Europe has certainly delivered more than its share of headline grabbing news this last year. Most of it very negative and focused on the economic problems of some its member states. In the satellite world while attention is being given to teleport consolidation and the potential impact on Satcoms resulting from troop withdrawal from the Middle East and Afghanistan the major headlines have centered around two topics: Navigation and Broadband. On the whole the news has been more positive, even if laced with a hefty dose of skepticism at times.
After numerous delays putting the system nearly ten years behind schedule the first two Galileo satellites were finally launched in October of this year. The launch itself was historical taking place in French Guiana on a Soyuz rocket. The ESA first started investigating the possibility of using French Guiana for Soyuz launches in 1998 and construction on the launch pad, located 13 kilometers from the Ariane 5 complex started in 2005. The Galileo launch was the inaugural launch at that facility.
Back to Europe and the Galileo project. Like many multi-satellite constellations Galileo has suffered significant cost overruns and had to deal with political pressure both from within Europe and from the USA. Following the 9/11 attacks the US wanted Europe to abandon the system arguing that it needed to be able to shut down navigation systems in times of crises – the very same reason that prompted the project in the first place. Namely that Europe was concerned about its dependence on the US and Russia for satellite navigation and wanted an independent system. Following negotiations an agreement was signed with the US in 2004 allowing for the combined use of both systems. With the two systems working together Sat-Nav should work well in even dense high-rise areas. Galileo itself is designed to be accurate to within one meter (compared to within several meters for civilian GPS).
Three services will be provided: A free service available to anyone with compatible Sat-Nav equipment, an encrypted service for use by government agencies and a Search and Rescue (SAR) service which would send a return signal to for example maritime users letting them know that their distress signal and location had been noted and help was on its way. However the first two satellites were launched with dummy SAR payloads as these were supposed to come from China but recent technical and political issues mean that an alternative source is now required.
The two satellites launched this year will be joined by two others in 2012 and these four known as the pathfinders will be used for in-orbit-validation (IOV) to verify that the system works as intended. An additional 14 satellites are planned to be launched by the end of 2014. These 18 satellites are estimated to cost €3.4B which has been allocated. The 12 others required to complete the constellation require an additional €1.9B. Given the financial difficulties facing Europe at present it is hardly surprising that finding the additional funding is meeting with stiff opposition from member states. However in June of this year Mr. Tajani European Commission Vice President who has overall responsibility for the project, announced that significant cost savings had been identified which meant that funding for six of the twelve additional satellites was available. A competition to procure the next 6 satellites was announced in October. Although the system will not perform as specified, with 24 satellites in orbit users will see an improvement in accuracy compared to GPS alone.
Although member states are reluctant to provide additional funding for the project a report earlier this year from the EC estimated that around 6-7% of Europe’s GDP i.e. over €800B was now dependent on Sat-Nav data. Nevertheless since this is currently supplied by GPS the rationale remains largely a political one.
Broadband is the hot topic around the world, but nowhere more so than in Europe with two dedicated Ka-Band satellites initiating service this year and other satellites with Ka-Band payloads in the offing. Couple this with the European Commission being very vocal on the subject and you can understand why it is attracting attention. According to Neelie Kroes, European Commission Vice President responsible for digital matters, around 5% of European households i.e. 10 million do not have access to broadband at all. (Other estimates put the figure even higher). That is a large enough market to support several dedicated Ka-band satellites.
The two dedicated satellites are very different birds. Eutelsat’s KA-SAT was the first High Throughput Satellite (HTS) launched and can accommodate up to 1M users at download speeds of up to 10Mbps. Its footprint stretches from northern Africa to southern Scandinavia. The service is distributed through Tooway dealers, at least one of whom is aggressively targeting rival SES’s broadband customers by offering to swap equipment free of charge. At the beginning of November when Eutelsat released its earnings statement for the first quarter of its financial year 2011-12 it stated that ramp-up on Tooway was as expected and it was on target to meet revenue expectations – previously stated as an extra €100M in incremental revenue in year 3.
Avanti’s Hylas 1 is a “conventional’ Ka satellite with 8 spot beams covering the UK and capacity to serve up to 350K users at download speeds of up to 10Mbps. Since there are approximately 3M unserved households in the UK at the right price and with good marketing and distribution it should have no difficulty in finding customers. However the key as always is “at the right price” a quick glance at dealers’ websites in the UK indicate that for £26 you can get 4Mpbs down and 1Mbps up with a 4GB monthly cap from Avanti and for £25 per month you can 6Mbps down and 1Mbps up also with a 4GB cap from Tooway. Not a difficult decision! Which probably explains why David Williams, CEO of Avanti has stated that he expects only 25% of Hylas capacity will be used by consumers and enterprises. (The rest he projects will be used by backhaul, government and military and edgecasting)
The definition of broadband seems to change on an almost daily basis, with consumers and businesses expecting faster speeds in order to download (and in many cases upload as well) greater volumes. At the end of last year the UK government was talking about its ambitions to provide every household in the UK with a broadband connection by 2015. Broadband was defined as a minimum 2Mbps connection. In October of this year the EC proposed investing €9.2B with the aim of getting every household in Europe on a 30Mbps connection by 2020 and half of them on a 100Mbps connection.
That as much as anything will probably be the deciding factor in determining the success or otherwise of Ka satellites. If and it is a big IF particularly given the economic problems in Europe, rival terrestrial services do gear up to provide 30Mbps in most areas (that speed is already available in most urban areas) and do so at an affordable price will satellite once again be seen as too slow and too expensive in comparison?
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Elisabeth Tweedie has over 20 years experience at the cutting edge of new communication and entertainment technologies. She is the founder and President of Definitive Direction a consultancy that focuses on researching and evaluating the long term potential for new ventures, initiating their development and identifying and developing appropriate alliances. During her 10 years at Hughes Electronics she worked on every acquisition and new business that the company considered during her time there. www.definitivedirection.com She can be reached at: etweedie@definitivedirection.com
