Enablers of global connectivity

The popularity of video, onset of 5G and increasing deployments of IoT are all going to spur the demand for satellite communications. What remains to be seen is how the operators leverage this opportunity
Satellite services, Satellite communications, Last mile connectivity, Satellites, SES, INTELSAT, Eutelsat, IEC telecom, Satellite market, 5G and satellite

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Satellite communication has always been the strongest complement to mainstream connectivity. With 5G knocking on the doors,  it isn’t unusual to wonder about the relevance and positioning of satellite operators in the 5G era. According to Nabil Ben Soussia, MD, IEC Telecom ME, 5G will not affect satellite industry more than 3G or 4G ever did. “5G will remain terrestrial network aiming at a high return on investment with a focus on high-density cities and areas. Satellite operators follow different objectives: to provide connectivity to remote locations as and when it is needed the most, regardless of how many end users will be there.”

That being said, Soussia adds that 5G will offer higher bandwidth and as a result, stimulate the development of new applications and services. “People will be even more dependent on connectivity, which will further fuel demand for GSM services and satellite services consequently. In just a decade, we saw GSM evolving from 2.5 G to 4 G. Satellite industry kept up with this trend, increasing bandwidth from 4Mbs to HTS (50 Mbps). Even though HTS offers less bandwidth then 4G or 5G, satellite operators and IT developers can work together to adapt applications to the satellite environment and keep users connected to their online resources where they go.”

There is increasing interest and participation in 3GPP from the satellite communication industry, with companies and organisations convinced of the market potential for an integrated satellite and terrestrial network infrastructure in the context of 5G. Recently, satellite companies  Intelsat and SES announced alignment on a proposal to the U.S. Federal Communications Commission (FCC) which seeks to protect the wide array of established satellite services in the 3700-4200 MHz C-band downlink spectrum while opening a specified portion of that spectrum for terrestrial mobile use. The proposal aims to protect the quality and reliability of the extensive services provided by satellite operators in C-band to U.S. broadcasters, media and data companies. It builds on an innovative model first put forward to the FCC by Intelsat and Intel Corporation in October 2017, and sets a commercial and technical framework that would enable wireless operators to quickly access approximately 100 MHz of nationwide C-band downlink spectrum in the United States, speeding the deployment of next-generation 5G services.

Intelsat CEO Stephen Spengler said: “Our priority continues to be creating a framework that provides certainty and protects the quality and reliability of the services we provide to our media, network services and government customers. Our proposed market-based solution provides a speedy resolution to the U.S. objective of accelerating deployment of 5G services.”

Over the last few years, backed with technological innovation, satellite connectivity has enabled several new services of late.  One of the new trends in the region is e-services and e-government. This service is mainly covered by terrestrial means. Imagine there is a disruption of the terrestrial network (no GSM Internet) due to technical issues with a GSM operator or any natural disaster. A government will simply stop operating which will result in a loss of budget resources. “Back up connection is essential to keep e-government working non-stop, and the role of satellite solutions will be essential in this context,” says Nabil Ben Soussia, MD, IEC Telecom ME. “Operators are more and more looking to adapt their solution to complete the terrestrial networks and also adopt new technologies like the IoT (internet of things).”

For example, IEC  Telecom has developed a solution to make satellite connectivity more affordable. “IEC OptiACCESS helps reduce the bandwidth consumption down by 70% and save up to 95% for some of the Internet services. OptiACCESS is a data compression software that allows a person access to the best web services everywhere,” Soussia says. “This software only generates an average of 5% of the data created by a standard emailing software. It  compresses up to 99% of an image size without quality loss. It also enables a person to write emails offline, saving on the data consumption. Overall, it helps browse the web with loading time 3 to 5 times lower.”

Eutelsat Communications recently presented the results of its industry-benchmark survey on TV trends across the Middle East and North Africa. Satellite TV reception in the MENA region has continued to increase its market-share compared to terrestrial and IPTV, and now reaches into 59 million homes. This represents 94% of the 62.2 million TV homes in 14 Arab-speaking countries.

