VSAT and MSS Market Overview

1. VSAT and MSS Market Overview Abdelfattah ABUQAYYAS CoE/ARB Coordinator abuqayyas@itu.int ITU - BDT

2. Topics • Global Satellite Market - Overview • Mobile Satellite Systems (MSS) • Messaging • Voice • Broadband data • Satellite and Internet • VSAT Trends and Markets • Satellite Technology Trends and Challenges • Satellite Regulatory Issues

3. Global Satellite Communication • Commercial satellite communications are rapidly becoming a large and global business, increasing from 11 billion $ in 1992 to 20 Billion $ in 1996 and will reach 75 Billion $ in 2005 • The improvement covers all areas: Satellites, Services, Technology, Orbits, Spectrum, Mobility, Marketing, Service provision and many other aspects. • KEY DRIVERS – INTERNET • Current industry estimates project that there will be over 500 million worldwide Internet users by 2005. • Businesses will be spending over $100 billion on such services in 2005

4. Change in the Global Satellite Telecommunications market • Growth in overall demand for telecommunications driven by Internet • Fiber capacity will rise and costs will fall by several orders of magnitude Can operators survive? • Continuation of last mile problems for fiber • Satellite capacity expands through technological advances but much slower growth rate than fiber • Satellites may lose out in specific regional / application markets but will gain significantly in overall global revenues • Satellites will continue to offer instant infrastructure solutions - especially for broadcast applications and interactive services in regions with developing telecommunications infrastructure Work with other solutions - not against them

5. Mobile Satellite Services • MSS Services: • Messaging • Voice • Broadband data • Current MSS Market • 75%of the current market for MSS is data-only • Business to business sales • Relies on customer education, value- added Services

6. Mobile Satellite Systems for Messaging (Little LEOs). • Little LEOs use low Earth orbits to provide global data and messaging capabilities to a variety of markets through small, low-power transceivers. • The satellites operate at frequencies below 1 GHz to take advantage of favorable signal propagation and low cost transmission equipment. • Applications include cargo tracking, utility meter reading, monitoring of remote meteorological, geological or maritime instruments, paging, computer and personal messaging

7. Little LEO Market Segments • Messaging 56% • Electric meter reading 28% • Asset tracking 12% • SCADA 2% • Maritime and aero 2%

8. Mobile Satellite Systems for Voice ( GEO, MEO and Big LEO) • Before 1997: • Price of service ($ 5.50 to $10/ minute) • Price of terminal ($ 14,000 to $50,000) • Size of terminal (large and bulky) • Prices of service and terminals have been reduced: • Price of service ($1 to $2 per minute) • Price of terminal ($2000 to $3000) • Size of terminal - notebook size

9. MSS for Internet and Multimedia (Ka Satellite systems) • Ka-band operates in the range of 18 to 31 GHz • The Ka-band satellite systems are the wave of the future because they provide fast, high bandwidth, worldwide communication. • Will offer the same multimedia which is now available from the desktop computer, but in a hand-held portable unit. • LEO with Ka Satellite communication systems are a sure thing.

10. Future Broadband Satellite Systems • The LEO constellation is likely to be used by: • Teledesic • M-Star • SkyBridge • V-Band • The MEO and GEO constellation is going to be used by: • GESN - Combination of GEO & MEO • StarLynx - MEO • WEST MEO - Combination of GEO & MEO • Spaceway - Combination of GEO & MEO • Others • Celestri – LEO & GEO • Ellipso – High Elliptical

11. LEO, GEO Comparison

12. Mobile Satellite Services2000 - 2005 • What are the market prospects – how many customers? • What are revenue prospects for mobile satellite services? • How many operators can the market sustain? • What is the current status of MSS system implementation? • MSS Market trends: • Mobility. • Broadband. • Need for global availability. • Service direct to the user.

