Telcos: Their Evolving Needs for Satellite
Telcos, far from abandoning satellite, are using it more and more to shape their next-generation communications strategies. Here, we take a look at how different telcos around the world are using satellite in terms of broadband, video and data services.
Ask any major telco how they are using satellite technology today, and you’re likely to get as many answers as there are telcos. This is hardly surprising considering that even defining what a telco is or does is not as clear-cut as it was less than 15 years ago.
Forced by market deregulation in several countries that allowed in competing telephony companies; cellular carriers that slowly but intently began to erode demand for fixed-line telephony; cable operators that added broadband and IP telephony to their pay-TV services; the emergence of fiber-to-the-home (FTTH) networks; and lately the phenomenon of both established and greenfield wireless operators joining the market for high-speed Internet access, telcos have had no option but to become a bit of everything.
Another Tool in the Toolbox
“The first — and largest — application area is as a business continuity solution to our terrestrial MPLS network,” Burson explains. “By combining Verizon’s world-class MPLS network with the true, last-mile geographic diversity that satellite offers, we’re able to provide our customers with a diverse, highly available and secure, private, carrier-class satellite network solution.” Other terms that Burson uses to describe this satellite backup functionality are “geographic redundancy” and “diversity of protection.”
The second scenario where Verizon is reselling satellite capacity is to provide primary voice and data communications in remote locations where there may not be any other means of service. “If you look at transportation companies, railway companies, energy companies, often the only solution may be satellite. Many of our customers are multinational corporations that have operations in Africa or Latin America, and with the solutions that Verizon brings to the table we’re able to give them a portfolio of services that allows them to connect all of their sites back to their primary MPLS network,” Burson says.
The third way in which Verizon Business is exploiting satellite is by offering its U.S. customer base the chance to set up a mobile, temporary office anywhere in the country within 24 to 36 hours. To do that, the company has a ready fleet of trucks and trailers fully equipped with Ku uplink and downlink gear. Many of these vehicles were dispatched to provide emergency response communications during 9/11, Hurricane Katrina and Hurricane Irene.
Referring specifically to the latter two natural disasters, Burson says, “Often in events of this nature, the backhaul infrastructure for even the wireless networks was not available due to the flooding. So satellite provided major primary communications (voice and data) for first responders and victims to make their phone calls.”
Initially conceived, and for nearly two decades used exclusively, for emergency response communications, it was only last August that Verizon opened up this mobile satellite fleet to new business applications. For example, to multicast a live tradeshow presentation to a global audience, or a live field video feed to multiple offices for training purposes.
To Fly or Not to Fly
To communicate with the approximately 10,000 VSAT dishes that Verizon Business has deployed at its customers’ sites around the globe, the telco operates three teleports. Two of them (one located on the west coast of the United States, the other on the east coast of the country) came as part of the assets that the company inherited when it acquired MCI in 2006. The third teleport is operated “through one of our partners in the United Kingdom,” explains Bob Benanti, a senior satellite engineer at Verizon Business. “This gives us the flexibility to downlink the services of our multinational customers close to where they are based.”
When asked about the new directions Verizon Business foresees for the satellite portion of its global telecoms network infrastructure, Benanti replies, “One of the things we see with our customers is that, since the satellite network is so close to our MPLS network, they really want to see [the two elements] converging.” He takes Quality of Service (QoS) as an example: “They want to see a satellite link perform as if it were any other site in their network. All the same capabilities, the same features that we offer on our terrestrial network, they want to see them mirrored on the satellite. We’re moving towards that with QoS.”
But is it technically possible to match the performance of fiber running on the ground on a geostationary satellite? “It’s probably close to possible,” Benanti believes. “We’re working with our third-party hardware providers to get to where our terrestrial network is. It’s not there yet, but we are working with them.”
