Towards the next billion subscribers

by Guest Columnist | February 28th, 2013

David Hartshorn, Secretary General of GVF and Moderator of the Telco Roundtable

David Hartshorn, Secretary General, Global VSAT Forum revisits a fundamental question: Why should telcos and satellite service providers work together?

“Each year, predictions are made about the end of satellite as fibre reaches new countries. Go back to any one of those countries and you will find more satellite, not less … When you have a level playing field and open availability of all connectivity tools, the math will decide what tool will be relevant”

Fundamentally, telcos need to respond to their customers with end-to-end turnkey connectivity solutions. Fibre will probably do the entire job in terms of point-to-point connectivity. But if there is point-to-multipoint connectivity, then you are starting to look at different tools. Either you have a standalone solution or you use a combination of solutions. The more point-to-multipoint the application is, the more likely the tool will be wireless or satellite or a combination of the two.

In addition, telcos are often called upon by their local governments to support communication services in rural areas as part of fulfilling the Universal Service Obligations (USO) and it is often not cost effective to use conventional tools in low density, economically-challenged areas. The good news is that the diversity of wireless and satellite-based tools right now are better for telcos than it has ever been before. And with some funding provided out of the USO funds, telcos have the opportunity not just to bite the bullet, but to build markets in areas that were previously unserved, working towards the day when even these low population density areas can be considered as markets, in every sense of the word. The statistics from the ITU and The World Bank, show a direct co-relation between GDP and economic growth as a result of access to broadband.

The world’s most developed markets have the highest demand for satellite services. Despite the US being the single largest source of demand for fibre optics in the world, the country also holds the record for having the single largest installed base of satellite services in the world. By far, there is more revenue generated for satellite-based  services across the USA, than in any other country in the world, despite the availability of wireless and fibre.

SatellitePro Telco Roundtable

  • Venue: Jumeirah Emirates Towers
  • Date: March 13, 2013
  • A two-hour sales-pitch free discussion on how telcos and Satellite Service Providers can work together.
  • Moderated by: David Hartshorn, Secretary General, GVF
  • Participation for telcos and mobile service providers is free of charge. Register at http://satelliteprome.com/telco-roundtable

Fibre is unbeatable on point-to-point service provision. Satellite is unbeatable when the application calls for point to multipoint. So if you drive around the USA today, on top of any petrol station, you will see a satellite terminal. If you look on top of any retail or fast food establishment you will see a satellite communications earth station. If you look at the most of the convenience stores that call for credit card authorisation and where there is a requirement for point-to- multipoint connectivity, you will find satellite earth stations.

Each year, predictions are made about the end of satellite as fibre reaches new countries. Go back to any one of those countries and you will find more satellite, not less. In the 1990s, in South America, there was no fibre and satellite was doing point-to-point connectivity. When fibre came into South America, they started ripping the satellite terminals off the roofs. Go back to South America today and it is one of the strongest regions for satellite-based connectivity. When you have a level playing field and open availability of all connectivity tools, the math will decide what tool will be relevant – satellite and fibre and wireless are comfortable in the same tool kit. The Middle East is not unique. In fact if anything is different – its drier climate makes the region even more suitable for the use of satellite connectivity.

Consumers were not part of the conversation even six years ago, but today for the first time, high frequency, very small aperture terminals at extremely low cost are being rolled out throughout the Middle East, America, Asia Pacific and sub-Saharan Africa, among other regions, for consumers.

Satellite has never been more relevant for telcos than it is today. In the USA right now, the use of satellite broadband of any kind has increased exponentially. In the developed world, over the past 15 years, if you look at the total number of VSATs installed in one year in 1997 – it was about 80,000 units installed globally in an entire year. But now just in the US, in one month, one company installs more than 30,000 units.

With Yahsat’s YahClick service, Eutelsat’s Tooway and solutions from Avanti, among others, more than a dozen new satellite offerings are in the pipeline. The level of competition and availability of service will increase in the short and medium terms.

Strategic liberalisation is the need of the hour. As a popular saying goes: Monopolies are terrible, unless they are yours. If you are monopoly and you are not challenged and constantly pushing the envelope, you are not going to be providing faster, better and cheaper services that are enjoyed by customers in deregulated markets. Here is another variable, if you are a monopoly service provider and if the customers are frustrated by lack of innovation in your portfolio, that fact will accelerate the pace of liberalisation in your market.

There has been innovation in the Arab region. I expect it to be at an increasing rate because they have to. All the ground rules have been turned upside down and IT-based services are at the heart of that. I have been watching this happening over 15 years. It started with VOIP. While authorities tried to make it illegal, it was driven into the black market and that undermined the revenue of the telco.

Fortunately now, telcos are addressing the new world realities. They have started with regulatory reform. Strategic liberalisation is being undertaken in large parts of the Middle East. Iraq, for instance, has adopted an enlightened licencing approach. There is intent and demand that is driving this intent will only increase and that is the thing about broadband and access generally. Once you introduce broadband , it drives demand for more connectivity. There is never enough and this factor will drive the pace of reform.

 

 

 

 

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