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A single \u201clast mile\u201d is separating European satellite operators from a broadband consumer market potentially worth millions of customers and dollars.<\/strong><\/p>\n Common wisdom has it that broadband have-nots<\/b> reside mainly in the developing world. This is, of course, largely true. In its 2009 report \u201cMeasuring the Information Society \u2014 The ICT Development Index,\u201d the International Telecommunication Union (ITU) reported that fixed broadband penetration notches 4 percent in Asia and the Pacific and just 0.1 percent in Africa \u2014 meaning there is just one fixed broadband subscriber in Africa per 1,000 people.<\/p>\n Yet, it would be a mistake to assume that broadband access is a problem limited to the least-developed regions of the world. In the same report, fixed broadband penetration in Europe is thought to be at 20 percent, with peaks of nearly 60 percent of the population reported to be \u201coffline\u201d in Eastern European countries such as Hungary. The overall European average for percentage of the population without access to the Internet, while lower than that, remains remarkably high. \u201cLatest figures for Internet penetration in Europe show that 58 percent of the population uses the Internet,\u201d says Aarti Holla-Maini, secretary general of the European Satellite Operators Association (ESOA).<\/p>\n These numbers appear to be staggering to those not familiar with these issues, but their importance, however, is not so much in the numbers per se, but in their consequences for society at large \u2014 i.e., what they actually mean for individuals, communities and nations alike. The ability to exchange information, in fact, is crucial to economic development, and in this sense broadband is, just like water and electricity, an integral part of national infrastructure. \u201cIn the 21st century, affordable broadband access to the Internet is becoming as vital to social and economic development as networks like transport, water and power,\u201d says ITU Secretary General Hamadoun Tour\u00e9.<\/p>\n It is widely believed that future social and economic development will depend in large part on the availability of broadband networks. E-services in areas such as health, education, finance, etc., which increasingly will contribute to the wealth and quality of life of individuals and communities, would be unthinkable without broadband access to the Internet. The issue, in other words, is no longer one of \u201cdigital divide,\u201d as it was known within industry circles until recently. Rather, it is turning into one of a broadband divide.<\/p>\n Perhaps more importantly, however, is the definition of such divide. It would be a mistake, in fact, to assume that this is simply a north-south issue, as demand for broadband access to the Internet is high in the underserved areas of the developed world. This is commonly referred to as the \u201clast mile\u201d market, though within the satellite industry there seems to be a need to redefine this. \u201cIt may be worth clarifying that the term \u2018last mile\u2019 refers to the last percentage of people out of terrestrial telecom coverage and not what is generally understood in the satellite industry: the last part of the telecoms infrastructure to reach the end customer also known as \u2018local loop,\u2019\u201d says Holla-Maini.<\/p>\n \u201cAs we deliver full access to every household in the footprint of the satellite, satellite broadband is an end-to-end solution and not just a solution for the last mile,\u201d says Patrick Biewer, vice president of technology at Astra Broadband Services. Crucially, then, the opportunity for satellite lies in serving customers outside of terrestrial telecoms infrastructure. Biewer adds, \u201cWe target unserved and underserved households mostly in rural regions which cannot get access via terrestrial broadband networks.\u201d<\/p>\n As such, the developed, affluent markets of Europe and the United States are primary targets for satellite broadband service providers. <\/p>\n But how big is this opportunity? Naturally, estimates vary, but all experts seem to agree that the untapped market in Europe is huge \u2014 at least potentially. \u201cAccording to the European Commission, millions of people today still have no access to broadband,\u201d says Holla-Maini.<\/p>\n \u201cAccording to the latest surveys, between 5 percent and 10 percent of all European households are still not connected to broadband,\u201d Biewer says. \u201cAs most of these households are located in rural areas with low population rates, the expansion of terrestrial fiber networks is very unlikely. In order to connect them to the broadband Internet fast, satellite broadband is the ideal solution.\u201d<\/p>\n Naturally, these sentiments are widely shared within the European satellite community. \u201cThe market for satellite consumer broadband in Europe is estimated to be at least 30 million households in Europe and another 18 million in North Africa and Middle East,\u201d says Arduino Patacchini, Eutelsat multimedia director and CEO of Skylogic, a Eutelsat subsidiary. \u201cThis data includes not only the people that are unserved (i.e., they do not have ADSL connectivity) but also those underserved that have a poor connectivity due to the fact that they are too far from a DSLAM to have a reasonable quality of service.\u201d<\/p>\n Although terrestrial and wireless broadband networks are expanding at a fast pace throughout Europe, there are still many geographical areas without broadband access to the Internet. In these regions, investing into the development of high-speed broadband networks such as VDSL or fiber may not be economically viable.