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The Sky s the Limit: A Case Study of the First Truly IP Broadband Satellite Solution

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The Sky s the Limit: A Case Study of the First Truly IP Broadband Satellite Solution

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    1. The Sky’s the Limit: A Case Study of the First Truly IP Broadband Satellite Solution Steve Dashiell, eConomy Specialist Presented at the United Nations Economic and Social Commission for Asia Pacific Space Technology Apllications Section March 24, 2002

    2. Part I: The Multi-Media and Broadband Phenomenon

    3. Broadband Internet What is Broadband? “When I say broadband, of course, I mean, having a speed of access to the Internet, so that something like video and audio comes to your machine at very high quality, and you don't think twice about updating your software or sharing even a large file or database by doing that across the Internet.” Bill Gates Microsoft CEO Summit Redmond, Wash., May 24, 2000

    4. The Broadband Phenomenon The broadband market is the next mega trend in the telecom/Internet industry, after mobile phones in the 80s and www in the 90s It is the key infrastructure & enabling factor for the Internet Revolution & the New Economy Broadband will eventually be common & ubiquitous, reaching most offices & homes just like telephone & fax 120 million users, 30%+ penetration of all Internet, and US$150 billion in revenue by 2010 for the Asia-Pacific region alone Able to alleviate the bottleneck at the critical “Last Mile” portion - the most needed & expensive infrastructure build-out

    5. Internet Subscriber Forecast for Asia

    6. Broadband Penetration Forecast for Asia

    7. Broadband/Internet Forecast by Country in Asia

    8. Satellite Segment Forecast for the Broadband Communications Market

    9. Part II: Key Broadband Applications, Services & Markets

    10. Defining Broadband Access Service As opposed to leased line and dial up access services, broadband access is defined by its shared bandwidth capabilities. Broadband technology can use a single medium to carry several channels at once. In contrast, baseband transmission allows only one signal at a time (Webopedia, 2001). Although the Internet is a point-to-point information provider, broadband satellite technology is capable of increasing efficiency even further by using a point-to-multipoint transmission. Such a more efficient and powerful system enables users to enjoy: “always-on” high speed Internet access (128/256/384kbps burst-able to 2mbps) converging higher-end multimedia applications and content high bandwidth broadcasting of streaming audio & video at a price that is only about twice that of dialup (US$30-$60/month) for the average user

    11. Broadband = Broad Market Broadband Access Service is a very comprehensive and flexible PLATFORM, making it ideal for targeting the mass market: Corporate / Large Businesses ROBO (Regional Office, Branch Office) SME (Small & Medium Size Enterprises) Private/Special Purpose/Vertical Applications Multiple Unit Buildings (Apartment/Condominium, Hotel, Office Building) Mass Public State Services (e-Government and IO’s) SOHO (Small Office, Home Office) Households/Residential Consumers

    12. Broadband Applications for Consumers & Corporations Net Surfing, Download & Email, Audio mail, Video mail Online 3D Games & Graphics, Digital Photo Album Video Conference, Telecommuting Remote LAN Access, VPN Home Shopping/Stock Trading Remote Medical/Education Telephony/VOIP Audio On-Demand/Audio Streaming Video On-Demand/Video Streaming Digital Photography/Graphics Broadcast Video Content & Software Distribution, Application Rental, etc. E-commerce, e-Procurement, Supply Chain Management, Exchange, Virtual Market Place, etc. E-Government

    13. Part III: Broadband Technologies

    14. Key Broadband Technologies There are 4 key broadband technologies, with each having close economic as well as technical strengths & tradeoffs Mainstream: ADSL & Cable - economically build on existing networks for incumbents; 75% share of all of the broadband market Complementary: BWA & Satellite - fast & flexible for building out new networks for new competitive operators; 25% share of market

    15. Advantages of Satellite-Based Broadband Services Large Service Coverage & Flexible Locations Pocket dispersed users in a large geographical area Fast & flexible service deployment Bypasses terrestrial congestion & multiple link connections Bandwidth Efficiency Broadcast, multicast & content distribution for one-to-many distribution Compliments the Internet’s asymmetrical and bursty nature Efficiently shares bandwidth among a large user base Multiple Network Roles Facilitates the Last-Mile (direct to users) and Transport Network (Trunking / Backbone or Content Distribution Platform) at the same time Able to serve Multicasting & Unicasting at the same time Business Model Flexibility Broadband Internet Access Services and Traditional Satellite Communications services Integrates with other terrestrial Last Mile technologies & Data Centers Less licensing issues