The satellite engineer, however, does see roadblocks in getting there. “I guess the biggest challenge is that a lot of customers use a Cisco router, for example, for QoS. And they want the satellite modem to offer all those same features. So the satellite modem has to become more powerful and smarter to offer the same features that the Cisco router does. That’s what we’re seeing for the future. There are some applications that may never work well over satellite, but for the ones that do, customers want them to work increasingly better and smarter,” says Benanti.
Burson sees the use of satellite capacity that the telco is making as still developing. “While we expect it to continue to grow, we’re also working with our hardware providers to continually increase the efficiency [of their products], so that you can continue your oversubscription, your throughput speeds and your efficiency speeds that better use that satellite bandwidth. But we are seeing the business grow and, with that, the use of multiple transponders in satellites that we use around the world is also growing.”
Owning Satellite Assets
Verizon doesn’t own any space-based infrastructure, relying instead on capacity leased from SES, Intelsat and other operators. But that doesn’t mean that other big telcos aren’t taking a different approach. Telenor Group, Norway’s incumbent and one of Europe’s largest telecoms service providers, has a subsidiary Telenor Satellite Broadcasting (TSB) that is in practice a full-blown satellite operator.
“Telenor’s satellite fleet is used to deliver data communications services (of which the fastest growing part is maritime VSAT) and broadcast services,” says Lars Janols, chief sales officer, Telenor Satellite Broadcasting. “Traditionally, Telenor has had an interest in maritime communication due to Norway’s shipping and fishing sectors, which was then further elevated by the development of the Norwegian offshore oil and gas industry. Satellite communication has always been a vital communication tool for these industries.”
On the DTH side, the company currently broadcasts nearly 700 TV channels and hundreds of radio stations, mainly to the Nordic region and to Central and Eastern Europe. In total, 17 million households receive audiovisual content transmitted by the Oslo-based satellite subsidiary of Telenor.
The IPTV concept was born in the late 1990s out of the desperate realization by telcos that they would have to become triple-play operators to survive. DSL was beginning to evolve into more powerful iterations of the technology. It seemed logical at the time that the same IP networks which telcos had been creating — or rather, adapting — for residential broadband access should also be used to overlay pay-TV services.
So a number of telcos did just that. While it worked, it was soon evident that IPTV service provision via even the most advanced ADSL2+ standard faced insurmountable challenges. Even in France, one of the countries that led the world in IPTV rollouts and subscriber numbers, telcos experienced limitations — both in terms of geographic reach and network capacity.
Philippe Rouxel, chief marketing officer of GlobeCast (an Orange-France Telecom company), comments, “Orange’s main challenge was to be within reach of every possible home in France,” he remembers. “They had initially launched a TV offer on DSL, but this was only available to ‘eligible’ customers — those close enough to the DSL gateways to have sufficient bandwidth for TV. To make this offer available to the several millions of Orange DSL customers not eligible for IPTV, satellite was the most effective option. It was more cost-effective than adding density to Orange’s DSL network and it was also far faster to implement.”
Like Orange in France, Portugal Telecom in Portugal, TP in Poland and Deutsche Telekom in Germany, Hungary, Slovakia and Croatia have all recently decided to reinforce their previously launched IPTV services with HD TV-friendlier, nationwide available DTH transmissions.
Other telcos in Europe are going a step further. TeliaSonera, one of Scandinavia’s major telcos comprising of the incumbents of Sweden (Telia) and Finland (Sonera), signed a deal in 2011 with Eutelsat to bring satellite broadband services to Finland. It seems Ka-band has made all the difference there. Jorma Hämäläinen, TeliaSonera’s director of satellite services, says “Our country Finland is quite long. We have about 18 inhabitants per square kilometer. Around a third of the population is in the southern part of Finland. There are a lot of rural areas in the country, and it is difficult and challenging to provide sufficient speed via fixed-lined services. Of course every day we are building up our fiber capability and 3G/4G services, but there are customers who are not very well provided by those services. This is the reason why we need to have these satellite services in the near future. This will be a good tool for us to provide these new connection services to customers. Satellite services can now provide up to 6 Mbps to 10 Mbps in terms of speeds.”
