by Rachel Villain, Euroconsult

Forty years after its introduction as an operational technology, satellite communications have reached maturity — the replacement of aging geostationary satellites and LEO constellations drive the industry’s business cycle.

Incremental advances at the satellite and ground levels continue to result in new applications for individuals, businesses, and government organizations throughout the world. Currently, approximately 125 million satellite terminals are used around the world for a variety of communications and entertainment services.

Broadband SATCOM Everywhere
In 2008, the SATCOM industry appeared to have been largely spared the economic crisis, posting growth across the sector, from satellite manufacturers to ground equipment manufacturers and satellite operators. The combined 12 percent revenue growth achieved by the 40+ FSS and MSS operators in 2008 was partially driven by a low dollar relative to other industry trading currencies, e.g., the euro. Nevertheless, most industry players reached organic growth in local currency.

In 2008, three geostationary satellites were launched for mobile communications services (Thuraya 3, Inmarsat I-4 Americas and ICO-GEO1). Inmarsat’s 14 percent revenue growth in 2008 illustrates the success of its investments in mobile broadband communication solutions, enabled by a fourth generation (4G) of highly capable satellites and new L-band terminals available for use at sea, in the air, and on the ground. The ecosystem of application developers, terminal manufacturers and local service providers also benefit from growing data communications demand from mobile users such as military forces, media, oil & gas, as well as shipping and trading. During 2009, several commercial airliners and private aviation companies are expected to launch in-flight broadband access using Inmarsat bandwidth.

Mobile VSATs using Ku- and Ka-band satellite bandwidth also benefit from the demand for mobile broadband communications. Numerous new products (e.g., Viasat, SWE-DISH, Motosat, RaySat, ND Satcom) coming from developments for government users requiring communications-on-the-move (COTM) have been launched for the commercial market. In Europe, several long distance high speed trains now offer broadband access to travelers, with IP connectivity provided by satellite and Wi-Fi. Additional in-train services are being implemented by North American railway companies.

Fixed consumer broadband access is a new application for satellite technology, first launched in North America where approximately one million subscribers receive services from HughesNet, WildBlue and Telesat. The legacy VSAT business for private communications networks is more international, with almost one million terminals in use outside the U.S., mainly in Europe, China, Brazil, and India. Two multi-spot beam Ka-band satellites are under construction in Europe and North America to provide ever-more cost effective bandwidth to make satellite solutions competitive with terrestrial broadband networks.

SatTech For Low Rate Data Connectivity
At the other end of the market, lower data rate applications for asset tracking, M2M, and AIS by satellite continue to develop. Satellite technology is increasingly used as a gap filler for terrestrial networks, especially for applications driven by security and safety regulations, or by a higher productivity of infrastructures.

In 2008, Orbcomm launched six Quick Launch satellites equipped with automatic identification system (AIS) for Coast Guards and government agencies in charge of maritime security. (See Orbcomm table on previous page.) Canada and Norway, two countries with such concerns, are developing small satellites specifically for AIS.

Machine-to-machine (M2M) communications by satellite is a small market relative to the services provided by terrestrial wireless networks (GPRS and 3G), with approximately 500,000 active terminals. Nevertheless, a growing number of wireless communications service providers have endorsed this satellite solution to complement their offerings to commercial and government customers when they move into areas outside the reach of terrestrial networks. As is the case for telephony, dual mode terminals are becoming available, enabling ubiquitous cost-effective communications from satellite or terrestrial networks.

World Satellite Terminal Base For Entertainment + Communications Services

There have been a number of ups and downs in mobile entertainment by satellite. In the area of entertainment, digital radio broadcasting by satellite has shown more mixed results than digital TV broadcasting. In the U.S., the benefits of the merger of XM and Sirius Radio have been somewhat offset by the crisis affecting the car industry, which has limited subscription growth in this important market segment.

Seven years after launch, Sirius XM Radio has succeeded in attracting 20 million subscribers in North America, but has yet failed to reach profitability. Elsewhere in the world, the other digital radio service by satellite ended in late 2008 with the bankruptcy of WorldSpace.

The first ever mobile digital TV service by satellite was launched in Japan and Korea three years ago via a S-band satellite jointly owned by Japanese and Korean interests. In 2008, MBCo decided to terminate service in Japan due to poor subscriptions and TU Media service in Korea has had difficulties coping with competition from free terrestrial service.

In Europe, a Eutelsat satellite equipped with a S-band payload will be launched at the end of March for Solaris Mobile, a joint venture between Eutelsat and SES Astra. Solaris will be the first to test market acceptance for mobile satellite TV in Europe.

Satellite-based EO Evolves
Earth observation (EO) satellites used to be the privileged domain of governments. The democratization of satellite technology and the commercial data policy in the U.S. have lead other governments and private investors to enter the sector with more operational business objectives than simply scientific research.

Various forms of public-private partnerships have been developed, giving birth to more satellites with more diverse observation capabilities. In 2008, 18 civilian Earth observation satellites with different capabilities were launched around the world, eight of which were for three European multi-satellite constellations — Cosmo-Skymed, SAR-Lupe, and Rapid Eye. With more small satellite manufacturers, data sales, and geospatial companies increasingly incorporating satellite radar and optical imagery into their product portfolios, commercial Earth Observation is truly expanding at each level of the value chain.

With local and global capabilities, satellite technology has demonstrated its versatility to accommodate both commercial communications and geospatial information requirements competing with, and yet complementing, terrestrial solutions.