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Europe: Leading The Pack For Satellite Standards
By Chris Baugh, Northern Sky Research
DVB-RCS (DVB return channel via satellite) and DOCSIS (data over cable service interface specification) are emerging as viable standards for broadband satellite service. Both standards offer the promise of lower equipment costs, lower service delivery costs, interoperability, greater customer choice, and market scalability. Basing a satellite service on either standard theoretically creates a situation similar to that of the terrestrial world where downward price pressure and equipment choice from multiple vendors is the norm.
Europe is now (and has been) the center of standards-based activity in the satellite market. The SatLabs project from the European Space Agency (ESA) and the strong acceptance of standards by virtually every European satellite operator point to a leadership position for this market. Many new standards-based business cases are emerging from the European market, and it is safe to assume companies from other regions will closely monitor the success or failure of standards in Europe.
Standards are such an important issue in Europe that even Hughes Network Systems, the leading global VSAT vendor, said that it is considering the rollout of a DVB-RCS platform in Europe. This public admission by a company historically intent on developing sole supplier, “proprietary” technology is strong evidence that standards have a play in the European market.
Based on market data gathered by Northern Sky Research (NSR) the global DVB-RCS market today consists of approximately 32 DVB-RCS hubs and 8,500 commercially deployed terminals. Of the 8,500 terminals, the majority (58 per cent) are deployed in Europe.
In terms of planned deployment for DVB-RCS and DOCSIS, Europe again leads the pack when deployment plans are gauged over the next 18 to 24 months. In fact, NSR estimates that 39 per cent of all planned DVB-RCS and DOCSIS deployments in the next three years will take place in Europe. This leading market share far outpaces planning in every other geographic region.
Europe’s current and projected majority market share can be traced to a number of key factors. First, regional and European-based global satellite operators have been among the first to adopt standards for use in a broadband satellite network. European-based operators such as Eutelsat and Hispasat have wholeheartedly adopted DVB-RCS and DOCSIS as important components of their platform development.
Luxembourg-based SES Global, the largest global satellite operator, was actually the first operator to adopt DVB-RCS as the standard for its interactive satellite service. The company worked in conjunction with vendors such as Nortel, ND Satcom and EMS to develop, integrate and operate a DVB-RCS platform. The platform, which was subsequently renamed BBI, is now within the framework of SATLYNX, the new broadband satellite service provider created by SES Global and Gilat Satellite Networks.
Second, the formation of the European Satlynx venture signifies the highest profile endeavor yet to roll out standards-based broadband satellite services. Formed in 2002, Satlynx incorporates the funding, technology and expertise of Alcatel Space, Gilat and SES, three of the largest commercial satellite companies in the world. DVB-RCS had for many years been (and perhaps still is) a fringe technology targeted to only a minor portion of the enterprise space. Until Satlynx was formed, it was clear the DVB-RCS market lacked validity until large companies entered. This validation has now occurred.
The formation of this new venture may significantly alter the landscape for standards-based satellite services in Europe. The positive outcomes from the Satlynx venture are clear:
- Satlynx shows a strong commitment of three large satellite vendors (SES, Alcatel Space, and Gilat) to support the emerging DVB-RCS standard. The formation also validates the business of smaller competitors to some degree.
- Development and manufacturing capabilities from the large vendors is seen as a catalyst to reducing costs and scalability, both of which are sorely needed in this space.
- All three companies bring significant pools of customers, financing and resources to the entity that collectively create a well-rounded service provisioning company.
In addition, the formation of ESA’s SatLabs venture shows commitment by European vendors and operators to standards. Initiated by SES, Eutelsat and ESA, SatLabs is committed to bringing the deployment of DVB-RCS to large-scale adoption by ensuring the availability of interoperable DVB-RCS products. The group also attempts to achieve lower user terminal cost by exploiting commonalities among different systems, defining and developing common critical components and technologies, and defining common practices and recommendations.
Lastly, the European market has begun to generate growth of DVB-RCS services through smaller ISPs and NSPs with a limited geographic scope. Aramiska is perhaps the most well- known of these endeavors. The private Netherlands-based company offers an enterprise-class DVB-RCS service to small and medium-sized enterprises (SMEs) in Western Europe. Despite early growing pains and a troubling market for enterprise services, Aramiska appears to be obtaining healthy subscriber figures for a new service company. Service elements and pricing are quite competitive, and the company aims to achieve profitability in the next 12 months.
Market Growth Potential
The market potential for DVB-RCS and DOCSIS platforms in Europe is apparently high given the increasing level of interest and number of standards-based endeavors. Both DVB-RCS and DOCSIS will likely generate increasing sub totals in Europe, but ultimate growth will be determined by a number of key factors (economics, cost, competition, regulatory, etc.).
NSR estimates the DVB-RCS market in Europe will grow from roughly 4,900 sites in 2002 to over deployed 58,000 sites in 2007. Similar growth patterns are expected in the European DOCSIS over satellite market, where NSR expects 45,500 subscribers by 2007. Both forecasts represent modest, but achievable, targets for European satellite players.
Catalysts Required for Growth
Despite growth potential and arguments in favor of standards, it must be acknowledged that a significant amount of development work must occur for DVB-RCS and DOCSIS to become more widespread in Europe. In the DVB-RCS space, costs must continue to reduce to levels acceptable to a broader enterprise customer base. More ISPs like Aramiska must also offer service, and the Satlynx venture must achieve early success in order for partnering companies and resellers to remain committed to the standard.
For DOCSIS to succeed in Europe, satellite players must develop a true specification within the framework of CableLabs or another standardization forum. DOCSIS over satellite today is a tweaked version of a terrestrial cable standard and must be standardized to allow for multiple vendors to develop interoperable solutions.
In addition, more satellite and non-satellite vendors must develop DOCSIS solutions. Low cost and high performance claims for DOCSIS must be validated, especially since DOCSIS is not yet commercially deployed. Lastly, the European market will closely watch the fate of WildBlue in the North American market in order to judge the effectiveness of DOCSIS in a large satellite network deployment.
This article is based on a NSR report entitled “DVB-RCS and DOCSIS: Evaluating Prospects for Standards-Based Broadband Satellite Growth.” Information can be found at http://www.northernskyresearch.com/reports/DVB/index.html.
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