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Summary

Both wholesale and retail buyers of communications services can expect ever-more competitive satellite communications services as new launches fuel technology developments, improve functionality, and increase affordability. As a result, we see satellite services becoming more mainstream choices for buyers attempting to break into new types of markets and new geographies. Five years ago, the future of satellite communications was being questioned; today, driven by wholesale business models, it is entering a new boom wave.

Faster, further, better…and cheaper?

Retail service providers are increasingly focused on priorities that require improvements in coverage, not just for basic telephony but also for advanced broadband services. As we explained in our 2016 report Wholesale Satellite Services: Ready to Meet the Broadband Challenge, increased demand from wholesale customers, including CSPs, systems integrators, and new platform players, is driving a new-found belief in the growth of the satellite industry. A flurry of satellite launches, new player and contract announcements, and technology advances in the first half of 2017 are proving that this expectation is now a reality.

Iridium launched another 10 satellites in June 2017 and is targeting a total of 75 by the middle of 2018. ViaSat-2 was launched a month earlier to provide greater coverage across North and South America, the Caribbean, and transatlantic routes between North America and Europe. These launches by established satellite providers delivered increased speeds and capacities to potential enterprise and wholesale customers. The new crop of low-Earth-orbit (LEO) providers were equally busy.

In June, Softbank subsidiary OneWeb gained FCC approval to launch 720 LEO satellites in the next couple of years, while new players Sky and Space Global (SAS) and Global IP began satellite production. All three have attracted considerable funding as the investment community expresses its belief in the future of the satellite services market.

The satellite market is one that is developing on all fronts including technology. In May 2017, an Avanti trial delivered speeds in excess of 1Gbps for a single carrier, while both Inmarsat and Iridium targeted the price barriers of satellite for the IoT market. Inmarsat launched a low-power network to target industrial applications for IoT that have very different requirements from traditional interpersonal communications. For its part, Iridium has launched an IoT device aimed at enabling customers to integrate satellite into IoT solutions easily and far more cheaply.

As discussed in Wholesale Satellite Services: Ready to Meet the Broadband Challenge, the increased competition and lower costs and latency associated with LEO satellites mean that prices are falling rapidly, which makes satellite a mainstream choice for service providers. In March, Axiata bought up the remaining capacity on Thaicom's IPSTAR satellite to deliver coverage across more of Indonesia's unforgiving topography, while Entelsat's services were behind a Newtec Dialog hub deployment for Mattel in Mauritius in May. In the same month, Telefonica Business Solutions expanded its satellite 3G and 4G backhauls solution in Brazil and Ecuador – a wholesale solution targeting mobile operators extending coverage into previously difficult-to-reach geographies. These represent the tip of the iceberg as there is little doubt that wholesale satellite services for broadband coverage and backhaul are now realistic alternatives to terrestrial connectivity solutions.

Appendix

Further reading

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

"Satellite announcements confirm the importance of wholesale service models," TE0012-000590 (February 2017)

Author

Catherine Haslam, Senior Analyst, Telecoms Wholesale

catherine.haslam@ovum.com

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