WASHINGTON, DC – After much talk over recent years, it appears as though time is now right for Ka-band to play a pivotal role for satellite operators. On a panel at Satellite 2003, the message appeared to be that crunch time is rapidly approaching. Some next-generation systems, such as Teledesic and SkyBridge, have not moved forward, leading many to doubt the potential of Ka-band services.

But many established satellite operators are still confident that the Ka-band revolution will happen – that Ka-band will become a story about execution, not potential.

Perhaps the most aggressive player is Hughes Network Systems (HNS), which has been working on its $2 billion SpaceWay satellite broadband system. Each Ka-band satellites that HNS is putting up has the equivalent capacity of five to eight existing Ku-band satellites, according to Mike Cook, senior VP and general manager of SpaceWay. Speaking on a panel here at Satellite 2003, Cook said that operating in globally assigned Ka-band spectrum, SpaceWay will employ high-performance, on-board digital processing, packet switching and spot-beam technology to offer single-hop connectivity, regardless of location. The satellites are scheduled to be launched this year with commercial services beginning in 2004 in North America. It is certainly one of the most ambitious players out there.

Others also see SpaceWay as a key barometer for Ka-band services. Greg Caressi, research director for information and communications technology at Frost and Sullivan, observed: “SpaceWay has great importance as [it will be] the first one out there.”

Cook is optimistic about the opportunities and believes the next generation system will open up new market segments for the operator. “SpaceWay anticipates three times lower capital expenditure compared to a Ku bird over a lifetime. We are going to compete in mainstream terrestrial broadband markets. The addressable market increases tenfold. SpaceWay opens significant potential for value-added, media-rich content services.”

Others are also stepping up their Ka-band plans. Robert Hedinger, executive vice president of business and product development at Loral SkyNet, told the panel: “Ka-band is alive and well. We are moving forward. Why is Ka-band coming back? There is a fundamental reason why it is happening. Ka-band technology offers operators a chance to compete with terrestrial economics with VSAT advantages of ubiquitous coverage and multicast economies. With IP multicast and ubiquitous coverage, economics of broadband applications become more palatable to increasingly discriminating enterprises.”

No ‘Field of Dreams’

Yet, Loral SkyNet is taking a cautious approach despite the potential opportunities. Hedinger admitted Loral was not going to putting all its eggs in the Ka-band basket. “We are taking a hybrid approach for an initial offering. A conservative approach enables us to continue to invest in this technology when others have fallen by the wayside. At a later date, we will add a Ka/Ku satellite. We will only build if the market is there. We feel this is not a ‘field of dreams’. We are making incremental investments to match an uncertain market.”

Robert Bednarek, SES Global’s executive vice president of corporate development, highlighted the market opportunities for Ka-band services in Europe. “By 2005, there will be 7.4 million homes with no terrestrial broadband connection in Europe and more than four million homes with no terrestrial broadband connection in the United States. Existing Ku- band up-link frequency allotments are insufficient for large-scale commercial and residential developments.”

While operators seem to be genuinely upbeat about the prospects for Ka-band services, analysts believe some of the market opportunities may be shrinking. Nihar Shah, senior analyst at Futron Corp., commented, “There is still not a single commercial Ka-band payload covering North America. The window of opportunity is closing. We are on the high-growth part of the broadband uptake. Satellite players are going to have to accept what market is left for them. Studies have shown that there is very little incentive to choose another provider. Satellite players will have trouble moving customers away from cable or DSL. You are potentially looking at a lost market opportunity … Cable and DSL price points are hitting price points that Ka-band cannot match.”

Caressi admitted there may be problems in consumer market for Ka-band satellite services. “The consumer market is much less promising. It is more price sensitive. It is limited to what terrestrial cannot cover. Satellite broadband service has developed very poorly in Ku-band.” The military and business arenas may yet prove the saving grace for Ka-band services, he added. “The U.S. military will play a decisive role in the development of Ka-band for satellite communications. The military is a wild card in the development of Ka- band. It offers smaller antennas for higher mobility. It has higher resistance to jamming.”

Leslie Taylor, president of Washington, D.C.-based Leslie Taylor Associates, struck a more optimistic note. She said, “The Sky is not falling. Cable and DSL are showing steady growth, but they can’t reach every potential user. Satellite is complementary to terrestrial alternatives. Satellite players are indirectly benefiting from the slow take-up of terrestrial alternatives. Some Ka-band systems such as WildBlue, SpaceWay, IPStar, and possibly a reborn Astrolink and SES Astra, are moving forward.”

Thomas Tycz, chief of the Satellite Division in the Federal Communications Commission’s International Bureau, told the satellite operators on the panel that they needed to meet their regulatory “milestones,” or deadlines, if they plan to deploy Ka-band systems. “We are currently reviewing all of the milestones for these satellite systems and our intention is to act on these the next quarter … We are going to continue to enforce milestones, looking at contracts,” Tycz said.

The FCC is reviewing applications for extensions for a number of systems, Tycz told panelists. The scope of many systems has been reduced. “Considering the economic climate that we’re in, I’m sure many of these licensees look at their business plans to see which of these satellite systems are viable,” he said, adding, “I expect a number of these companies to return some of their licenses.” –Mark Holmes