Another major telco owning and running its own satellite fleet is Singapore-based SingTel. Adding together its two operational satellites (ST-2 and ST-1, which will be decommissioned next year, although by then ST-3 will also have come online) with the five operational birds owned by its Australian subsidiary Optus, the SingTel group’s fleet has 75 percent of the world population on its line of sight.
“Why do we need to run our own satellites? Because when you own your own satellites and are able to expand your fiber network, you get the same kind of control, same kind of flexibility that we have been leveraging on in the submarine cable world to give customers the most optimal network experience,” says Titus Yong, vice president of satellite for SingTel.
“As a satellite operator, you’re able to provide customers with an optimum footprint, for example, whether it’s in terms of antenna size or with regards to modulation capability. And owning the teleports to support this space segment also allows us to provide a higher level of managed services and managed security for them. Obviously, we can’t cover the whole world — and that’s not our intention at all. Therefore, we partner with other satellite operators to provide [services] even farther. But our focus is very much decision-making in Asia Pacific, implementation into neighboring emerging regions (such as Africa, the Middle East and the Pacific Islands) and that’s where I think our satellite footprint strategy will continue to be executed.”
As far as the specific services that are driving demand for the growing capacity that the telco is currently building in space, Yong identifies four key segments, the first being maritime. “Even though the maritime market is characterized by having very global footprint requirements, in this part of the world there is a lot of induced traffic requirement on our satellites serving offshore oil rigs and the shipping industry.”
He notes the second segment as broadcast industry. “There are a number of DTH licenses being issued in many of the emerging countries in Asia. And we are starting to serve them. The take-up rate from new subscribers is tremendous. In India, for example, a typical pay-TV ARPU could be only $5 or $6 a month; but they are adding millions on a monthly basis. That ultimately increases the satellite capacity you require to support what I call ‘general channels.’ As these pay-TV DTH operators move into offering higher-tier services, many of them are starting to do regional segmentation of channels. And that adds a lot more requirements to the use of capacity for us,” Yong explains.
The two other sectors generating business for SingTel’s satellite division are the corporate market (including NGOs and governments) and Internet service providers. “The proliferation of devices for Internet access in emerging markets is really amazing,” says Yong. “That drives the need for many ISPs in these emerging countries to look for more bandwidth. The sad news for them — but good news for us — is that terrestrial support in these countries is still not mature enough. They do not have enough peering traffic capability to the United States, Europe or China for that matter. So many of these people are using Singapore SingTel as a gateway, and that requires a lot of backhaul trunk capacity from those countries into Singapore for Internet traffic upstream and downstream.”
In Latin America, where Telefónica and Grupo Telmex easily dominate the regional telecoms landscape, both companies have taken advantage of satellite to set up pay-TV operations. América Móvil (the mobile arm of Telmex that ended up absorbing the telco) has gone as far as becoming Latin America’s largest provider of pay-TV. The company boasts more than 11 million subscribers (all of them outside of Mexico), with DTH being just one of its multiple delivery platforms.
Telefónica is, without a doubt, the telco that has more intelligently been able to exploit what satellite has to offer in a region like Latin America when it comes to pay-TV. The Spanish-based group set up a company called Media Networks Latin America (MNLA) that developed a white label DTH product.
From its network operations center in Lima, Peru, MNLA broadcasts some 500 standard and HD channels via satellite that smaller telcos, cable companies or even electricity suppliers based anywhere in South America can use to launch their own pay-TV brands.
Javier Izquierdo, head of wholesale operations at MNLA, says 17 different regional operators are already downlinking Telefónica’s white label DTH bouquet and reselling it to five million people. “In Latin America there are a series of deficiencies — especially with regards to terrestrial infrastructure — which turn DTH into the most appropriate option.”