antennas better accommodate the need for intensive and robust multi-beams and satellite tracking that are required in the lower and medium orbit constellations.”

As the demand for broadband continues to grow across markets and applications, she believes that VHTS satellites will play a large role in delivering superior quality, high throughput services. “Looking ahead, we expect to see more and more hybrid GEO-NGSO networks leveraging the advantages of multi-orbit constellations, as well as integrated satellite-terrestrial networks. Leveraging the low latency of NGSO, we believe that satellite will play a major role in 5G deployments as well as loT/M2M applications. All these will serve to meet the challenging requirements of growing broadband usage, users and markets, which are characterized by high data rate, high spectral efficiency, high mobility and high cost-efficiency.”

The exponentially increased the supply of satellite capacity worldwide has made satellite an economically viable alternative for broadband connectivity, industry players say. But to keep pace with the new technical and market challenges in this dynamic environment, ground technology suppliers will need to continue driving down costs and increasing performance and utility.

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Dan Fryer is the Principal of AdWavez Marketing LLC, (http://www.AdWavez.com), a Los-Angeles-based boutique PR and marketing agency uniquely focused on helping space and related technology organizations expand their customers and markets. He brings over 20 years of experience helping leading satellite manufacturers, operators, and service providers grow their businesses. He can be reached at dan@adwavez.com.