13. Role of Satellites in the Internet: • Delivering the content to the user “Pulling” • For long haul traffic, satellites are a particularly efficient means of delivering content globally. • “Pushing” internet content directly to the edge of the Internet, to ISPs close to the users. • Broadcast of the same content to multiple sites at the same time • Broadband internet access to the end user “Last mile” • particularly in geographic regions which are large and/or less densely populated • IP VSAT networks—advanced corporateNetworks

14. Role of Satellites in the Internet Delivery

15. BroadbandConnections (in millions)

16. BroadbandConnections (in millions)

17. Delivering the content to the user “Pulling” • Satellites already are playing an important role in carrying Internet traffic. • The asymmetric nature of this traffic: The lower data content inquiry can be sent via terrestrial facilities and the return higher-data rate content can be sent via satellite. • The satellite industry has ably demonstrated that satellite technology can operate smoothly with TCP/IP • Hybrid connections for hauling ISP traffic are often chosen by ISPs. • Satellite systems, in addition to transporting the Internet content on their own facilities, have been adding high-speed fiber connections and points-of-presence at network access points which allow customers to access the Internet backbone networks • Emerging markets may prefer satellite-only approach because of the unavailability of fiber. • Entities providing satellite ISP backhaul service include not only the satellite system operators, but teleport operators, telecommunications administrations and companies which use a variety of communications media.

18. “Pushing” internet content directly to the edge of the Internet • satellites have developed services called “multicasting and caching” • Take the internet content from the content provider, uploads this to the satellite(s) and broadcasts the content, and updates, to ISPs and their points of presence. • The ISPs have servers located in dispersed locations which store the content and make it available to the web user. • old way: • User types in web address, transmission is relayed to the server where the content resides, multiple back and forth transmissions occur between the user, the ISP and the content provider’s server, and the user can wait for the download, “The equivalent of having everyone fly to Hollywood to see the latest movie.” • New way: • User types in web address, transmission goes to ISP which checks for closest location of content from website (hopefully near the user), and content moves expeditiously from the nearby server to the user. “moving the content to the edge of the Web. Satellites are ideally suited to provide this service

19. Broadband internet access to the end user “Last mile” • This can be in the form of advanced VSAT networks aimed at corporate customers • With advanced IP modems and interfaces which allow organizations to use the satellite system for high-speed Internet access, data transmission, video and voice. • Increasingly, satellite VSAT networks will upgrade to higher functioning and more flexible IP networks. • The two-way broadband services for consumers are also being implemented, (DirecPC) • It is more likely that the two-way broadband services to end users will move forward more rapidly as they are integrated into DTH service offerings • Satellite networks will continue to have a role in provision of two-way broadband service to the end user.

20. Global Internet Traffic Growth

21. Remarks • Satellite isone of the most efficient and cost-effective means to broadcast to the Internet; Internet is perfect for satellite transmissions. • With satellite, consumers in areas without terrestrial broadband infrastructure can still be served, this solves a critical part of the broadband access equation--the last mile. • Bandwidth demand will always exceed bandwidth supply. Satellites can, and will, play an integral part in moving the Internet traffic to broadband users. • People today are used to the 'world wide wait, but that tolerance is dropping fast. • "Content distribution networks" is a new buzz term, and satellite can help these networks push content right to the edge, close to the end user. This solves the Internet backbone congestion problem .

22. VSAT Trends and Markets • Trends • Higher data rates • Application specific in developing world • Remote / thin route telephony • Consolidation of service providers • New Applications / Markets • ISP connections to Internet backbone • Broadband VSAT • DTH with integrated TV / web content

23. VSAT and Competitive Pressure • Higher capacity of fiber • Submarine and terrestrial • Increases by a factor of 1000+ • Wireless Access • G3 for mobility • Higher capacity local loop • xDSL (but limited penetration) • Cable modems (very limited penetration and problems with grade of service) • Doesn’t really address regions with developing telecommunications infrastructure

24. Conclusions • Fiber will continue to dominate the high-density trans-oceanic / intercontinental point-to-point market • Interconnection and interoperability will be a major issue • Satellite will continue to offer instant infrastructure to underserved areas • Demand for satellite services will increase - driven by demand for IP access and higher data rates

25. Satellite Technology Trends • Technological Developments. • On-board processing (OBP) • Beam switching and multi beam antennas • Inter-satellite links – RF and Optical • Ka-band • Higher aggregate data rates • Smaller terminals • The Future for Satellite Technology • Growth requires new frequency bands. • Problem of Propagation through rain and clouds, attenuation by foliage and by buildings needs solutions. • Low cost phased array antennas for mobiles are needed. • Optical Communications for inter-satellite links. • Protocols for Satellite Networks. BUT The future looks bright.

