For HTS service, size will matter

The launch of a new generation of high-throughput satellites that can provide fast, data-intensive broadband to small antennas may forever change the mobile satellite market. However, it likely won’t happen exactly how many satellite operators and industry analysts originally envisioned. Today, the future of many previously planned HTS satellites are in question following recent lackluster revenue and earnings announcements and pullbacks. Capacity price points have hit an almost all time low — at about one third of initial bandwidth pricing.

While the market will likely self-correct, it’s clear that we’ve entered into a new normal. Many fleet operators are moving further down the value chain as they search for incremental revenue opportunities, despite being inexperienced in delivering complete service and designing solutions for complex network requirements. Many service providers are also entering into partnerships with specific fleet operators in an attempt to gain access to forthcoming HTS capacity. These scenarios leave mobility customers wanting for the complete service and support they need, and for an agnostic partner who can provide comprehensive global coverage since no one operator has access to the satellite slots and bandwidth required to stitch together a complete HTS network fabric.

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ITC Global Coverage Map

All of this is driving significant consolidation among companies focused on delivering HTS capabilities. Those who will be successful will have to be able to selectively layer coverage where it is needed most to avoid gluts of unused capacity, while key locations are maxed out. They will provide the greatest possible throughput across a network with a mix of capabilities, and will offer scalability to support growth in demand in multiple vertical markets.

Similarly, organizations will have to put significant ground infrastructure in place to support the complex requirements created by multi-spot-beam satellites. These focused and powerful beams will deliver throughput 10 times greater than traditional satellites, seemingly amplifying the complexity and incremental costs of all the constituent network elements by a power of 10.  Multi spot beams covering the same geographic area of just one widebeam create less flexibility in terms of hub locations, requiring more teleports and more uplinks, which have to be managed at a much higher cost. Likewise, the terrestrial backbone must be far larger, and everything from frequency coordination to regulatory and security requirements increases exponentially. It is easy to see how the capital expense requirements of HTS networks are going to be a barrier to entry for many.

For those organizations that have the layered global coverage, and the capital to scale their ground network – it’s still not enough. You’ve got to be thinking 5, 10, and 20 years into the future for your customers.  So across the board, it really will be “Go big or go home” when it comes to being a global HTS service provider.

For example, Panasonic has put extensive effort into developing detailed traffic modeling in each vertical market, projecting out for 10 years what we think the megabits-per-second demand will be at different times of the day within a given geographic area.

Panasonic looked at the buzzed-about HTS model that was prophesized several years ago and used a completely different methodology to build an agnostic, truly global HTS fabric with a solid long-term strategy and the economies of scale to support and grow with customer requirements. Combining the HTS satellites already in orbit and capacity soon to be launched, Panasonic will have the first Ku-band network with global HTS coverage by the end of 2017; and being Ku-band, customers are already benefiting from the HTS capacity that’s online without having to upgrade or pause operations to replace existing hardware.

It is likely still true that HTS will fundamentally change the market.  It just doesn’t seem to be shaping up to happen in the way most had originally planned.joe_spytek_My-Take_8.15.16

Joe Spytek is CEO of ITC Global, a leading provider of satellite communications to remote and harsh environments.  ITC Global became a subsidiary of Panasonic Corporation in 2015 and leverages the Panasonic network to deliver high availability broadband and end-to-end managed service to oil and gas operations, mining camps, and transoceanic routes around the world.