Creating extended value for mobile service providers

by Staff Reporter | January 23rd, 2013

Daniel Enns, Senior Vice President Marketing and Business Development for Comtech EF Data

The satellite industry’s technology-backed value proposition makes it a primary medium for backhauling mobile cell phone traffic, says Daniel Enns, SVP Marketing & Business Development, Comtech, in conversation with SatellitePro ME.

“Telcos are looking at shorter cycles for an ROI on their CAPEX investment. Going forward, I see an opportunity in the next 12 to 24 months as mobile service providers attempt to monetise data services”

Going by a recent news report from Australia, broadband over satellite is enjoying a surge of support for reasons that were somewhat unexpected. Residents in some areas of rural Australia where fixed wireless technology is planned have given “strange” reasons to local councils to reject plans for the necessary towers. The reasons range from unfounded fears of radiation from the towers, to the said towers allegedly causing global warming.

The take-up for satellite capacity has surged to such an extent that demand for the interim service is already ahead of projections, and if the demand persists, there will be a gap between the capacity currently available and the 2015 launch of two satellites by Australia’s National Broadband Network (NBN), valued at USD 620 million.

Far removed from the relatively developed areas of rural Australia are 30 million people in the Northern territories of Pakistan that rely wholly on satellites for communication. Having worked with mobile satellite operators across Latin America, Africa and Asia, Daniel Enns, SVP Marketing & Business Development, Comtech, believes that satellite-based backhaul is not an option of last resort.

“It is ironic that not so long ago, all our international calls were carried via satellite before the onset of fibre. Currently, there are five-plus billion mobile cellular subscriptions worldwide and access to mobile networks is available to 90% of the world population. But satellite backhaul remains the most practical and cost-effective platform for low density areas such as sub-Saharan Africa, Asia and Latin America, that are the primary growth regions. Satellite is also a key enabler to delivering Universal Service Obligation (USO) requirements.

“ While the largest take-up of satellite capacity continues to be Direct-to-Home (DTH) services, the largest component after DTH is mobile backhaul.”

Insatiable demand for bandwidth

Nevertheless, the satellite solutions providers must demonstrate value to telcos and other mobile service operators, says Enns.

“Satellite is the most costly way of doing backhaul. Solutions providers will always prefer to opt for fibre or microwave. However, the satellite option is a must have because telcos have already reached out to the commercially feasible population groups and to expand, they would need to rely on satellite-based technologies.

“The demand for bandwidth appears to be insatiable, despite pressure on service charges and hardware costs. Overall, service revenues continue to grow driven by bandwidth consumption.

“Terrestrial infrastructure is lacking in many developing countries compounded by pricing challenges and dearth of satellite capacity especially across regions such as Latin America, Middle East, Asia-Pacific.”

Has the satellite industry responded with technologies that “extend” bandwidth and reduce expenses?

“The surge in demand has required the adoption of more bandwidth efficient ground equipment,” observes Enns. He adds, “Also in response to region-specific demands, satellite fleet operators continue to replace and realign with launches (announcing substantial pre-launch contracts) including next generation and High Throughput Satellite (HTS) platforms.”

Among the Satcom infrastructure approaches that “extend” bandwidth and reduce expenses, Enns includes Carrier-in- Carrier technology, Adaptive Coding and Modulation, WAN/RAN optimisation methods, Forward Error Correction (FEC) and modulation, among other solutions.

“Through technology, we have been able to provide up to 20 to 30% additional throughput. We have been able to more than double the number of calls that can be made through existing OPEX budgets.

“For instance, by utilising bandwidth optimisation technologies, Airtel has reduced network OPEX across 16 African countries through satellite links by as much as 50%. With attractive ARPU levels, satellite is profitable and goes beyond just fulfilling USOs.”

“Similarly with SpeedCast, a satellite telecommunications services provider, we had to offer a cellular backhaul solution for 40 plus sites on various islands across Indonesia. We deployed a combination of our CDM-625 satellite modems with DoubleTalk Carrier-in-Carrier and CX-U Series RAN optimisation that delivered significant bandwidth (OPEX) savings with no degradation in quality.”

Competing with DTH operators for satellite capacity

While licencing of services has always posed an ongoing challenge for satellite service providers when collaborating with  telcos and mobile service operators, there is a real issue with satellite capacity.

“DTH operators are willing to pay more for satellite capacity given the insatiable demand for video broadcasting. The pricing of capacity can be a challenge for some telcos though in many regions, the telcos are DTH operators as well.”

More capacity will definitely alleviate the situation, says Enns and he is particularly excited about the growing Ka-band  capacity over the Middle East.

“ Ka-band capacity is in response to the industry’s need for more capacity at lower costs. It is true that Ka-band is more susceptible to rain fade than C- and Ku-bands, though solutions such as DVB-S2 and ACM can overcome the challenge.”

The promise of O3b and Intelsat Epic

Alongwith Ka-band, Enns believes the next generation network combines the reach of satellite with the speed of fibre.

“The constellation of Medium Earth Orbit (MEO) satellites will virtually eliminate high latency with round-trip data transmission taking approximately 120 milliseconds. The O3b system is designed to support any traffic payload and traffic type with scalable solutions from 1 Mbps to 10 Gbps and seamless integration to existing network architecture. And delivering global high-throughput technology without sacrificing user control of service elements and hardware is Intelsat Epic with its innovative approach to satellite and network architecture utilising C-, Ku- and Ka-bands, wide beams, spot beams, and frequency reuse technology.”

Defending the value proposition

The everyday challenge Enns and his team face when dealing with mobile service providers and telcos is to be able to effectively defend the value proposition for the satellite option.

“This is not an emotional business. If you have an identifiable value, the telcos will adopt it,” affirms Enns.

“Moreover, telcos are looking at shorter cycles for an ROI on their CAPEX investment. Going forward, I see an opportunity in the next 12 to 24 months as mobile service providers attempt to monetise data services. This is the next chapter that is currently unfolding.

“Mobile Network Operators are determining how to monetise data services, by planning network expansions and scheduling new buildouts for developing regions. We believe that leveraging market-leading SCPC technologies will enable USD 250M+ in annual savings in the space segment.”

“We all know how to monetise one minute of talk time – but there is no viable revenue model for data transmission. With mining and other sectors booming across Africa, telcos such as MTN are looking towards leveraging existing infrastructure to reach out to enterprises and we see growth in this area.”

And there are apparently no limits to potential growth with companies such as Comtech and Hughes Network Systems, among others, demonstrating cost efficient and workable 3G and LTE solutions over satellite backhaul.

 

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