HTS and Modern Business: Benefits and Opportunities

The next time you fill up your car’s tank, don’t be surprised if the gas pump features a video that delivers the news, weather and even a short sales pitch for a local product or service. Or maybe you can watch live training sessions at work that target a specific group of employees or offer project demonstrations that enable you to learn a new skill, spend 15 minutes applying it, then return to the live session to hear presenters address potential questions or concerns you may have.

Retailers all over the world are starting to take advantage of new technologies that include video distribution platforms where video files can be stored and downloaded dynamically over broadband connections, using either satellite or terrestrial networks. Besides delivering a consistent message to employees across locations, people don’t need to travel to each region or market to conduct training seminars, which would be very costly.

“Videos can be pumped directly to the retail point of sale,” explains Arunas Slekys, VP of corporate marketing and GM of Russia/CIS business at Hughes Network Systems, a provider of satellite broadband technology and services, that supplies retailers with its video distribution platform and connectivity. “Customers can look at a promotional video while deciding whether they want to buy this dress or those shoes. It becomes a positive, sales enhancement tool.”

One reason why retailers can step up their video capabilities is because of broadband technology transformations that have occurred within the past several years. For example, high throughput satellites are presenting enterprises with business options that were previously too costly or simply not available. Unlike previous generations of satellites that delivered up to three gigabits per second, this class of satellites can handle more capacity, generally the 10 or more gigabits per second that are usually required for bandwidth-hungry communications like video. While every bit as competitive as DSL regarding performance and price, some companies are establishing a business case for the technology designed to build their bottom line.

Even more opportunities exist in developing countries, particularly India. As a provider of broadband services to banks in India, Slekys says that the country’s terrestrial infrastructure is “very weak.” The government has stepped in and began promoting broadband growth through several subsidized programs. Banks now have the ability to establish remote branches with ATM machines, attract new customers, offer personal or business loans to clients in remote areas, and connect with banks in other communities when needed. He says this is all part of the government’s plan to stimulate the country’s economy.

“We’re adding value beyond the connectivity,” Slekys says, explaining that such applications can help companies realize a higher return-on-investment. “The more a company learns how to improve its ability to sell, the more it can increase customer satisfaction, loyalty and drive sales.” The same logic also applies to his company.

Last July, Hughes launched EchoStar XVII, a Ka-band satellite with Jupiter high-throughput technology and 60 spot beams. Slekys says the throughput is 10 times the amount of its first satellite – Spaceway 3 launched in 2008 – from 10 gigabits per second to more than 100. With plans starting at $40 a month for 10 Mbps residential service, he says the technology is very competitive with any DSL offering. While Spaceway 3 supports 500,000 subscribers, he says EchoStar XVII can handle more than 1.5 million customers.

“With this new generation, we’re able to point the capacity and design our business plan more effectively in a more granular way because we can pick the market targets that we want to service with the capacity on the satellite,” says Slekys.

“Based on the FCC (Federal Communications Commission) and our own data, we estimate there’s from 10 to 15 million households in the United States that are not served and not likely to be served by terrestrial broadband because it’s too expensive to get it there.”

Higher Frequency

Although Ka-band’s higher frequency makes it more susceptible to attenuation from rain or snowstorms, Slekys says Hughes’ engineers built in tolerances by raising the power levels and performance of the channel during inclement weather. The satellite’s operational availability – 99.9 percent – is still higher than a cellular or wireless network, which generally runs around 96 percent, he says.

As high throughput satellites gain more capacity in the sky and the cost per gigabyte continues to drop, Slekys expects the marriage between satellite and cellular to explode. Customers will be able to download more videos that are connected to a satellite backbone. Just imagine shoppers receiving a text video of a famous chef preparing a dish that promotes the use of a specific ingredient.

“Think about how many ways you can use information in a more amenable way, when you want it, where you want it,” he says. “It is personalized content delivery on demand in a way that will stimulate consumers to either buy something or learn something.”

Room for Growth

Businesses are just starting to recognize the numerous ways in which high throughput satellites can contribute to their company’s operations. For example, satellite providers can offer the same service nationwide so businesses don’t have to deal with different providers, each with variations in service agreements and pricing, adds Philip Bates, senior manager at Analysys Mason in London, a global consulting firm focused on telecommunications, media and technology.

Remote hospitals or health care centers can also tap into central databases, consult with other clinics or health care providers or offer interactive videos featuring general health tips for patients waiting in the reception area.

Bates adds that satellite operators are also discovering new uses. He points to Avanti, which has been very active in exploring smaller, lighter and cheaper terminals that connect with high throughput satellites for news gathering and reporting from anywhere in the world. But what’s most exciting, he says, will be the significant lifestyle changes that such satellites can bring to developing continents like Africa that lack a terrestrial infrastructure.

While he believes the technology will undoubtedly expand the satellite market and be a game-changer for many industries, Bates says not everyone may survive. “Whenever you transition from one generation of technology to another, there are winners and losers from that change,” he says. “It could prove to be quite a rocky period for some of the established operators if lots of new entrants come along because of high throughput technology.” Not to mention the enterprises themselves who don’t embrace or adopt the technology.

Losing Business

Pravin Mirchandani, Chief Marketing Officer at OneAccess in Clamart, France, tells the story of how a self-serve gas station near Paris loses two days’ worth of business every time the company’s network – which doesn’t have a backup system – crashes.

