By D.K. Sachdev, SpaceTel Consultancy

Even a cursory look at the overall financial performance of the satellite industry during the last few years makes it obvious that the future for the industry is in end-to-end services. Current figures for the services sector are dominated by satellite-TV broadcast revenues, with satellite radio providing clear signs of achieving a matching performance in the coming years. Among the other satellite-based services with a potential to make a similar impact is broadband or Internet access — under a variety of scenarios.

Encouraged in part by the perceived commonality with DBS, the early attempts for satellite broadband have used such wide-area Ku-band beams as CONUS for offering broadband to Small Office/Home Office (SOHO) customers. So far, such offerings have not been credible alternatives to other technologies, mainly due to high consumer-equipment costs as well the high cost of satellite capacity.

After some introspection and false starts, the industry is readying to launch in the next 18 months or so three different broadband systems, each addressing different market segments. Each will have unique system architectures. The key business and architectural features of each of these systems are summarized below:

iPSTAR is a bold and comprehensive venture by Shin Satellite (SSA) of Thailand that plans to provide a full range of broadband services across much of Asia later this year. It will cover all of China, India, South East Asia, Australia and New Zeeland through a combination of 84 spot beams and three shaped beams, all in the traditional Ku-band. Due to much heavier precipitation losses in such regions, the use of Ka-band is limited to feeder links to gateways. The total uplink and downlink capacities of these beams add up to a staggering 45 Gbps. That level effectively will double the total current capacity in Gbps in all of Asia. The service offerings cover a wide spectrum of applications from Internet backbone to connecting hot spots and homes to Internet portals. The spacecraft, built by Space Systems/Loral, has only bent-pipe transponders without any onboard processors. The spacecraft utilizes dynamic power and bandwidth control on-board. A notable aspect of this project is that well-ahead of the spacecraft launch, the different types of consumer equipment have been tested using existing Ku-band capacity on Thaicom satellites.

Spaceway Speculation

The Spaceway program, long the de facto flagship of the U.S. broadband sweepstakes, is approaching the launch of two of its spacecraft in 2005. Each of the Boeing-built Ka-band satellites has a powerful onboard processor capable of providing significant flexibility and direct peer-to-peer connectivity. Each satellite has 112 uplink beams and 24 hopping downlink beams, each with a throughput capability of 440 Mbps. The downlink also can zoom into any of the 784 microcells when needed. The uplink speeds can vary from 512 Kbps to as much as 16 Mbps. The spacecraft is designed to provide a range of services besides peer-to-peer connectivity, including multicasting and broadcasting. Until recently, the primary market segment was the potential $40 billion enterprise segment. The DirecTV Group [DTV], Spaceway’s parent company, has clarified that the spacecraft would be able to serve both broadband and TV markets.

The third new system, also for the United States, is the WildBlue program. It is targeting the home market, specifically the nearly 30 million homes without access to any of the two high-speed terrestrial alternatives — DSL or cable modems. WildBlue plans services with a relatively modest speed target: 500 Kbps downlink and 256 kbps uplink. Both speeds are considered adequate to attract the much slower dial-up users by charging a monthly subscription fee of $50. The system also is capable of offering higher downlink rates, as fast as 1.5 Mbps. In the first instance, the service is to be provided via the Ka-band transponders on Telesat Canada’s Anik F2, scheduled for launch next month. This initial thrust will be followed by the launch of a dedicated spacecraft being built by Space Systems/Loral. At the consumer end, the company is adopting the cable-modem standard, DOCSIS, with appropriate RF equipment. Currently, Viasat [VSAT] of Carlsbad, Calif., and U.K.-based Raven have been contracted for the consumer equipment and antennas, respectively.

Competitive Costs?

Will any or all of the above systems succeed in their own objectives and in building a permanent place for the satellite industry in this critical market sector? Yes, if they are able to demonstrate the principal success criterion for long-term presence in the market place. To do so, they need to have a competitive total intrinsic cost to the consumer that is made up of the cost of installed equipment and the amortized cost of the utilized spacecraft capacity.

For the installed equipment cost, there is a modest trend downwards, but it’s not moving fast enough. While all systems project further drops with volume, the lack of an industry-wide standard is another factor. It is ironic to learn at conferences, for example, that every body is for the DVB RCS standard, but only one’s own version of it! Seeing the phenomenal success of the 802 series of wireless standards, maybe it is time to entrust this task to IEEE!

For the space-segment capacity costs, it has been well-established that the unit cost of utilization drops quite steeply as the total spacecraft capacity is increased. Multiple-beam Ka- or Ku-band spacecraft have been shown to provide very high levels of capacity without equivalent increases in costs. Furthermore, if such spacecraft have on- board processing, they enhance their ability to utilize the available capacities through flexible connectivity pathways. As an example, data published by iPSTAR associates claims this spacecraft will have 20 times the capacity of a conventional spacecraft with only 25-percent higher costs. Even if these numbers are proved to be wrong by a factor of two, the benefits in terms of lower unit cost via higher capacity are quite compelling. Experienced professionals no doubt would add a note of caution here. A spacecraft with large capacity is cost efficient only if the necessary, and significant market share can indeed be captured.

Three Pioneers

The industry as a whole has a lot at stake in the several broadband initiatives underway, including the three specific programs highlighted in this column. For a long-term role in this market segment, it is important that the offerings are competitive with those of other media. DBS initially targeted fringe and underserved markets, partly due to technological limitations. That is not necessarily the case for broadband. The industry has a lot to offer in terms of efficient, high-capacity spacecraft as well as consumer equipment. It is for the operators to develop credible business models with acceptable risks and to push the equipment industry to standards that are, indeed, used by all.

D.K. Sachdev is president of SpaceTel Consultancy of Vienna, Va. He can be reached at 703/757-5880 or by e-mail at [email protected].