Are you Ready for the Gigabit World?
by Robert Bell
New York City, October 3, 2012--Put together Tooway, Exede, EPIC, Hughesnet, Hylas, Jabiru, NS3 and Clear Channel, and what have you got? You probably recognize the brand names, because of the accelerating pace of announcements about Ka-band satellites and higher-order modulation emerging from satellite operators and technology companies. And if they have given you the feeling that the satellite business is bracing for some big changes, you’re right.
Just how big that change will be is the topic of the day. WTA has just published a report, Teleports in the Gigabit World, for which we interviewed top executives from satellite operators, teleport operators, technology companies and customers. Picking up from our Ka-Band and the Teleportstudy in 2010, it explores how the continuing evolution of the high-throughput satellite (HTS) is mostly likely to affect ground-based service providers. It examines the threats and potential opportunities and offer advice on what service providers can do today to defend against the downside and seize the upside.
There is a potentially a lot of upside to seize. Our experts see transformative growth opportunities in media & entertainment, government & military and remote and mobile communications. They predict that these technologies will, for the first time, make satellite cost-competitive with fiber in applications where it is not today. That’s revolutionary.
The big drivers of this change are bandwidth and architecture. The potential for much, much higher throughput on Ka-band – but also on Ku and C – will change the economics of the business. In the short term, it will let us do more of what we already do – such as giving an enterprise customers 40-50 Mbps at a competitive price, instead of the 4-5 they use today. In the long term, it should generate opportunities to sell completely new applications to new market segments – and to find ourselves competing with companies we have never faced before.
The first generation of Ka-band HTS have been designed to provide consumer broadband. To get the throughput and price-point they need, they have established closed networks which can be accessed by a fixed number of gateways. No other teleports need apply. We asked our experts if they thought this would become the dominant architecture of the future – which could spell trouble for teleport operators – or if other architectures would evolve. As the American baseball player Yogi Berra once said, “It’s tough to make predictions, especially about the future.” But our respondents did, and you can decide how close to the mark they got.
Whatever their views – and they ran the gamut – our respondents were united in providing some good advice for service providers.
Bet on Change. In both the short and long terms, HTS will create winners and losers in the market, and service providers need to think through what it takes to be on the winning side.
Prepare to Sell New Applications to New Customers. If the prophets of HTS revolution are correct, the satellite services business may well see its best growth opportunities in completely new lines of business. That is a major challenge to any company. You will need to stay alert to opportunities that might have seemed absurd in the past. They may still be absurd now, but they might just be a door opening to a new market.
Prepare to Compete with New Players. As HTS continues to evolve, satellite service providers are likely to compete with companies they have never faced before. Succeeding in these markets may require teleport operators to do something they have typically shied away from: investing in their own proprietary solutions. And creating your own technology solutions may require very different skills in business analysis, planning and operations.
My thanks to Eutelsat, with its KA-SAT satellite providing 90 Gbps of capacity over Europe, for underwriting Teleports in a Gigabit World. The study is available free to members of WTA and for purchase from http://www.worldteleport.org/. For a quick video introduction, go to http://youtu.be/el5bz7d7hH4.
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Robert Bell is Executive Director of the World Teleport Association, which represents the world's most innovative teleport operators, carriers and technology providers in 20 nations. He can be reached at: rbell@worldteleport.org