26. Current Trends in Satellite Communications • Bigger, heavier, GEO satellites with multiple roles. • More direct broadcast TV and Radio satellites. • Expansion into Ka, Q, V bands (20/30, 40/50 GHz). • Massive growth in data services fueled by Internet. • More mobile services. • Key Satellite Trends • DBS and Digital Radio • Mobile satellite service - GSOs, • Big and Little LEOs • Ku- band VSATs • Ka- band high data rate • GPS

27. Risk Factors and Challenges • External Drivers for Satellite Boom • Globalization of Communications. • Privatization and Competition. • Mobility Requirements. • Bandwidth / Data Rate Needs: The Internet. • Rapid Deployment. • Ubiquitous Coverage. • Wide Bandwidth (Ku, Ka and Above). • Challenges Still Remain • Launch problems. • In-orbit anomalies. • Licensing and interconnection. • Delivering the service and handsets to the market.

28. Future Needs and Market Trends • Drastic need for more MSS allocations -demand will exceed spectrum. • Need to use spectrum efficiently (e. g., sharing between NGSO and GSO systems). • Need to integrate use of satellites with terrestrial systems - broadband systems, and satellite component of advanced wireless communications systems. • Market trends • Mobility. • Broadband. • Need for global availability. • Service direct to the user. But MSS telephony sector unlikely to grow significantly

29. Policy and Regulatory issues • Policy issues • Liberalization and competition • Market access • Improved access • Confidentiality of information • Foreign investment • International regulatory mechanism • Regulatory issues • Licensing • Disaster relief • Regional transponder agreement • Mutual recognition • Import duties • Type approval • Spectrum

30. Satellite Regulation • The Challenge: “… universal access is now not so much an engineering or supply-side problem but rather a regulatory and policy challenge.” • Regulation is for promoting the competition • Licenses to offer telecommunications services should be granted on a technologically-neutral basis. Regulations Can Encourage - or Discourage - Access to Satellite Communications Solutions

31. Levels of Regulatory Obligations • Satellite Operator Level • International: ITU • National: Registration/License • Satellite Network Operator Level • Services License • Satellite Earth Station Level • Radio Frequency License • Space Segment • The provision of space segment should be governed by ITU intersystem co-ordination through the Radio Regulations • Because Earth Stations Have Already Undertaken Intersystem Co-ordination Through ITU Radio Regulations

32. The Role of ITU • GMPCS • GMPCS – Global Mobile Personal Communication Systems, which provide Transnational, Regional or Global coverage from a constellation of satellites accessible with small and easily transportable terminals. • Whether the GMPCS are geostationary or non geostationary, fixed or mobile, broadband or narrowband, global or regional, they are capable of providing telecommunication services directly to end users such as 2 way messaging, voice, fax, data and even broadband multimedia. • Role of the ITU During the first (WTPF) – 1996, five principles and issues related to the introduction of GMPCS systems have been adopted, one of them proposed a Memorandum of Understanding (MoU) to facilitate Arrangements for type approval, licensing, marking, provision of traffic data, and customs recommendations related to the free circulation of GMPCS terminals (GMPCS-MoU).

33. GMPCS MoU The Signatories will develop arrangements on the essential requirements necessary for the: • Type Approval of Terminals • Licensing of Terminals • Marking of Terminals • Customs Arrangements • Access to Traffic Data

34. POLICY AND REGULATORY FRAMEWORK • Trends in the telecommunications world. • New technologies • More liberalization • More competition • Search for socio-economic benefits • The Policy Environment. • Permit new services. • Open market • User benefits of quality, price, range of services • Socio-economic benefits • Decline in the Dominance of Government-backed Consortia, like Intelsat and Inmarsat. • Competition with private satellite operators and fiber optic cables. • Privatizations and Commercialization of Satellite Industry – Intelsat, Inmarsat.. OPEN SKIES IS AN IMPORTANT ISSUE!!!!

35. Position of Developing Countries • ITU has been providing policy advice for many years. • Many are modernizing their telecom policies & regulations. • High license fees, high import duties, high service charges. BUT they are starting to come down.

36. KEY DRIVERS FOR THE FUTURE The following would be key guideposts to the future: • Whether the global shift to fully competitive telecommunications markets continues. • Whether global trade agreements of the WTO enforced. • WTO continues to break down barriers • No more telecom monopolies by 2010? • Whether new technologies in optical communications, high power generation, on-board processing systems, antenna technologies and lower cost launch systems evolve. • Whether there is continuing global consolidation, merger and partnerships. • Whether INTELSAT, Inmarsat, and EUTELSAT are able to adapt to fully competitive markets.

37. VSAT and MSS Market Overview Thank You abdelfattah.abuqayyas@itu.int