<\/p>\n To understand the exact dynamics of the issue, it is worthwhile to take into consideration the example of one of Europe\u2019s most densely populated and dynamic markets: the United Kingdom. \u201cIn the case of the United Kingdom, for instance, we want to extend the fiber connection, now limited to only a few percent of the population,\u201d says Patacchini. \u201cThe cost of deploying fiber (FTTP\/PTP) is around 30 billion pounds ($46.8 billion). In addition, if we analyze the cost of bringing broadband to the areas that are concerned by the digital divide, we see that the cost per household served increases dramatically due to the dispersion of the population. So if you try to connect the last 7 percent of the population, the cost is around 5,000 pounds ($7,800) per household, or 28 percent of the overall cost.\u201d<\/p>\n According to the latest surveys, between 5 percent and 10 percent of all European households are still not connected to broadband. As most of these households are located in rural areas with low population rates, the expansion of terrestrial fiber networks is very unlikely. Clearly, even in the case of the United Kingdom, the economic factor does not seem to be on the side of fixed terrestrial solutions. In addition, the issue of increasing demand should be taken into consideration. The size of the broadband market is getting bigger because consumer demand is rising. \u201cThese days many terrestrial service providers offer broadband speeds of 8 megabits per second (Mbps),\u201d says David Williams, CEO of Avanti Communications, a provider of satellite broadband to homes and businesses in rural and remote areas of the United Kingdom and Europe with 14 years of experience in the satellite industry. \u201cHowever, speed depends on the distance a user is from the node and often actual speed is no more than 2 megabits per second. There is rising demand from the edge of terrestrial networks which will only make this worse.\u201d<\/p>\n Satellite technology, on the other hand, is the only broadband technology that provides 100 percent coverage \u2014 no matter if households are located in metropolitan or rural areas. A further advantage compared to other technologies is the fact that the satellite broadband connections can be set up immediately without high investment in terrestrial infrastructure. Users only need a satellite antenna and a modem to get their broadband access. \u201cAnother major advantage of satellite-based services is the fact that the upfront investment cost per user is clearly known. On the contrary, this capex cost for terrestrial services is linked to the number of consumers using the local loop,\u201d says Holla-Maini. \u201cTelecom service providers might be investing, in some cases, millions of Euros to end up servicing only a few consumers, so it is clear that satellite based solutions are also most economical for serving regions with low population density.\u201d<\/p>\n As such, it is no surprise that satellite broadband plays a major role in the broadband development plans of the European Union and the national European governments. Europe\u2019s political institutions have realized that their aim to provide broadband connections of at least 1 Mbps for all households cannot be reached without the satellite. \u201cOur Astra2Connect service is part of a number of projects in Europe which use the satellite broadband technology to close the white spots,\u201d says Biewer.<\/p>\n In many cases, governments are even directly contributing to satellite solutions. There already are fixed subsidization schemes in France, the Netherlands, Wales and Scotland for households without access to terrestrial broadband networks. In Germany, the federal state of Baden-W\u00fcrttemberg currently is testing subsidization schemes for satellite broadband in the white spots. Other countries, such as Spain and Poland, are following their example.<\/p>\n But how successful is satellite broadband in Europe? Are customers voting for satellite solutions with their wallets? Is broadband via satellite truly proving to be a killer application for the industry? While this remains in the early states, and industry-wide numbers are, at least for the moment, still difficult to interpret, there is clear optimism in the air. \u201cIn about two years of operations, the satellite broadband market has grown to about 100,000 consumers using the service offered by various providers,\u201d says Holla-Maini. More than 60,000 of these are claimed as customers by broadband service Astra2Connect, though, as Biewer stresses, \u201cthere is still a great potential.\u201d<\/p>\n Will broadband via satellite continue to grow? Many factors will influence its destiny. Naturally, a major issue is that of bandwidth capacity. Notoriously, the bandwidth available on conventional C- and Ku-band payloads is, relatively speaking, limited, certainly not suitable for serving hundred of thousands of individual users \u2014 as well as mostly earmarked for other applications. With the launch of Ka-band platforms, however, this part of the equation will change and those operators that are investing in Ka-band will have the potential to serve a considerably larger customer base. Eutelsat seems committed to developing Ka-band platforms, says Patacchini. \u201cThis role of satellite is possible thanks to the new high-throughput satellites (HTS) that with spot beams and Ka-band have a much bigger capacity than a traditional satellite. Ka-Sat, Eutelsat\u2019s satellite that will be launched in November 2010, is a HTS that has the capacity of 35 traditional Ku-band satellites and will enable cost-effective consumer broadband to serve more than 1 million households in Europe and the Mediterranean Basin.\u201d<\/p>\n There is no doubt, in fact, that Ka-band will multiply bandwidth capacity over Europe\u2019s skies. \u201cIn the near future, with the launch of Ka-band satellites over Europe, there will be sufficient capacity to serve the increasing number of consumers relying on this technology,\u201d says Holla-Maini. \u201cThanks to the advances in ground equipment and satellite technology, monthly service and equipment costs are now really becoming a viable option for millions of consumers.