    16. Major Broadband Technologies Comparison - Service Basis (for Users)

    17. Major Broadband Technologies Comparison - Business Basis (for Operators)

    18. Broadband Geo-Market Share

    19. The iPSTAR Advantage: Unique and Unparalleled Technologies Space Segment Multiple Cellular Spot Beams for more bandwidth from frequency reuse Dynamic Power Management to adjust on-board power for each beam to maximize bandwidth efficiency Ground Segment Dynamic Link Allocation to adjust modulation and coding for each user to maximize bandwidth efficiency New Coding and Modulation: up to 3.5 bps per Hz for more bandwidth, reduced power requirement (small antenna size, power & hardware cost) & higher availability New Air Interface & Network Management System: enables dynamic management and optimization for Broadband Internet

    20. iPSTAR Space Segment Orbital Slot: 120oE Hybrid Ku and Ka-band 35+ Gbps (3 million+ users) 90 Spot beams for All Asia-Pacific Coverage 14 Gateways Contruction Start: August 2000 Target Launch: 2003 Model: Loral FS-1300 SX (USA) Life Time: 12 years

    21. iPSTAR Ground System

    22. iPSTAR Terminal PCI-IDU Components

    23. iPSTAR Home Terminal

    24. Part IV: Satellite’s Role in the New Economy and the iPSTAR Solution

    25. Trends in Communications Technology Economy of Scale - wireline Economy of Speed - wireless/satellite Wireless / Satellite becomes the solution for: incumbent operators able to fill the void of markets not yet served new operators entering the market Trend - satellites can play an important role in the broadband revolution & phenomenon A satellite solution is a natural fit for an economy of speed: convenient deployment but lacks the scale & correct cost structure iPSTAR intends to reverse this scale and cost structure deficit while retaining the advantages of a satellite-based solution

    26. iPSTAR Broadband Satellite Solution Shin Satellite initiated the iPSTAR broadband satellite project in 1997 to solve 2 key issues pertaining to satellite broadband service: Economics: the cost of bandwidth & user terminal Bandwidth: iPSTAR US$1,000 vs. typical US$10,000 (Mbps/month) Terminal: iPSTAR US$1,000 vs. typical US$5,000 (per/terminal) Bandwidth Capacity iPSTAR: 40 Gbps vs. typical 1Gbps (/Satellite) iPSTAR enables satellite-based broadband to serve a large mass of users competitively with fixed terrestrial broadband services, while enjoying the advantages of a satellite

    27. iPSTAR’s Technology Goals Satellite has no technology breakthrough for many years, especially for broadband Internet Existing Terminal >$5000, Bandwidth >$5000/Mbps/Month Existing Satellite Platform 1-2 Gbps/Satellite Not designed for Internet iPSTAR Goals Competitive Cost & Scale to Terrestrial Broadband Services 2-10X Better Cost & Scale over other satellite broadband solutions Price point more affordable & potentially much larger user base iPSTAR Key economic & technical improvement Lowest Cost Terminal & Gateway Lowest Cost Bandwidth Highest Speed Per Small Antenna Largest Satellite Bandwidth Platform

    28. iPSTAR’s Economic Goals Lowest Cost Terminal & Gateway <$1000 cost per User Terminal, or <$200 per User (share Terminal & Gateway), & further decreasing over years to expand user base <$15,000 per Mbps or $75/user for Gateway Capex, to be competitive to ADSL & Cable Modem Lowest Cost Bandwidth <$1500/Mbps/Month raw 2way bandwidth <$15/Month/User cost, included IP connection & content, to provide a $30-60 service fee, to be competitive to ADSL & Cable Modem Highest Speed Per Small Antenna 75-120 cm. for 8-11 Mbps Forward, 2-4 Mbps Return Largest Satellite Bandwidth Platform thus economy of scale for a powerful platform to serve massive user base A 20-40 Gbps satellite (4-8+ million users)

    29. Targeted iPSTAR Broadband Users in 2008

    30. Part V: iPSTAR’s Business Model

    31. The iPSTAR Edge iPSTAR is the only one with a progressive and complete strategy: Get an edge “NOW” with the early deployment or soft-launch using the iPSTAR Ground System (Ground Equipment Strategy -- FG) Plan for “FUTURE” growth with the full-launch of the new iPSTAR-1 Satellite (Satellite Platform Strategy -- SG) Most other “NOW” ground equipment strategies don’t have any “FUTURE” satellite platform strategies, or vice versa iPSTAR offers the best PRICE and PERFORMANCE (best COST STRUCTURE) for both Strategies lowest cost bandwidth & terminal highest bandwidth per terminal & per platform scale

    32. iPSTAR Soft-Launch Program Sign NSO/NSP Early Lease iPSTAR-1 Bandwidth at special early/bulk discount Acquire & deploy Terminal & Gateway Use any Ku-band satellite transponders Thailand, Malaysia & India - use Thaicom-3 Deploy Services Mass Broadband, IP Backbone & VSAT services Optionally Migrate to iPSTAR-1 or parallel expansion with iPSTAR-1 in 2003

