[Satellite News 09-19-11] One of the main takeaways from Comsys’ VSAT 2011 event held in London this week was that 2010 was a tough year for the VSAT industry.
Simon Bull, a Senior Consultant at Comsys who gave the opening keynote presentation at the event said 2010 “was the year of the non-event” for the VSAT industry. It was not a year to see explosive growth. “Projects and expectations were meant to happen in 2010, but didn’t. Everybody felt it was a tough year. If you stayed level in 2010, you did pretty well. The rollout of bandwidth efficiency technologies such as DVB-S2 was done. However, it was a pretty lackluster year,” said Bull. “There were hard operating conditions, particularly in places like Africa. WildBlue ground to a halt in 2010. Sales were made in Europe, but nothing really exciting. There was a lull in the consumer market. However, we are up to 1.3 million satellite Internet subscribers, which if you think about it is a huge achievement.”
According to the latest Comsys stats, in the enterprise market, there were 315,000 VSAT units shipped in 2010 versus 325,000 in 2009 and 387,000 in 2008. Bull also pointed out to past trends “repeating themselves” and spoke about how fiber proliferation in Africa was eroding trunking services, and how this was having a “knock-on impact” on VSAT services. Bull pointed to a number of factors were shaping VSAT markets around the world. According to Bull, cellular data services in Asia bought price pressure. In the Middle East, the slow withdrawal of military forces led to a decline in enterprise VSAT sales. And unsurprisingly, the economic slowdown led to a slowdown in the market in Eastern Europe.
However, while there was still a degree of optimism in Bull’s presentation, there were also definitely points of concern and an urging for the satellite sector to learn some lessons if business was not to erode still further. “The VSAT business is performing on trend. However, an area of concern is that they are not seeing many primary network opportunities as they were once seeing. They are seeing lower revenues per site. SME broadband business has been slowing down. Operators are missing opportunities, particularly in the corporate segment. Pure broadband is a dangerous place to play,” Bull added.
Bull even went a step further saying VSATs are being marginalized and urging operators to think carefully about how they position their future business. “VSAT services are in a transition phase. Essentially, we have to redefine and rebuild our value proposition. The industry needs to go back to its roots. VSAT services –both consumer and enterprise – have huge potential markets, opening up. The demand for reliable and consistent communications has never been greater. But, the opportunity for failure will come from complacency.”
With so much capacity coming online, particularly new Ka-band capacity, one of the issues is the level of demand for all this capacity. In fact, Ka-band satellites and technology dominated talk at the event.
Bull says the situation in Turkey provides some interesting food for thought. He says. “Turkey is going to get coverage from Eutelsat, Turksat, Yahsat etc. How is all this bandwidth going to be sold? It won’t be sold to the consumer. The satellite operator is going to have to be more flexible in their approach,” he said.
Others also believe Ka-band will be good for the VSAT market. Mary Cotton, CEO, iDirect added, “Ka-band was predominantly invented for the consumer. But, it will dramatically expand the VSAT market. Ka-band satellites are fundamentally different, and the economics will drive a more centralized infrastructure.”
Erwin Hudson, CTO, ViaSat said these new satellites will bring about a raft of changes to the market. He said, “Ka-band is not just about more bandwidth. The stuff we can do with satellite technology is going to be much different to what we have done before. There will be new enterprise, government and military applications. It is really about providing highly compelling telecoms services. Our current services have become dated.”