\u201d<\/p>\n However, this is only part of the story. While important, bandwidth availability is not the only constraint to business growth \u2014 so far, for example, SES Astra seems to be still rather reticent about Ka-band plans and yet fully committed to broadband via satellite. The reality is that in order to succeed, satellite broadband requires operators to enter what is a largely uncharted territory for fixed satellite service providers: the consumer market. <\/p>\n Selling services directly to consumers is a relatively new experience for fixed satellite operators, which traditionally have thrived in the corporate market. Yet, the satellite industry has been engaged in providing services to the consumer market for years. The likes of Iridium and Inmarsat, for example, provide mobile satellite services to a large customer base that, at least in part, could be considered to be made up of \u201csimple\u201d consumers, however, it is in DTH television that the satellite industry has remarkable experience of customer relations with the general public. There are signs that, at least in Europe, operators are being inspired by their experience with the DTH business model of partnerships with domestic distributors. For example, SES Astra\u2019s satellite broadband service Astra2Connect is marketed to end customers via wholesalers and local ISPs in Europe, Africa and the Middle East. \u201cAmong those are several telco incumbents such as Deutsche Telekom, France T\u00e9l\u00e9com and Telekom Polska,\u201d says Biewer. \u201cFor them, Astra2Connect is an ideal solution with which they can offer customers access to broadband although their terrestrial networks do not reach that far.\u201d<\/p>\n Similarly, Eutelsat\u2019s Skylogic has signed a string of local distributors to market Tooway, the company\u2019s brand for consumer broadband services. \u201cWe already have more than 60 distributors in Europe that distribute the Tooway service,\u201d says Patacchini. \u201cAmong these distributors we have: Swisscom, SFR, Tiscali, Fastweb, Telecom Italia, Hellas On Line, El Corte Ingl\u00e9s and 3 (Ireland) via one of our value added resellers.\u201d<\/p>\n This seems to be an industry-wide approach for European players, as the case of Avanti shows. \u201cWe sell our services through local partners rather than directly to consumers,\u201d says Avanti\u2019s Williams. The company is about to launch its own satellite fleet. Hylas 1 is expected to launch in the second half of 2010, while Hylas 2 will follow in 2012. While they are expected to inaugurate a new era for Avanti, its business model is not set to change: Local distributors based in European countries ranging from Ireland to Albania will act as intermediaries with consumers, providing them with hardware as well as services. \u201cMost consumers will require a third-party dish installation, similar to that done by DTH service engineers: roughly one hour to install a 70-centimeter antenna and a cable running to a computer,\u201d says Williams. \u201cThe system is plug-and-play, and there is no software on the client\u2019s PC.\u201d <\/p>\n One question remains hanging over the future of satellite broadband services. Are terrestrial wireless technologies such as WiMax and mobile phone networks stealing the limelight, and the customers from the wireless technology par excellence, i.e., satellite? The answer from the satellite industry seems to be unanimous. Due to the existing satellite infrastructure and open capacity, satellite broadband has the best time to market compared to terrestrial and WiMax solutions. The competition coming from mobile phone networks is also generally dismissed. \u201cMobile phone networks do not have the capacity to deliver throughput to fixed users, and some mobile networks are already putting a cap on customers\u2019 data usage\u201d says Williams. \u201cUnfortunately, often there is confusion in the industry between mobile users and fixed users and their respective requirements.\u201d Williams take on the issue is clear: There is no real competition between satellite and terrestrial wireless system, rather the two complement one another. \u201cThey do not provide substitute to fixed broadband services,\u201d he says. \u201cRather we provide services to them by providing backhaul capacity.\u201d<\/p>\n The future might be one of cooperation between different technology operators. There are several examples of European telcos proposing a satellite-based service for consumers who want a broadband connection but are outside of terrestrial coverage. \u201cIn France, we also have WiBox on board as distribution partner for Astra2Connect, a WiMax operator which is complementing its portfolio with the satellite service to cover the entire French territory,\u201d says Biewer.<\/p>\n It looks like that after years of undeclared war between them, the old enemies might have learned to live side by side and prosper for their benefit and that of consumers.<\/p>\n","protected":false},"excerpt":{"rendered":" A single \u201clast mile\u201d is separating European satellite operators from a broadband consumer market potentially worth millions of customers and dollars. Common wisdom has it that broadband have-nots reside mainly in the developing world. This is, of course, largely true. In its 2009 report \u201cMeasuring the Information Society \u2014 The ICT Development Index,\u201d the International […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[2],"tags":[],"class_list":["post-86085","post","type-post","status-publish","format-standard","hentry","category-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/86085"}],"collection":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/comments?post=86085"}],"version-history":[{"count":0,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/86085\/revisions"}],"wp:attachment":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media?parent=86085"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/categories?post=86085"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/tags?post=86085"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Broadband Cake<\/h2>\n
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\n\u2014 Biewer, Astra Broadband Services<\/p>\n<\/blockquote>\nA Not-So-New Business Model<\/h2>\n
Wireless Versus Wireless<\/h2>\n