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Summary

Through January 2017, a number of satellite service announcements demonstrated the increasing importance of the latest satellite technology in helping wholesalers meet the needs set by next-generation consumer and business services. They also provide further evidence that it is wholesale not retail models that are driving growth in satellite services.

Technology inspires new service launches

In our September 2016 report Wholesale Satellite Services: Ready to Meet the Broadband Challenge, we identified a growing momentum behind the provision of wholesale satellite services to enable broadband in preference to direct retail models. Largely based on technology innovation, this momentum is now creating new competition in the market with Hispasat, Iridium, and Intelsat all launching new satellite services in January 2017.

Iridium launched 10 of a planned 70 new low-Earth-orbit satellites and is targeting telcos and M2M/IoT service providers with the lower-latency services. Hispasat cited cellular backhaul and broadband solutions as the drivers for the launch of its H36W-1 satellite, complete with its SmallGEO platform that also incorporates RedSAT, which delivers reconfigurable beams that are optimized by onboard processors to increase efficiency. Intelsat, meanwhile, has confirmed the commercial availability of its high-throughput-service Epic 33e satellite to meet demand for direct connectivity and backhaul services.

So much activity among satellite service providers is no mere coincidence; it is a demonstration of suppliers' belief in new technology to change both performance and economics. There is also a clear understanding that those benefits are best sold to CSPs and not directly to consumers or business users. CSPs are now a major growth segment for satellite service providers, whereas not so long ago they were seen as a customer group in terminal decline. Wholesale satellite services are changing for the better but still face many challenges, not least of which is getting the right value chain in place.

Ovum's Wholesale Satellite Services: Ready to Meet the Broadband Challenge report also found that delivering satellite-based broadband services in emerging markets requires a complicated combination of expertise. Another attempt to address these difficulties is the OneWeb satellite project aimed at connecting the unconnected to the internet. Having invested $1bn in the project, Softbank is now promoting the benefits of satellite technology for backhaul to fellow CSPs. It is hoped that the voice of a well-known CSP will add weight to the argument and bring new interest in the capabilities of satellite from what is still a largely skeptical audience. Only time will tell, but progress is being made.

Appendix

Further reading

Wholesale Satellite Services: Ready to Meet the Broadband Challenge, TE0012-000578 (September 2016)

Author

Catherine Haslam, Senior analyst, Telecoms Wholesale

catherine.haslam@ovum.com

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