According to Northern Sky Research (NSR), the commercial ground segment market will grow from $5.6 billion in 2016 to $11.5 billion in 2025, generating more than $100 billion in revenue (7 percent CAGR). High Throughput Satellite (HTS) is the key driver for this growth, opening up a wealth of opportunities for this sector. How can teleport operators ensure they are maximizing this opportunity?
The Growth of HTS
HTS has grown phenomenally over recent months and years, with many operators launching HTS systems. According to Euroconsult, the total committed investment from 30 satellite operators in HTS systems reached a staggering $19 billion in 2017. All of the operators with existing HTS services increased them over the past couple of years, most by a significant amount, and many more have launched services.
This growth is mainly aimed at supplying the data services market, which is data hungry and requires constant connection. However, it is of course also about making the most of the efficiencies and cost efficiencies offered by HTS, as well as the provision of connections in otherwise unconnected communities.
Supply versus Demand
The biggest threat when it comes to HTS right now is the fact that supply is already exceeding demand. Over the coming years, we will see a huge increase in supply, and although demand will also increase, it will be nowhere near the supply levels. This is already having a massive effect on operators with a huge amount of price pressure to remain competitive. The vast amount of Low-Earth Orbit (LEO) constellations set to launch over the coming years, supplying huge amounts of bandwidth will naturally play a massive part in increasing supply and forcing price decreases.
The supply versus demand quandary is also forcing operators to adapt their business models. We are beginning to see the rise of the service providers, whereby satellite operators are not just supplying the satellite bandwidth, but also delivering services direct to the consumer or business. Telenor is a good example of a service provider operator, providing both satellite and mobile connectivity, along with a range of other services. As supply continues growing, we will likely see more and more operators adopting this approach.
That said, the demand for constant connectivity with the rise of Internet of Things (IOT) will have an impact on increasing demand for satellite connectivity, which in many cases will be the only option for these types of data-hungry, connection anywhere services.
GEO to LEO
Currently, the majority of HTS satellites are in GEO. Euroconsult expects there to be another 100 GEO HTS launches between 2017 and 2025, demonstrating that GEO is not going away anytime soon. However, what we are also going to see is a huge volume of LEO launches. As mentioned above, given the vastly bigger capacity, this is going to put even more pressure on operators in terms of supply being much greater than demand.
I believe however that the LEO launches won’t be as quick as some anticipate. In my opinion, we will likely get one to three LEO constellations by the mid 2020s. While there is a great deal of uncertainty right now and a race to be first, this will likely allay some concerns as the mega constellations gradually launch over the coming years, giving operators time to evaluate and adapt business models where needed.
Maximizing the HTS Opportunity
In order to maximize the HTS opportunity, whether GEO or LEO, operators need to ensure they have the right tools in place.
HTS is spot-beam driven, which means there is an increased use of Very Small Aperture Terminals (VSATs). It is widely reported that VSATs are the cause of a plethora of errors, such as satellite interference. This is due to a number of reasons, including the fact that very often they are not correctly installed, but also because some VSATs are simply not good enough quality.
In order to ensure these systems are effective, therefore, operators need to consider a number of important factors. Probably the most obvious thing is to ensure the antennas being used are good quality. Checking whether they are type approved can go a long way to mitigating any potential errors. Ensuring setup is done right first time is also important, building in time for proper testing.
Many VSATs suffer from weather. This is particularly a problem in those remote or unmanned sites, where it is impossible to know what the weather is actually doing locally and what damage may be caused to the equipment. For these types of sites in particular, it is crucial that equipment is housed in weatherproof chassis so that it can keep working regardless.
With remote sites, it is also important to ensure independent and reliable power supplies and fiber links from the antenna to control centers. At the same time, being able to control the signal level means you can minimize any potential damage to equipment.
Large networks of VSAT terminals should also be properly monitored, so that any problems or anomalies are flagged up straight away and can be resolved quickly and efficiently.
A Driving Force
There is no doubt that HTS has positively impacted the satellite industry. As supply continues to increase, operators need to ensure they can maximize the opportunity of new technology to remain competitive. They also need to evaluate different business models before the gap between supply and demand widens even more.
At the same time, however, satellite has great potential and the industry should be working together to highlight the benefits of satellite and increase that demand.
Alex Donnison has a dual role at ETL Systems. He works in components sales and is also the Business Development Manager. In his Business Development role he is involved in the future strategic direction for the company.