HTS defining factor in driving VSAT sector’s competitive reorganization

Successive debates that enlivened day one of the main conference at VSAT Global (London) focused on how HTS (high-throughput satellite) technology is precipitating change on several fronts for both satellite operators and VSAT service providers.

Among the broad range of topics addressed at the industry-leading event, speakers explained how HTS’s promise to dramatically boost satellite bandwidth delivery now has to be understood within the context of the wider repercussions its deployment will cause.

The capacity boosts will, of course, enable satellite operators and their VSAT partners to better meet the increasing demand for bandwidth being driven by both the consumer and enterprise sectors – most specifically by the rise in mobile data consumption.

HTS is opening up a mix of opportunities, making VSAT providers well-placed to work with mobile network operators (MNOs), for instance, to provide mobile backhaul capacity, or to partner with them to extend broadband coverage into territorial regions where installation of fixed fibre network links cannot be cost-justified.

However, the satellite industry also needs to be mindful of the dilemma that MNOs increasingly now face: mobile data demand is driving the need for additional network infrastructure investment from operators who are not themselves deriving much revenue benefit from the content surge.

This situation may develop further as VSAT operators investigate opportunities to transition their business models away from being pure-play service providers toward a spot-beam enabled model that includes bundling value-added services in addition to core communications provisioning.

Consumer applications will probably not provide the key ROI assurances here; but globally, if significant demand for non-consumer services exists in landlocked regions where conventional fibre broadband installation is impracticable, opportunities certainly exist for value-added VSAT providers to extend their business models, most speakers agreed.

However, as was noted by Simon Gray, VP of Humanitarian Affairs at Eutelsat, re-positioning as an international value-added VSAT services provider calls for some fundamental realignment of business models, especially when it comes to understanding the complexities and nuances of operating across multiple national cultures.

For VSAT players keen on such self-reinvention, however, concomitant market developments must first come forth to aid their mission. The unit cost of end-user terminal price points, for instance, must fall to a level that is not only affordable by Western standards, but also for early adopters in developing countries. As some speakers claimed that terminals are already being retailed on minimal margins, this presents a formidable challenge for the industry, unless some kind of subsidised environment can be introduced.

These and other changes are highlighting the changing nature of the competitive landscape for satellite operators and VSAT service providers. Consensus of opinion expressed at VSAT Global was that satellite operators with ambitions to establish more direct corporate customer-facing operations – and thereby effectively compete with their VSAT partners for enterprise end-user business – risk underestimating the demands of such a course, and will find the new demands of customer relationship management taxing.

Satellite operators will also lack the speed to market and agility needed service the needs of emerging demand in markets where VSAT is the only feasible wireless communications solution. This is the case for established VSAT-savvy verticals, such as maritime – speakers such as Harris Caprock CTO Rolf Berge, SES VP sales Data & Mobility Europe Simon Gatty Saunt, and Intelsat VP Americas Mark Rasmussen, each explained how burgeoning digitalisation of cruise ships and container shipping are turning a range of vessels into significant centres of VSAT demand – and to other transport sectors such as passenger aeronautical (inflight broadband access) and connected autonomous cars.

Day one of the main conference concluded with an interactive panel discussion based on delegate poll on ‘which tech innovation will have the biggest impact on the VSAT Industry’. Antenna Innovations followed by LEO topped the poll.

Antenna improvements have the potential to open up new market opportunities, predicted Sandeep Kumar, Head of Satellite Sales, Sales Specialist, at Telstra.

Liquid Telecom’s Group Managing Executive – Satellite & VSAT Scott Mumford, agreed: the availability of antennas with gigabit connectivity and low latency would be a game-changer to opening-up the consumer and enterprise markets for satellite broadband, but even then price-point-per-terminal could still prove a challenge to uptake; but every incremental improvement in this direction is a step toward some seismic VSAT market shifts which will redefine the industry in the years leading up to 2020.

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