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SWOT Panel Displays Confidence Against Terrestrial Threat

By | March 29, 2011

      The tone of SATELLITE 2011 Strengths, Weaknesses Opportunities and Threats (SWOT) panel took an optimistic turn as satellite executives tried to deflate talking points centered on terrestrial threats to the industry.
         Throughout the show, some industry analysts speculated that the sheer size of the $60 billion cellular market would enable satellite’s terrestrial competitors to acquire certain assets in the mobile and broadband sector. Via Satellite Editor and Moderator Jason Bates asked panelists if they believed that these fears merit concern.
         Wavestream Vice President of Broadcast Systems Colin Boyd said the satellite industry should stop looking at terrestrial integration as a threat. “Terrestrial services actually provide a great opportunity to expand our business as satellite becomes a more crucial element of the fiber infrastructure. For example, take a look at the earthquake situation in Japan. Today’s video audiences expect to see these events live. This is where instant video from SNG trucks plays a huge role. In that environment, satellite compliments the infrastructure as it does in other sectors, such as the military and government market with increased reliance on unmanned aerial vehicle (UAV) use.”
         Boyd’s assessment that satellite’s mobility and its recent focus on cost reduction will be the key to its longevity as a platform was seconded by International Datacasting Corp. (IDC) CTO and Vice President Gary Carter. “While we could lament about how satellite lags behind terrestrial speeds, the satellite platform is here to stay. I think it’s an extremely exciting time for satellite as Ka-band is finally seeing a wide-scale launch after being around for a while. There is an insatiable demand for IP services. Frankly, everything is going to turn to IP. We have to defend our turf and offer new services. One of those services I’m interested in is the next-generation air traffic control. It’s a great example of satellite evolving the communications infrastructure.”
         Newtec CEO Serge Van Herck acknowledged that global satellite and terrestrial technologies have converged, but remained adamant regarding satellite’s ability to thrive as a satellite industry. “Whenever someone asks me about the future of satcom, I think back to when I was hired as technical product manager for VSAT in the 1990s. As soon as I got that job, people told me I should find a new one because VSAT and satellite will be gone in a few years when everything is fiber. But, we’re still here and since I joined, I’ve seen only growth.”
         Van Herck said his company is exploring hybrid technologies, but is still focused primarily on satellite as a long-term growth market. “We’re still purely satellite because there is still growth. We continue to grow and compete despite the fact that the technology on the ground has constantly upgraded while space assets have, for a long time, remained relatively stagnant. I’m glad to see Ka-band satellites being launched. I’m sure some satellite operators are thinking about what they are going to do with all that extra capacity, but I’m even more certain that Ka-band will bring a significant boost to our industry. That’s not discounting the role that C- and Ku-band will play as those bandwidths will continue to generate income for many years to come.”
         XipLink CEO Jack Waters said that he identifies hybrid trends existing mostly in video distribution through data services. “Since a lot of us came from the terrestrial business, we all know and understand that satellite is a niche market. The real questions are whether or not satellite will be strategic and whether or not we’ll be able to deliver multi-access services. What areas are strategic for satellite? It’s our job to identify those markets, leverage them and expand our business. After all, the major trends in hybrid services lean toward dependant cloud computers. Wherever satellite is strategic, it’s going to be there. You always have to have a fall back from terrestrial or satellite. It’s always there, reliable, always up and running.”
         Segovia Vice President of Business Operations Gabe Venturi said that satellite has cemented its position as a utility, as bandwidth-per-user rates continue to grow and businesses in remote location relying on satellite to establish enterprises. As for dealing with competitive threats, Venturi sees most of satellite’s challenges existing internally.
         “The two threats to the health of our business are lack of bandwidth and high costs. We can solve both issues by being efficient with our bandwidth, which in turn, means lowers costs. If we can do this, we can grow in the future instead of just being along for the ride. We can play the dominant role,” Venturi said. “However, it is important that we realize that large connectivity networks can’t be satellite exclusive. Satellite is a method of delivery. So, we need to think of ourselves as end-to-end providers instead of just satellite providers. We need to break out of the mold and go beyond satellite if we want to serve new applications. Developers don’t think of throughput or latency when they design new apps.”
         Van Herck disagreed with Venturi’s claim that satellite’s problems exist on the technology side. “Our satellite services have been well received against our 3G competitors in Europe. That shows the technology side. The real issue is on the political side, where telecoms have strong political power. They have been blocking us and are still blocking us. They do this because they know that they don’t get a return on investment on their infrastructure costs and we outperform 3G. I also think that the key to cutting costs lies with reusable frequencies.”
         Coming from a U.S.-based perspective, Venturi agreed with Van Herck that satellite has serious disadvantages in the political realm. “The U.S. Broadband Stimulus, for example is a threat to the industry, especially to companies that have built business models around it. We didn’t articulate or explain our potential properly to congress. We could have had a bigger seat at the table. We let a threat generate and now it’s close to reality. However, there are still opportunities for satellite to compete in broadband stimulus. The average cost-per-megabit to a satellite is $2,000 and we need to cut that in half. Lower cost points will be much more competitive and effective in our efforts to drive innovation.”

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