Total investment for broadband satellite networks will reach $28.8 billion by 2004, according to recent analysis performed by Pioneer Consulting. This level of investment reflects a predicted increase in confidence in the satellite industry among investors and a continued demand for global connectivity. The introduction of new Ka - band technology should be a catalyst for potential investors and customers in the broadband satellite sector. Applications such as direct access, multicasting and caching will also serve to fuel demand in the market for broadband satellite services.
The broadband satellite market is poised to usher in a new era in telecommunications. Whereas traditional satellite networks have been limited to specialized private VSAT networks, low-bandwidth services and DTH video, newly proposed broadband satellite systems promise to offer service comparable to current broadband terrestrial solutions.
The increasing worldwide demand for more bandwidth and Internet access has created an extremely lucrative market for telecommunications system operators and service providers.
A broadband satellite system in the development stages today will not be fully operational until 2002-2005. The global business subscriber base for broadband satellite services will increase from 30,000 businesses in 1999 to almost 7 million in 2008. Global residential access also shows the same trends; global residential subscribers will increase from close to 100,000 in 1999 to over 39 million in 2008.
Fixed Multimedia Satellite Services Fixed multimedia satellite services are just beginning to take hold on the world market. 1998 combined revenue of fixed and broadband multimedia satellite services reached close to $6.7 billion in 1998, a significant increase over the previous year. Mainly provided through a VSAT and a PC/set-top box, fixed multimedia applications mainly include Internet access, telephony, cable and video transmission, private business networks, telemedicine, teleeducation and video conferencing. The Internet has made its presence felt in the fixed satellite services market over the past three years as international operators such as PanAmSat, Intelsat and Loral Orion are providing capacity leases to carriers interconnecting foreign nations to the U.S. Internet backbone. Though these arrangements constitute a traditional leased transponder arrangement, the ability of satellites to support Internet access is setting the stage for future Ka-Band broadband satellites.
VSAT Networks Due to the rise of broadband applications, many VSAT companies have shifted their focus from traditional narrowband applications to extensive broadband networks utilizing 2-way VSAT technology. Satellites are poised to provide connectivity to the Internet market, particularly the international Internet market, where traffic flows at a severe imbalance. Today over 75% of Internet content resides in North America (this may be changing however with more Internet content being stored outside the U.S.). Broadband satellite systems, because of their bandwidth-on-demand capabilities, are well-suited to international Internet applications because they can provide capacity on a pay-as-you-use basis, rather than paying upfront for symmetric capacity as is the case with T1/E1 services.
As the design of broadband satellite systems progresses, the need for low-cost, high capacity terminals becomes apparent. Today, there are over 300,000 VSATs in place worldwide, and with the proliferation of broadband satellite systems, this number is predicted to skyrocket. VSATs are increasingly becoming PC-based, IP-based, and DVB compliant. Set-top boxes are still a viable option for access due to low pricing and wide availability of suppliers.
Another trend in the industry is the increasing demand for VSATs that offer both broadband multimedia (Internet access, video streams, etc.) and DTH video broadcasting.
LAN/WAN Interconnection Many proposed satellite systems such as Teledesic and Astrolink see corporate LAN/WAN applications as one of the most lucrative areas for operation. As corporations expand into regions of the world where the telecommunications infrastructure is inadequate for broadband applications, the need for high-speed reliable connectivity between the regional and central offices becomes evident. Satellites, due to their ability to offer global coverage, are poised to gain a foothold in this market.