Via Satellite: What trends are you seeing in the equipment that is being offered by your suppliers?
Pope: More bits per hertz, advanced forward error corrections schemes, the trend towards IP management capabilities, higher data rates and tighter integration with the connecting device. Manufacturers are, in a nutshell, continuing to develop ways to make the links more efficient, simultaneously more reliable and, at the same time, more future proof. A great example of this is in some of the satellite modems that are currently available, for a small upfront fee, you can enable the modem out-of-the-box to have the hardware built in to support carrier canceling, thereby allowing you at a later date to enable that functionality with a software code that effectively doubles your throughput, without doubling you monthly expense. Furthermore, we continue to see the costs of the terminals themselves decline with advancement of the technology. I can remember deploying some of the very first Internet-over-satellite systems where the cost of the terminal itself was upwards of $60,000 and would take at least 45 days to get. I can deliver a far superior solution to you today for under $5,000, and if you get your order into by 3 p.m., I can have it to you the next day.
In general, manufacturers are offering a wider range of standard, configurable and upgrade options that allow us and the product to integrate to a wider range of customer requirements. The option to buy into a product that meets your immediate requirements that also offers a upgrade path to high-end, advanced, more efficient features offers allot of convenience to the operator or end-user. This concept of future-proof technology is being very well received
Via Satellite: What do buying trends tell you about the state of the market?
Pope: Buying trends were a bit slow at the first part of this year, however, they seem to have picked back up, and I think that the viral growth pattern inherent in networks and the increasing demand for data will keep our business growing at an above average rate for quite some time. End users are starting to recognize the benefit increasing of capex expenditures to reduce long term opex expenditures. I think a lot of operators have gotten burned with the long-term contract, whereas the capex expenditure is a one time investment versus a long-term liability. Furthermore, the increased scarcity of bandwidth globally is forcing companies to upgrade their equipment rather than extending their long-term contracts. Using this model, and looking at this we can typically demonstrate how hardware related investments can pay for themselves in as little as six-to-nine months and sometimes in as little as three.
Via Satellite: What does your business tell us about the direction of the market and trends in the coming years?
Pope: We are bullish on the satellite market and see the market only going straight up for the foreseeable future. With the increased availability of low-cost, high-performance terminals, the seamless integration of those terminals into existing IP-based networks and the improved efficiencies and reliabilities of these terminals makes them more attractive as an option. When you combine that with the forecasted growth of broadband Internet service usage over the coming years and the decline in price that we are seeing on the equipment, the basic underlying economics of the industry point us to continued growth.
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