According to Michel Azibert, Eutelsat chief commercial and development officer: “Our 2017 survey confirms the dominance of satellite as the preferred digital infrastructure across the Middle East and North Africa and highlights key trends, notably the increasing significance of High Definition broadcasting.”

NSR’S recent report revealed that the global satellite M2M and IoT market will reach over $2.9 billion in annual retail revenues by 2026. “Revenues are growing year-over-year across, and will accelerate as new M2M capacity supply, in the form of new constellations, come online in the medium term. This presents strong opportunities for all aspects of the M2M/IoT value chain to gain users and revenues in an expanding addressable market,” according to Alan Crisp, senior analyst and lead report author.

Yet another report by NSR forecasts cumulative revenues of over $19.4 billion in land mobile satcom revenue over the 2016-2026 timeframe.  Reducing costs, especially for equipment, is key to growing market share. Partnering and integrating with terrestrial network operators, and further marketing to consumers, will also be required as part of strategies to remain relevant in a market where traditional satellite handhelds contribute little growth to the bottom line.

Ealier in February, Inmarsat and Deutsche Telekom, together with their technology partner Nokia, announced completion of  the key technological step in the development of the European Aviation Network (EAN), the world’s first integrated S-band satellite and complementary LTE-based terrestrial network built for Europe. EAN provides seamless connectivity over land and water, and offers a high bandwidth service to passengers – currently over 75 Mbit/s connection speed to the aircraft – as airlines using the service do not share network capacity with any non-aviation customers. Passengers will be able to use social media, share pictures and stream high-bandwidth content at speeds they are used to experiencing at home.

EAN is also designed to fulfill not only current but also future passenger demand for inflight connectivity, as the integrated LTE ground network is fully scalable to meet increasing connectivity needs in the coming years. EAN will be available for airlines to offer commercially from H1 2018, serving as a game-changer for airlines and their customers.

Acording to Gartner, more than 20 billion connected things will be in use worldwide by 2020.  Scott Amyx, managing Partner at Amyx Ventures says: “Custom engineered space-based communication seems to be the only feasible solution to the problem of interconnecting IoT devices scattered across the globe. Satellite technology has the potential to support the development of the IoT sector. Satellites can easily handle such wide-spread connectivity challenge.

“The global nature of satellite systems and the ability to broadcast to multiple points at the same time makes it the most efficient signal delivery on earth. Satellite transmissions can work seamlessly with terrestrial networks to attain global coverage.”

In spite of the compelling business cases that lay ahead for  satellite operators, there continue to be rising obstacles as well on the way ahead. Soussia says: “The primary challenge for satellite operators in this region, especially after the latest instabilities and what we call Arab spring, is regulation.”  The regulations and policies are some of the factors which restrain the market from growth.

According to Simon Gatty Saunt, head of EMEA fixed data sales at SES Networks, the primary hurdles are dealing with the pricing in the satellite market which has come down significantly over the last few years, the competition against fibre and the increased competition.

“There was a big push to launch new satellites over the MEA three to four years ago and those are now coming to fruition. As a result, there’s a lot of bandwidth available out there. At SES, we believe no capacity is equal and that providing differentiated capacity for our diverse customers is what sets us apart. More importantly, we value the customer connectivity experience, and therefore find it important to offer managed service offerings,” Saunt adds.

Saunt tells CommsMEA how the business is transforming. “I think the days of being just a satellite operator selling transponders are going to be pretty short-lived. We need to be able to provide services on the back of satellite capacity so we can provide high-quality connectivity experience for our customers and their end users. A closer and better relation with end users helps us design our satellites as well. We design them around what our customers are looking for as opposed to just putting up bandwidth over a region and hoping to sell, which is what the old model used to be.”

Unlike GSM providers, operating within country/region, satellite providers cover continents. Hence, satellite providers need to find ways of how to cater to multiple markets within their coverage scope. They must be creative to keep their business running, says Soussia.

“It is not limited to a new product/solution development. It is primarily about designing new business models and the introduction of new operational processes (from logistics to financial information).” To survive and grow, companies will need to follow emerging technologies that could have an impact on their product lines.

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