OneAccess, a manufacturer of multi-service access routers and Carrier Ethernet access devices, recently partnered with Eutelsat to provide a router platform called the One 1520 that combines VPN and WAN optimization for business services. He explains that most routers lack acceleration-based WAN optimization techniques to overcome the high latency of a typical satellite network. Even with the Ka-satellite service, he says there are still latency issues. In addition, most businesses require encrypted transport or VPNs that typical satellite modems either don’t provide or are very inflexible.

“Eutelsat saw a fantastic market opportunity but also technical and commercial challenges,” Mirchandani says. “It has seen an opportunity in the marketplace where the high throughput satellite service they can deliver can really change the business economics for business services in a way that a lower throughput service just can’t do.”

He says high throughput satellites can also backup terrestrial infrastructure. As an example, he cites a supermarket chain with stores across several countries. In most cases, each store uses a fixed line connection. But if that line goes down due to man-made or natural disasters, the company will lose its ability to operate or service customers. Although a second fixed line could serve as a backup, it is relatively expensive since one is needed per store or site. An alternative is a cellular network. But that offers similar problems.

“If the fixed line goes down … everybody will reach for a smartphone and start to send emails,” he says, adding that using cellular as a backup also requires a separate contract and connection per site in addition to paying a fixed or volume-based tariff based on usage. “Most cellular networks are anyway heavily loaded so any significant increase in demand is going to cause a huge deterioration in quality and availability of service.”

Mirchandani says the most compelling business case for high throughput satellites is using them as backup systems. He describes another potential scenario involving hotels. If Barcelona is competing against Madrid, he says every male in Europe will be glued to his TV watching the soccer match. They may also download information over the Internet, causing networks to get congested. If a hotel needs to complete business critical transactions during the game, it will need a data off-load capability, which can be provided by a business service satellite to transmit its data.

Staffing Strategies

Within the IT industry, high throughput satellites are producing other changes as well. Mirchandani says resources in branch offices and remote sites are now being centralized, making it easier for them to be maintained, updated, upgraded or monitored with less staff.

In the future, high throughput satellites could touch every industry. Besides retailers, Mirchandani says it can help police officers who routinely check license plates or perform background checks, or lawyers in small country towns who need reliable connectivity as they approach deadlines.

Add oil companies and ship captains to the list. Oil rig operators, for example, collect real-time data from wells regarding temperature, pressure, or the types of geological formations being drilled, adds David Myers, president of Global Energy Solutions at Harris CapRock, which provides managed communication services for operations in harsh or remote locations.

In the past, he says a geologist and an advanced drilling expert were present on every oil rig, making critical decisions. But now with higher bandwidth services and near real-time communications, those decisions can be made off the rig – with fewer staff – by sending data over high throughput satellite links. Myers says the much higher data rates made possible by high throughput technologies enable customers to run more bandwidth intensive applications like video and engage in two-way videoconferencing.

The same technology can be used to improve crew morale, decrease employee turnover, and deliver real-time communication on ships.

“Today’s young adults who want to join the merchant marines or become a member of the drilling industry are used to staying connected,” Myers says, adding that they expect to be able to use their iPhone and Skype with friends and family regardless of their location. “If you only have two megabytes on an oil rig with 200 people, they’re not going to be able to run those applications. High throughput satellite technologies will enable improved crew morale services, richer video-based applications and more real-time, remote decision-making.”

Myers says crew morale and welfare is a driving application in this space. In the merchant marine world he says there’s a very large population of Norwegians and Filipinos who desire local country content in their native language. With the right beam coverage along the shipping lanes, he says high throughput satellite solutions can enable that kind of content delivery in a more cost-effective way and have a positive impact on industry retention rates.

Meanwhile, the technology can also be used to support the increasing demand for bandwidth intensive surveillance systems like drones or unmanned aerial vehicles (UAVs), according to Myers. Sending data in real time, rather than recording it as done today, would certainly enhance real-time decisions over any theater of operation, he says.

Despite the technology’s advantages, Myers say these next generation satellites are not opening up new markets as much as they are enabling companies to incorporate more bandwidth intensive applications into their operations. Still, they are having a dramatic impact on the business strategy of some firms such as OneAccess, which is already engaged in negotiations with 20 different companies to deliver this technology. Likewise, Harris CapRock has made a big investment in Intelsat’s Epic fleet because it is the best overall platform for the company’s industrial and government clients who demand not only high speeds, but have no tolerance for downtime, according to Myers.

“Our customers will benefit from the flexibility of the Epic platform,” Myers says. “Instead of fixed beams, you have the ability to target beams of the transponders for a more efficient space link. Epic’s open architecture and backward compatibility means increased control, which enables us to define service characteristics including speed, hardware and network topology. We’re even helping to shape where the satellite beams will be pointed.”

Myers anticipates that customers will buy more bandwidth to run more applications at remote sites versus their current process, which may involve transferring large volumes of data to a hard drive and flying it off site on a helicopter.

Benefits

Overall, Myers says the number one benefit of these emerging, high throughput technologies is that customers will no longer feel limitations from satellite solutions. In many cases today, customers scale back their applications, optimizing them to operate over satellite, which are steps they don’t have to take when connected to fiber or terrestrial services.

“Customers will say 95 percent of the things I do at the corporate office I can now do at my very remote site because of high-throughput satellites,” says Myers, adding that some emerging, high throughput satellites will offer the best of both worlds: spot beam technology and traditional Ku frequency. “Now their ultra remote location, such as a ship, oil rig, or military base, will mirror the application experience of sites closer to civilization.”

Until then, terrestrial communications and fixed wireless will remain the most cost effective solutions for companies in populated areas. Still, high throughput technologies have generated industry buzz. Myers says IT and communication leaders of all industries are looking forward to creating a richer application environment for the customers they serve.

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