    33. Business Structure

    34. iPSTAR Commercial & Business Structure iPSTAR Bandwidth Commercial Options IRU (buy out full life, one time payment for large cash discount) Early Lease (life time contract for 2000-2001) Pre-launch Lease (life time contract 2002-2003) Normal Lease (3-5 years): $19000 /Mbps/Year (inc. Gateway services) National Service Operator (NSO) Roles:- Single NSO for a country Acquire full coverage, full bandwidth of a country early (IRU or Early) Build & Operate National Gateway & Platform Resell Bandwidth & Terminal to NSP, SP, end users National Service Provider (NSP) Roles:- Multiple NSPs for a country Acquire full coverage, partial bandwidth of a country early, 500-1000Mbps Use National Gateway Service Provider (SP) Roles Acquire any bandwidth any time (Pre-launch, Resell) Use National Gateway & Platform Provide services to end users

    35. Potential iPSTAR Customers/Partners Wholesale Level: NSO/NSP Telecom Operator (Telco) Satellite Operator Datacom Operator Backbone, Trunking Provider Telephone Operator Resell Level: SP Internet Business Players Internet Service Provider (ISP) Internet Access Provider (IAP) Online Service Provider Vertical Applications Service Provider Content Provider (ICP) Application Service Provider (ASP) Commerce Service Provider (CSP) VSAT Operator

    36. iPSTAR Investment Thesis for NSO/NSP Economically Most Competitive Satellite Broadband Integrated Business Structure (NSO) for a country - limited & reduce competition Early / IRU - much lower cost, long term competitive to others broadband technology Standalone Service - competitive entry Portfolio Service - fill void, fast deploy Total demand much bigger, iPSTAR less than 5-20% Soft-Launch to allow early service startup and ramp-up volume production Additional revenue from Value Added Services

    37. IPSTAR Business Model

    38. iPSTAR Applications Platform iPSTAR as the application platform for Broadband Internet (Downstream or B2C) Basic Access Services for High speed Internet Value Added Services for Multimedia, VOD, VPN, etc Direct to User or integrating with other last mile solutions (DSL, Cable, Wireless, MDU, MTU) Vertical Applications packaged with Data Center (Upstream or B2B) Internet Content Provider (ICP)/Content Distribution Application Service Provider (ASP) Commerce Service Provider (CSP) I.e. e-commerce Corporate Intranet, Extranet, Private Network VSAT Internet Backbone (First Mile) Mobile Trunking for 2.5G & 3G Transactional Network

    39. iPSTAR Broadband Access Product Portfolio Downstream: Definition: IP Access as a Last Mile connection to end-user A. iPSTAR Premium - Big Corporate Dedicated Leased Line Fixed Data Rate 256kbps - 2Mbps B. iPSTAR Business - ROBO, SME Shared Broadband IP Access Service Forward Speed: 512/1544-2048 kbps (Average/ Commercial Max Rate) Return: 772/2048 kbps (Average/Max Commercial Rate) Sharing Factor: 20 users per Mbps (on Forward Link) C. iPSTAR Home - Consumer & SOHO Shared Broadband IP Access Service Forward Speed: 384/1544-2048 kbps (Average/Max Commercial Rate) Return: 256/2048 kbps (Average/Max Commercial Rate) Sharing Factor: 200 users per Mbps (on Forward Link)

    40. Market Segmentation & iPSTAR Target Markets

    41. iPSTAR Broadband Access Product Portfolio (Cont’) Upstream Definition: IP Access as a First Mile or Second Mile provided to Service Provider iPSTAR Pro1,2,3 - Vertical Application: Internet Content Provider (ICP)/ Application Service Provider (ASP)/ Commerce Service Provider (CSP)/ Corporate Intranet For Corporate WEB Server, Content Distribution, Application Server or E-Commerce Server Shared up to 2 Mbps connect to/from the Internet Cloud Backbone 1 - Internet Service Provider (ISP) For Second mile from ISP HQ connect to ISP’s POP Dedicated IP Bandwidth 2-45 Mbps with Single or Multi drop Backbone 2 - Internet Access Provider (IAP) For First mile + Second mile connect from Internet Cloud to ISP’s POP Dedicated IP Backbone (45-155 Mbps) Multi Drop

    42. Market Segmentation & iPSTAR Target Markets

    43. Market Segmentation & iPSTAR Target Markets

    44. iPSTAR Progress & Future 2002 More NSOs & deploy iPSTAR Soft-Launch Broadband/VSAT Services in more countries (Japan, Australia, Taiwan, Korea) Finalize strategic & financial partners Further improve terminal & gateway - more volume, new design, Integration & more functions Build iPSTAR Second Generation Gateways & Terminals 2003 Launch iPSTAR-1 Satellite & Full-Launch in All Asia 2004-5 Plan for Europe & America Expansion, and add more bandwidth with new iPSTAR satellites further

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