Satellite bandwidth management: A Balancing Act
By Peter J. Brown
The satellite industry continues to stay focused, doing a few things better than its terrestrial counterparts. Some regions enjoy relative stability with respect to both the transponder pool and the pricing of available capacity, while in other parts of the world things are seriously askew with a significant surplus of capacity leading to underused assets and a general lack of stability.
North America and Europe are mature satellite markets that have a limited pool of satellite operators serving large customers with a variety of point-to-multipoint service menus. Even though Africa and the Middle East are stable, these two regions continue to challenge business initiatives. Those seeking further satellite services in these regions seem be awaiting further consolidation as well as a better balancing of supply and demand.
Philip McAlister, MD-based Futron Corp.’s director of space and telecommunications, points to a current overcapacity of roughly 40 percent globally. "Certainly, there are pockets where the supply/demand equation is not so out of balance, and satellite operators can still sell capacity at decent prices," says McAlister. "But globally, it is a significant problem and it is not forecast to abate until around 2008-2009."
Asia: Too Much Capacity, Too Many Operators
The Asia-Pacific region grapples with an awkward and unbalanced supply/demand scenario. Economic recovery has not reached all countries, although some companies in the satellite sector have achieved profitability. There is a high demand for new applications, but making these a reality is a challenge, given a prolonged price war.
"The satellite capacity providers are being impacted mostly through low lease prices, and higher sales/marketing costs. The regions hardest hit are Asia and Latin America. Latin America will probably get better before Asia," McAlister adds.
China, Japan and Korea comprise a relatively stable regional sector with a steady growth curve, and yet within the footprint of each country are large satellite markets that are almost completely isolated from adjacent ones. Any sharing of satellite assets and bandwidth across borders, such as the case with the recent MBSAT joint venture involving companies in Korea and Japan for example, represents an exception rather than the rule. India may soon fit this model as well.
"Most of the Asian economies are still recovering from twin economic shocks throughout the last seven years. [Even so] recovery is very country specific. Some markets are still tough to enter directly, especially China, the hottest regional economy," says Timothy Logue, space and telecommunications analyst with Coudert Brothers LLP’s Washington, DC, office. "In orbit, there are a lot of satellites, meaning there is a lot of choice, but also a lot of coordination problems, which can make it difficult to fully exploit the capacity of the satellites already there or planned."
Logue also points out that it does not appear that any significant mergers within the Asia-Pacific region will occur that could lead to an actual reduction in capacity in orbit. "It is making operators think carefully about what course regarding new capacity they will follow. Some have slowed down expansion and are reconsidering replacement strategies," Logue says. "In short, they are back to looking at business cases, rather than simply launching satellites on the theory that the users are out there. Prices are still soft and are likely to improve only slightly this year. There is a lot of C-band capacity in use with a lot of legacy systems looking at it, and we are starting to see more expansion C-band capacity planned for launch," he adds.
In Logue’s opinion, the most aggressive operator at the moment in the Asian region is Shin Satellite Public Co. Ltd., which is slated to launch its IPstar satellite this year. "It has tremendous capacity and potential. Everyone is watching them," he adds.
Karim Nour, an industry analyst at CA-based Frost and Sullivan covering space and communications, views Asia slightly differently than Logue, emphasizing that while overcapacity does lead to inefficiencies, it is not as big a problem as it seems. In other words, operators only need to achieve a 60 percent utilization rate on a satellite in order to break even on it, according to Nour. "Asia is likely to see more consolidation among operators in the next few years, but overall we do not expect to see a tremendous reduction in overcapacity over the next few years in any region," adds Nour. "It is much more in the operator’s interests to have a satellite 60 percent filled than to have it 100 percent filled and have to turn away customers. Overcapacity is driven by several factors including competition among operators, not only for business, but also for orbital slots."
Another factor fueling connectivity competition within the satellite industry is lead by established terrestrial and wireless networks. But how is terrestrial wired and wireless technology in Asia contributing to the problem, if at all? This factor may not be as pronounced in the Asia-Pacific region as in others. "Certainly that is a challenge everywhere, though in many parts of Asia these technologies do not reach much beyond the major urban areas," says Logue.
