Global VSAT Review: The Truth About Myth

by David Hartshorn

Mythology is a source of great yarns, like Cassandra who was blessed with the ability to see the future, but who was cursed so that no one would believe her. Entertaining to be sure. Unfortunately, however, myths aren’t confined to ancient Greek history, and they too often cross the line that separates fact from fiction. A more contemporary example: Satellite-based communications are cost effective, sophisticated and ideal when there’s nothing else available.

This modern-day myth is occasionally uttered by misguided officials, the press, IT managers, professionals from other telecom industries and, yes, even from selected members of the satellite industry. Let’s be clear. Satellite communications are an excellent solution in unserved areas, but it should also be noted that there are, for example, more VSATs operating in the United States than in any other single country, where they are used amidst one of the most extensive fiber-optic infrastructures in the world. Likewise, enterprises based in the commercial capitals of most regions are foremost among the users of VSAT-based communications.

Why does the U.S. VSAT end user community include players from the retail, banking, oil and gas, credit card verification, pharmaceutical, automotive, military, fast food, postal, educational, agricultural and other key sectors? Because fiber–while it’s unbeatable on point-to-point applications (restoration services aside)–can’t touch the cost efficiencies of satellite-based point-to-multipoint networks.

That’s also why many of the largest users of fiber optics in the world–a.k.a. the international carriers–are avowed VSAT devotees. While satellite-based service represents a fraction of the carriers’ revenues, it’s an indispensable part of their portfolios, enabling them to offer a full range of complementary services to their customers.

The satellites-are-a-last-resort myth also extends to the broadcasting sector. But where are most direct-to-home satellite services offered? In high-density cable strongholds like Western Europe and North America. (Indeed, satellite television reportedly grew faster in the United States last year than cable TV.)

What is also interesting in the major cable markets is that satellite–more than simply complementing terrestrial services–often wins converts wherever cable pricing is too high, signal reception is sub-standard, after-sale service is shoddy and/or channel selection is too limited.

Here’s another myth: Satellites can’t handle IP-based service.

In truth, the exact opposite is demonstrated daily by an estimated 11 percent of the world’s ISPs, which use satellite either directly or indirectly to establish IP-based links. The percentage is even higher among Latin American, African and Middle Eastern ISPs, where 66 percent, 47 percent and 43 percent rely on satellites for IP-based connectivity according to DTT Consulting. In the past two years, such ISP adoption rates were instrumental in driving up satellite-delivered IP-based service revenues by more than 800 percent.

Meanwhile, last year, one of the largest Internet Service Providers in the world, America Online, invested more than $1 billion in a next-generation IP-based VSAT service. And Microsoft, the largest software producer in the world, invested millions of dollars in a direct-to-home interactive IP-based satellite service which end users will tell you works like a charm.

The myth surrounding IP-based service is largely perpetuated by the misperception that latency is a show stopper for satellites. It takes approximately 0.25 seconds for a signal to travel from a transmitter on Earth to a satellite, and back down to a receiver. Fair enough. But 0.25 seconds for a data service is not only manageable, it is much better than the latency often encountered when attempting to download a Web page using standard terrestrial Internet service.

If anything, high-speed satellite delivery enables end users to bypass the terrestrial traffic jams responsible for the “World Wide Wait.” The advent of push technology and caching further strengthens the case for IP via satellite.

Finally, here’s a myth in the making: The recent difficulties encountered by Iridium, ICO, Orbcomm et al means there is no business case for broadband satellite services.

These are two distinct satellite sectors offering different services. Iridium and company primarily seek to provide mobile narrowband services, as opposed to broadband satellite solutions, which are typically offered via fixed networks.

Broadband satellite is largely the domain of the fixed satellite services industry which, by some estimates, already accounts for 7.8 percent of all broadband access throughout the world and is projected to generate $13.8 billion from broadband service provision by 2004 according to Northern Sky Research.

Cassandra excepted, it remains to be seen what the future actually has in store. What is quite clear, though, is that satellite communications have emerged from a relatively limited niche technology to a mainstream service, providing cost-effective IP-based broadband point-to-multipoint solutions. And that’s a fact.

David Hartshorn is the Secretary General of the Global VSAT Forum. For more information, e-mail: [email protected].