Why satellite constellations are battling with the limitations of today’s flat panel antenna market
When I think of the new wave of constellations and high-throughput satellites in our industry and the enormous potential to change the telecommunications landscape, I fear past mistakes of former satellites will hold to one unfortunate truth: history often repeats itself.Think back to the 1990s when all the talk was about the development of satellite constellations to provide telephone and data services.
The demise o f the constellations born in the 1990s was a lack of ground infrastructure investment and devices completely mismatched with the investment being made in space.
The most notorious of those was Teledesic, which staked the ambitious plan to launch and operate almost 1,000 satellites for high-speed data services, but never got off the ground. Others such as Globalstar and Iridium deployed their systems, but survived only as a result of Chapter 11 bankruptcy protection and considerable write downs, revaluing those systems at little more than 20 cents to the dollar.
Today, constellations are making a huge resurgence. As the ‘big four’ satellite operators enhance their global GEO fleet coverage with next-generation spacecraft, new independent companies are planning to compete with those GEO-HTS systems, as well as the geosynchronous satellites that remain the backbone of commercial satellite communications today.
But, will history repeat itself? And if not, what is the fly in the ointment? What will the new generation of constellation companies have to master to avoid becoming a slave to the past?
Interestingly enough, Teledesic’s ambitions were very similar to all the tried-and-failed constellations of the ‘90s in terms of their stated vision to deliver the world’s biggest satellite data networks. Now, in our era, everyone has a very similar vision with next-generation satellite systems such as OneWeb, O3b and other global HTS providers operating, designing or building networks to tap into a highly lucrative global data market.
So in that sense, history is already repeating itself in a very positive way.
You simply cannot dip your toe in the water when it comes to satellite constellations, it’s all or nothing, so you have to have a higher win-rae far out into the future and extending beyond the advancing capabilities of your nearest terrestrial rival.
But the reasons behind Teledesic’s demise outlines the major pitfalls that must be avoided — if in fact, this time around that vision can finally be achieved commercially as well as technically and operationally. 20:20 vision hindsight is wonderful. We now know the former constellation companies completely ignored or misunderstood the future development and take up of wireless services as the primary competition to satellite, turning many famous and exciting ventures of the 90s into relics of the past.
When Teledesic started, cellular networks could transmit only voice, and no one had announced plans to handle data on those voice networks.
Just a few years later, wireless companies from AT&T to T-Mobile rolled out data services that delivered very low-cost, high-speed broadband.
Competition among wireless equipment manufacturers kept a tighter lid on costs and terrestrial providers have always been able to build the service and revenues incrementally — one city at a time. A satellite venture, in contrast, has to finance and launch the entire network before signing up the first customer. The opportunity ahead of us is vast and it’s all driven by data services. In the 90s the need for data was a prophecy; now it’s a fact. Looking at the incredible success of O3b (the only constellation company in the world to really make it — i.e. break even and become a major acquisition target) and the very credible future plans of OneWeb, Intelsat Epic, Inmarsat GlobalXpress, Eutelsat, ViaSat, SES and others all with their own HTS offerings, there is now a real chance to create global satellite networks that in many aspects will outstrip the performance of terrestrial networks.
As an industry, we are always first past the post in terms of reach and our ability to deliver the Internet to any spot on the globe but in reality when I talk to the CEOs or CTOs of mobile operators, they love to tell me that today’s satellites are referred to as “a need is a must.”
A back-handed compliment if ever there was one. But what are they driving at exactly?
They point out that their “need” for satellite “must” be fulfilled because it’s the “only” option left on the table; they have exhausted all other means before finally resorting to satellite and its inherent limitations over the last 20 year. Ouch!
But that’s exactly why I love what the HTS players in all orbits are doing, because we are about to go beyond reach, and for the first time into the paradigm of Quality of Experience and price points on par with terrestrial alternatives at the point of delivery. If we can do that, then we really bridged the digital world together and the new generation of HTS have delivered on the original missions of all those who have tried and failed up to this point.
Bottom line: The growing demand for broadband services in satellite markets, higher quality services and new price points, driven by innovation, lower manufacturing and launch costs can now make constellations both technically and economically viable.
So what fly in what ointment!?
The fly in the satellite ointment of HTS and all constellation companies is very simple: distribution, distribution, distribution.
The ability to distribute capacity is critically important, due to incredibly high amounts of capacity being offered into smaller and smaller beam footprints. This presents a huge, but equally risky opportunity and one that requires all operators to address a major HTS challenge: generating new demand through a completely new generation of innovative ground antennas that matches the innovation HTS provides.
Remember, the more widely you distribute HTS coverage, the more challenging the business case. The demographics are different and the economies and the willingness to pay both in terms of capital and operational expenses are challenging to say the least.
In order to fill LEO, MEO or GEO HTS satellite payloads to the point of profitable returns, both the cost of the antenna, its efficiency and therefore monthly operational expenses has to be part of the value propositions in order to create new market demand for what is now an enormous amount of available satellite capacity. Successful distribution of HTS capacity is measured by the operators’ ability to access a much larger base of customers at the base of the pyramid, with much higher volumes of data achieved by connecting substantially more users and doing so in a new way that creates hard-to-access demand in remote areas — despite those end-users having substantially reduced budgets for hardware and services.
It’s a classic high-stakes risk-and-reward situation. Especially considering the cost of HTS to deploy from any orbit is much higher as the business case is never proven until the satellite system, both ground and space, are fully operational.
To fully enable HTS, the industry needs very innovative antennas with varying price and performance, able to track from mobile platforms, or track moving satellites whether fixed or on the move, efficiently and at costs that create accretive returns for operators through an attractive end-user business case.
Yet, today’s f lat panel antenna market boasts credible technology but only at the top of the pyramid — the low-volume, high-end markets, where the business case supports such very high capital and operational investment to offer a reasonable level of service in sectors such as aeronautical and super yachts, but certainly not in a way that can fill HTS by accessing much larger market opportunities for HTS.
Put simply, the barrier to enter in terms of current flat panel antenna terminal costs and the increased cost of operating those antennas is far too high to have an effective distribution model for HTS.
Satellite operators who succeed in distributing such large amounts of bandwidth in the new HTS world will be those who are pioneering, investing and accelerating innovation in antenna technology very early on. A new range of antenna technology has to be built ‘from the ground up’ to close the business case for particular customer needs.
John Finney is the founder and majority shareholder of Isotropic Systems Ltd., a London startup developing a low-profile, conformal, multi-band, electronically steered antenna for satellite operators. He formerly was Chief Commercial Officer of O3b Networks.