The relationship between telcos and satellite companies is complex. Some telcos own their own satellite assets, while others rely on leased capacity, to serve business and government clients.

A number of telcos have realized that in order to capture revenues from the TV market, having their own DTH operation makes as much sense as having an IPTV offer based on a next-generation network. And it when it comes to serving lucrative business and government customers, having satellite as part of your overall solution is a must. In Europe, telcos such as Telenor and France Telecom (Orange) still own satellite assets. While Telenor, through subsidiary Telenor Satellite Broadcasting (TSB), has no plans to give up its satellite fleet that provides capacity and a DTH platforms across the Nordic region Orange does not have any plans to acquire additional satellites. “We still own one satellite, the last of its generation. It is called Telecom 2D,” says Fabrice Barbedette, vice president networks and information system business, Orange. “It is at the end of its life in inclined orbit. I would say this is the only space asset that we own, but we won’t replace it. It is no longer in our strategy to own satellites.”

But Orange remains a heavy user of satellite capacity and “needs satellite” to serve its business and residential customers. “We own the assets on the ground, mainly the teleports and all the remote stations in 100-plus countries,” says Barbedette. “Our main ground asset is the FT teleport in France located in Bercenay-en-Othe. It has all the necessary redundancies and is pointing to 20-plus satellites with some antennas up to 32 meters. We have another teleport in France for broadcast and some smaller teleports in the French overseas territories and in Africa for some African affiliates.” Orange likely will need to acquire a great deal of capacity to serve customers who have operations in Africa. “In terms of leasing capacity, we are in daily contact with the various operators. The main area of focus is Africa, because this is where satellite is really needed. Europe is fairly well covered in terms of fiber and terrestrial infrastructure, so what is happening now is that the price of space capacity is very high. We need to do a very thorough network planning in terms of capacity.”

The issue that Orange faces is one that has plagued companies seeking to do business in Africa for years. “We have seen over the past three years a shortage of C-band capacity over Africa. We therefore need to plan quite some time in advance (two years in advance) to reserve capacity and know where we are going. We have a dedicated team looking at that as well as the financial elements behind that.” The telco likely will announce a deal for satellite capacity in 2011. “We are talking to multiple operators. We may lease capacity on multiple satellites, so up to two to three satellites to ensure resiliency,” Barbedette says.

Along with its video operations, Telenor has accumulated more than 184 million mobile customers, increasing the operator’s need for satellite capacity, says, Cato Halsaa, CEO of Telenor Satellite Broadcasting. “Telenor provides TV distribution and transmission services via cable, digital terrestrial and satellite networks, specifically in the Nordic markets, where the satellite part of the business is positioned. The media communications arm (including the satellite infrastructure required) is of benefit to Telenor as a telco, supporting the development of tomorrow’s strategy, which will be increasingly content rich and content dependant. Halsaa is optimistic that satellite will continue to play a vital role for Telenor. “Satellite has been the leading platform of development of HDTV and 3-D TV transmissions, where quality of service is of critical importance. [Telenor Satellite Broadcasting] has also invested extensively in its uplink facilities and associated ground based satellite infrastructure, allowing [Telenor Satellite Broadcasting] to operate a centralized headend for multiple transmission platforms, which includes the delivery of content for IPTV, DTT and VOD within the Nordic countries,” he says. 

Global Media Network

BT is another telco using satellite to help fill gaps and offer customers a more global, all-encompassing solution, and satellite plays a role in BT’s strategy. “BT has specifically invested a great deal in having a fiber capability, which is called GMN, or Global Media Network, and although BT’s business traditionally over the years has been U.K.-centric, BT expanded its offering across the world using MPLS services,” says Harry Formosa, general manager, client management, media & broadcast, BT Wholesale. “The global media network has rolled out to around 40 locations globally, so India through to Singapore, the United States, Europe and all the major content conurbations, Hollywood, Bollywood, etc. In terms of BT Media & Broadcast investment, over the last two to five years, this has been on video enabled capability,” he says.

BT recently closed a deal with Israeli company RRSat to bring a satellite component to this network. “The basic deal structure with RRSat is a reciprocal agreement where both parties have agreed committed spends to one another. On that basis, they have access to our GMN network, and we have access to their satellite networks and their playout capabilities. That augments each others core strength in the market place,” Formosa says. “We can sell end-to-end services. They can sell end-to-end services. It gives us a wider footprint, without the need to physically invest or try and build that capability.”