Asia has too many country-specific operators and so does Latin America to a lesser extent. Logue likes the long-term prognosis for Asia, although he admits that it may be years before a clear trend emerges. Nour, on the other hand, says that Asia is likely to see more consolidation among operators in the next few years, but overall, does not expect to see "a tremendous reduction in overcapacity in any region." Latin America, however, does not cope with as many operators as Asia, according to Christopher Baugh, president of FL- based Northern Sky Research LLC. Both regions are overserved and badly in need of consolidation. Satmex in Mexico for example, is in a very awkward financial situation and facing a difficult set of choices. Likewise, some new satellites in Asia are experiencing extremely low utilization rates with below -market pricing becoming the norm, according to Baugh.
Fiber And HDTV: Operators Getting Creative
According to Baugh, in North America, HDTV services will put substantial pressure on existing and future replacement capacity even with the proposed sharing of Canadian and U.S. space assets such as the DirecTV/Telesat arrangement spelled out in recent Federal Communications Commissions(FCC) filings. "Customers are becoming smarter about how to take advantage of cheap fiber, and at the same time, they are very focused on application-driven solutions," says Baugh. Even with the launch of HDTV ventures like Euro1080 in Europe, any similar tightening in the supply of bandwidth throughout the continent is unlikely due to the availability of ample capacity outside the prime broadcast slots in the region, according to Baugh. Even the onset of the Summer Olympics coverage in Greece is not causing any major headaches at this point. And in the Middle East, satellite repositioning along with an emphasis on service outreach from the eastern Mediterranean in particular has addressed the uptake in demand in that region.
Several satellite operators are rolling out hybrid fiber/satellite solutions, and this is the wave of the future, according to Logue. As this trend continues, satellite operators are compelled to choose between going with either one or a pool of suppliers of fiber capacity.
"The question will be how good will those partners and employees be at selling both. After all, the two technological ‘churches’ have been separate and competitive for a long time. It’s not easy to bring them together," says Logue. He also sees satellite operators becoming more dependent upon terrestrial partners or even sales units to sell satellite capacity.
This trend aside, is the upward spike in the amount of Internet Protocol traffic–voice, video and data–likely to have an impact on bandwidth pricing? "The demand for seamless IP networking is adding to network complexity, but it is hard to say that it is exerting any real downward pressure on bandwidth pricing," says Baugh. "While customers are striving to maximize efficiency, it is still somewhat rare to see customers cutting back on bandwidth as opposed to trying to do more with what they have now. For the operators, it is all about cost-cutting and getting bandwidth efficiency where it needs to be. Clearly in the bi-directional satellite broadband arena, for example, we still have a way to go from the standpoint of bandwidth efficiency, while with Interactive TV (ITV) over satellite, we are seeing much more optimism and enthusiasm even for ITV business models based on hybrid return channels."
For satellite operators, exploiting low fiber prices means adding speed and flexibility to their networks. "However, last-mile terrestrial access growth is slowing, which will help the DTH service providers," says McAlister.
Bandwidth Management: All About Performance
In the midst of all these regional differences, and given the above-mentioned shift by several satellite operators to hybrid networking solutions, making decisions about how to best address bandwidth management issues on a per-day basis is not getting easier. For example, how to maximize channel utilization is one major challenge in particular for service operators who handle multiple users in an increasingly packet-switched, protocol-driven environment.
"Issues such as management of bandwidth among multiple users per bearer channel, and managing more complex satellite payloads require more sophistication in the satellite network infrastructure," says Patrick Thera, business director of network management systems at Saskatoon-based SED Systems, a division of Calian, which specializes in providing bandwidth management solutions to the satellite industry.
"Recent enhancements have included the ability to share frequencies between services in order to maximize channel utilization," says Thera." Besides providing real-time bandwidth management solutions, SED also supplies planning tools. With an extensive database of information and a sophisticated model of the satellite network, the Frequency Planning System can identify signal quality issues before they are manifest in the field."
Service providers and customers strive to keep their broadcast pipes fully utilized, and avoid buying pipes that are bigger than necessary. But what about the collection of content on the other end, prior to delivery or broadcast? This is extremely important as the industry begins to see such things as new push multicast Video on Demand via satellite services emerging, for example.
"As multicast applications have grown both in volume and diversity of traffic, and as the number of receive sites has expanded as well, the need to gather more content from multiple sources on the backend has also grown," says Bill Steele, president of CT-based Kencast Inc.
As a result, the same principles of opportunistic bandwidth management are now being applied to the collection of content on the backend, i.e., from the content source to the launch point or satellite uplink. Media DVX uses Kencast’s Fazzt Satellite Publisher to collect multigigabyte files from 24 sites, point-to-point via satellite. This content is then routed to Panamsat’s hub in Atlanta for subsequent multicast.
