Serious players in the Ka-band market are now undertaking detailed market research into the likely demand for services. However, industry players have indicated that there is no single killer application apart from high speed Internet access. Instead there is likely to be a series of niche markets ranging from ATM based multimedia for businesses and personal use, videoconferencing and video telephony, data broadcasting, voice for remote rural areas, tele-medicine, tele-education, SCADA, local television, a variety of applications in the mobile environment, satellite data relay services, news on demand, inter-connection of satellite and terrestrial PCS networks and satellite news gathering.
These satellite-based systems meet an important need for bandwidth provided at costs and with convenience that competing technologies cannot deliver. Fiber optic cables are useful as backbones for nationwide and international telecommunications networks – but their high costs and inflexible routes seriously limit them. In addition, the terrain can prohibit the installation of wire and they are most efficient for point-to-point communications; not for broadcast applications to multiple sites. Fiber optic cables cost $200,000 per mile to install, and entire networks can run into the billions. One project that will add two cables between Japan and the U.S. West Coast will cost a projected $1 billion. Another more ambitious project to link 75 countries and territories will run about $10 billion. At these costs, fiber-optic cable service is too expensive for all but the largest businesses and institutions. It will require far lower costs to economically connect medium and small businesses, even large businesses with far-flung operations, and, of course, consumers. This is what is called the "last-mile" problem – how to provide affordable connections to consumers and most business sites.
With U.S. businesses and consumers clamoring for affordable bandwidth, that presents satellite companies with tremendous opportunities to grow. Satellites offer great potential overseas in developed countries now relying on expensive, inflexible land-wired networks – and even greater potential in developing nations where little wire exists. Fully wiring developing countries would take many too years – and is simply unaffordable. Satellite-based services are uniquely suited to provide instant, affordable infrastructure that allows developing nations to leapfrog into full connectivity with the global economy.
The mulitcast capabiltiy of VSATs make them ideal for corporate intranets where, unlike the Internet, common data and information must be sent to many remote locations simultaneously and where security is an important concern.
VSATs are also entering into the sub $1,000 range. This means that the Ka-band environment can offer sophisticated next generation VSAT type services including what the Japanese have called Home-use VSATs. The one area that has been over-hyped in the Ka-band environment is the possibility of combining service with digital Ku-band DBS TV. In this scenario, a consumer could have a single dish that would provide both conventional TV and a plethora of two-way services, including, incidentally, voice based on distance insensitive tariffs.
This is unlikely to be a significant market because digital DBS is a niche market that only marginally overlaps with the likely market at consumer level for two way services. Bandwidth limitations for Ka-band preclude its use for mass-market video on demand. Provision of local TV through Ka-band to the DBS environment is likely to be viable only in the specific circumstances of the US marketplace and will only be viable if the DBS operators go into head on war with the cable operators.