Formosa says the deal with RRSat could open up new markets for BT, including potential deals with the U.S. military. “We are also looking for RRSat to work with us in terms of growing the business. We are also looking at developing other applications to enhance our customer offerings. For example, we have ongoing discussions with Xtar to develop a file transfer application and a high-value video type solution into small manpacks and small dishes. It is not something that is new in terms of technology, but it is pulling the right components together to make it very usable and add value to the user. It is currently at a trial stage,” he says. 

Overcoming Geography Issues in Asia

Bharti is one of India’s biggest wireless operators, with more than 100 million subscribers, and also has nearly 3.5 million customers for its DTH services. As well as using satellite to attack the consumer market, Bharti also uses satellite in the business market to improve connections in rural parts of India. “Satellite services constitute an essential and strategic component of our telecom portfolio,” says Ajay Chitkara, CEO global data business, Bharti Airtel. “It enables us to service all the three critical segments: enterprise, small and medium businesses and [small office/home office] users. We use satellite to extend connectivity and VSAT solutions to our customers. We use satellite for delivering TDM/TDMA technology in Ku-band. We also provide SCPC services in C-band. We also cater to the broadcast needs of media customers in countries like Bangladesh, Africa and the Middle East using satellite. We offer VPN and Internet services in different flavors varying from pooled bandwidth to bandwidth on demand. With the evolving technology, customers have more options available.”

Optus, which is owned by SingTel, is one of Australia’s major telco’s and also owns its own satellites to serve a population spread across a large landmass. “The capabilities of satellite are key to our business. We offer our customers communications solutions that offer freedom and mobility. The unique benefit of a satellite service is that it removes terrestrial boundaries and offers customers the flexibility to move their service anywhere within the country or even offshore,” says Paul Sheridan, director of satellite, Optus. “This can be the delivery of services to remote mobile towers, providing links to remote locations or an extension to cellular services. Satellite also provides disaster recovery services and connections for our key terrestrial paths. From the satellite side, we leverage this technology to determine whether we need to co-locate satellite with where we are building exchanges, because these are major trunks that connect those sites. A perfect example of that is a site we recently built in Hume, Canberra. It is the primary connection for our latest satellite — D3. For the terrestrial side of the business, it is a major exchange for the Canberra area.”

The Australian government has implemented the Australian Broadband Guarantee (ABG) policy, an effort to provide broadband access to all citizens and one that subsidizes the purchase of satellite equipment by rural users. “Recently, the government allocated more funding, so the program will continue. That will address the delivery of these new technologies,” says Sheridan, and Optus has looked to bring higher quality services to users beyond the basic requirements of the ABG. “We have also recently launched Optus Premium Satellite, a satellite Internet service that will bring ADSL like speeds to customers in remote and regional areas. It is about six times faster than the speeds available via Australian Broadband Guarantee satellite services,” he says. 

U.S. Telcos Use Satellite to Go Overseas

In the United States, Verizon does not offer any TV service via satellite but does use satellite as part of its global services portfolio, which includes VSAT connectivity services for enterprises and government customers around the globe. “Our primary satellite solution is a network-based IP VPN (virtual private network) solution that utilizes IP-over-MPLS (multi-protocol label switching) technology and is known as Private IP Satellite. Private IP Satellite is another way to access our Private IP MPLS network that allows Verizon to provide service to customers in areas where traditional telecom assets are not available, are unreliable or are cost-prohibitive,” says Diane McCarthy, senior vice president, customer experience for Verizon Partner Solutions. “Our customers are challenged by the question of how to ensure always-available network connectivity to run applications with consistent levels of performance and security at a reasonable cost and with minimal management oversight. The answer is to incorporate satellite services into their solution. Of next importance to these customers is the business continuity aspect to help circumvent network interruptions. … Not only are our satellite solutions used for primary voice, data and multicast communications, but our customers also rely on us for reliable back-up services to improve availability, reassure business continuity and/or enhance disaster recovery capabilities. Bottom line, our Private IP Satellite Service provides connectivity to remote locations from virtually any place within the satellite coverage area, she says. ” 

Renaissance

With more competition than ever in their domestic markets and traditional markets eroding before their eyes, telcos are having to invest aggressively to stay relevant in a new media world. Satellite, while not serving as a primary solution for many, offers telcos numerous advantages when teamed up their own networks. Satellite has had a renaissance amongst the telcos, and there are a growing number of examples of its heightened use amongst that community as telcos bid to stay ahead of the game, both in the business and government markets, as well as evolving media and pay-TV markets.