"If you have a capacity of 20 Mbs at the uplink, you can assure each of five content providers they will be guaranteed a minimum tunnel to and through the uplink of at least 4 Mbs at all times. If the other four providers are idle, a single active provider will see his throughput automatically accelerate to 20 Mbs," says Steele. "The result is a network that makes efficient use of bandwidth from end-to-end, from source to user."
So having the right planning tools and taking the time to optimize aggregation and the inbound feed from multiple sources is key to the successful management of satellite bandwidth. Service providers need to be sure they are hitting on all cylinders, at all layers. In other words, at the physical, data and application layers. At the physical layer, higher order modulation and forward error correction techniques are used in tandem with compression and Quality of Service (QoS) at the data layer. At the application layer, however, things either click or they do not. Operators can register bandwidth across satellite links based on channel load or application.
"The application and load IP packet switching allow bandwidth to go from shared to on-demand dedicated. A key ability is monitoring the traffic and establishing pre-determined policies to make decisions for the star or mesh configured networks," says Tim Floerchinger, vice president, sales and marketing at Comtech Vipersat Networks Inc.
Such solutions as Comtech’s Vipersat platform strive to provide customers with a seamless IP-based infrastructure for satellite networking. Systems such as this one automate bandwidth utilization while optimizing space segment efficiency. They also automate shared to dedicated inbound channel switching and sizing based on channel load or application.
Because so many arrows point in the direction of overselling bandwidth with QoS, companies like iDirect have stepped up with a solution that enables operators to offer QoS no matter how much overselling is taking place, doing so across all network applications, routes and terminals. At the same time, all Service Level Agreements are easily verified by the operator via automatic state-of-the-art performance monitoring.
"Thanks to Multi-Frequency-Time Division Multiple Access (MF-TDMA) with fast hopping, iDirect increases the efficiency of space segment usage, and by being fast, load balancing is performed in a real-time manner," says Sasmith Reddi, senior technology analyst at iDirect.
Intelsat Ltd. includes both Comtech EF Data and iDirect products as part of its global service offering, according to Stephen Good, senior product manager of broadband and enterprise platforms for the satellite operator. Among other things, Intelsat is building its hybrid fiber/satellite networking, in an effort to better serve its customers’ needs, allowing them to get the most from their allocated bandwidth.
"Intelsat currently operates several vendors’ satellite access and transport platforms from companies such as, iDirect, Viasat, Radyne and Comtech. Intelsat will continue to operate these multiple platforms in its targeted regions and markets to ensure that we are satisfying the needs and preferences of all of our global customers," says Good. "Vipersat provides a number of advantages, including switched SCPC connections, Single Hop On Demand operation as well as enhanced coding and FEC techniques. At the same time, Intelsat has a multilevel traffic flow monitoring system that is used across its multiple platforms."
As for Comtech, Good says Intelsat is pleased that its Vipersat networks can be centrally managed regardless of the number and location of the operator’s worldwide hubs, and also Intelsat is pleased with the ease with which clients can build networks, automate network efficiency and monitor and resolve issues.
As for iDirect, Good emphasizes that the scalability of the iDirect system allows Intelsat to scale as the network grows with the option of accessing up to five different satellites from a single chassis. iDirect is also a flexible solution that enables operators to increase or decrease the bandwidth assigned to specific TDMA traffic or applications bit by bit, rather than doing so using a rigid menu of established rates.
"iDirect provides strong performance enhancement via TCP acceleration, domain name system caching and compression features as well as automatic power control and turbo coding for efficient space segment usage," adds Good.
Managing The Balance
The practice of sound bandwidth management is constantly evolving, and a lot of new tools and new platforms are out there to help everyone do the job right. As for the global satellite bandwidth market, there are lots of tough decisions to be made, especially in Asia and Latin America.
The presence of mile after mile of dark fiber is not lost on the satellite industry, which has adopted a pragmatic and customer-driven approach as it moves from launch to launch. And with a new kid on the block in the form of Ka-band making its presence known, there will be more bandwidth, more options and more opportunities.
Peter J. Brown is Via Satellite’s Senior Multimedia & Homeland Security Editor. He also volunteers as a satellite technology and communications advisor to the Maine Emergency Management Agency.