North American Transponder Supply Grows

By Edward Morgan

In our fast moving satellite communications industry, it is easy to lose track of how various services are driving the demand for capacity. That is why the Clarksburg, Md.- based Communications Center has tracked the satellite transponders serving North America since 1984 with a quarterly report. The following is an overview of significant events that occurred during the third quarter and future developments to watch.

We analyze the market for transponders in C-, Ku- and S-bands for scheduled video, occasional video, voice and digital (including VSAT services), inventory (unused) and failed. A brief description of those categories and our methodology follows.

Tracking Transponders

The best method for determining transponder demand is to measure the traffic on each satellite. Using our earth station, we examine each satellite at various times of the day and night for activity about transponders serving North America. We use spectrum analyzers in conjunction with video and audio receivers.

In the third quarter, we monitored 1,409 transponders on 55 satellites that operated with sufficient power to be checked from our location at Clarksburg. Many of these satellites operate in both C- and Ku-bands. The measurements and spectrum plots during each quarter fill a three-inch binder.

The most important factor in determining transponder use is time. Many video services only appear during daytime hours to provide newsgathering, education, corporate training, and videoconferencing. Others are only occupied during prime time evening hours, while others are used just occasionally. By rechecking transponders, we can track weekend and occasional use.

We categorize transponders used for full-time video as “scheduled video.” Transponders used randomly for video are listed as “occasional video.” Digital carriers provide 85.9 percent of the domestic U.S. scheduled video and 14.1 percent of the occasional video. Nearly two-thirds of the occasional video is at Ku-band. In case of mixed or alternating services, we assign a percentage to each type of use based on observations.

The voice and digital category holds all transponders that show digital data, voice or single carrier per channel (SCPC) traffic. This category includes business voice, one and two-way data services, audio (radio) and retail VSAT services.

Transponders are categorized as “failed” after there is no activity for many quarters and we have confirmed that they are not available. The center’s quarterly report focuses on geostationary “station kept” satellites that provide fixed satellite service (FSS) or broadcasting satellite service (BSS).

Third Quarter Results

The center’s lastest report:

1. Identifies key players in the North American satellite industry that range from fast-growing direct-to-home (DTH) providers to bread-and-butter global satellite operators.

2. Measures the number of North American transponders from its Maryland location jumped to 1,409, up from 1,329. That growth is showcased in Table 2.

3. Indicates that the EchoStar-9/Telstar-13 at 121 degrees West Longitude (WL) successfully completed in orbit testing. The satellite adds 24 C-band and 32 Ku-band transponders to the supply over North America.

4. Shows that the AMC-2 replaced the inclined orbit Gstar-4 at 105 degrees WL but is not authorized for C-band at this location. The satellite represents an addition of 24 station-kept Ku-band transponders to the supply.

5. Reveals that Canada’s Anik-E2 replaced Anik-E1 at 118.7 degrees WL. Anik-E1 moved to 109.2 WL and occupies a new orbital location. Thus, 24 C-band and 16 Ku-band transponders are added. However, not all transponders on E1 and E2 are operable. Coordination agreements resulted in Canada and Mexico exchanging orbital assignments at 109.2 degrees and 114.9 degrees WL. No traffic was detected on Anik-E1 or E2 during the survey and thus the primary value of these satellites is to protect the Canadian licenses at these locations.

6. Addresses a Sept. 19 short-circuit of the Telstar-4 satellite bus at 89 degrees WL. The anomaly caused the satellite to cease operations despite recovery efforts. The Telstar-4 loss represents a reduction of 24 C-band and 16 Ku-band transponders.

7. Highlights deployment and completion of in-orbit testing for the Rainbow-1 located at 61.5 degrees WL. Owned and operated by Rainbow DBS, a subsidiary of Cablevision Systems [NYSE: CVC], the satellite now provides the VOOM DTH service. VOOM offers the most HDTV channels of the DTH providers. Unless the spotbeams are used, Rainbow-1 does not represent an addition to the transponder supply.

8. Documents the move of DirecTV-6 from 119 to 110 degrees WL and DirecTV-1 from 110 to 101 degrees WL. Upon its arrival, and following other transponder reassignments, DirecTV-1 was put into service and DirecTV-2 was removed from service. The center considers DirecTV-2 an in-orbit, on-location spare.

9. Shows that DirecTV filed for authorization to retrieve DirecTV-3 from its “storage orbit” and locate it at 82 degrees WL with Nimiq-2, a Canadian satellite that incurred an early life failure of a solar array. DirecTV-3 has been leased to Telesat Canada.

10. Notes the ailing EchoStar-4 moved to 158 degrees WL, where the satellite is authorized for three transponders. At least 38 of 44 transponders on EchoStar-4 had failed as of June 2002.

Developments To Watch

The center identified the following developments to watch in the North American transponder market:

1. Video compression has been a major near-term influence on North American satellite demand by increasing the number of channels carried per transponder. Instead of reducing demand, the center has seen scheduled video remain steady over the past four years. Multiple individual carriers can use a transponder or a single carrier can “multiplex” as many as 14 channels. Leasing fractions of a transponder has attracted new users previously priced out of the full transponder market, in turn reducing the number of subscribers needed for the channel to break even.

2. Compressed video primarily has used QPSK (quadrature-phase shift key) modulation. However, QPSK allows more data to be transmitted in the same bandwidth and is used by EchoStar [NYSE: DISH] for certain transponders, VOOM and with some C-band transponders.

3. MPEG-4 may double compression efficiency and, combined with QPSK modulation, will be the next technology advancement to allow a significant increase of specialty TV channels. With compliant receivers in the field, VOOM will deploy MPEG-4 for standard-definition (SD) channels in 2004 and high-definition (HD) in 2005.

4. Digital Broadband Application Corp. (DBAC) was granted authorization for DTH video service in the United States using Nimiq-1 and 2, which currently provide Bell ExpressVu service in Canada. These satellites cover the U.S. and Canada. We are not aware of any service currently marketed in the United States using the Nimiq satellites.

5. During the quarter, the center identified 13 new video channels seeking or planning to start service. An additional 70 channels previously identified appear active. These new channels will need satellite capacity for distribution.

Ed Morgan is president of the Communications Center, a Clarksburg, Md.-based consulting firm started in 1980 by Ed’s father Walter Morgan, who had served as senior staff scientist at Comsat. This article is based on the “North American Transponder Supply and Demand Report” available through the Communications Center ( http://www.communications-center.com ). Ed Morgan can be contacted by phone at 301/831-6700, by fax at 301/865-5577, or by e-mail at [email protected] .