Hybrid Satellite, Terrestrial Networks Increasingly Important, Say Panelists

Enterprise satellite communications are becoming more intertwined with terrestrial services, said Spacenet CEO Andreas Georgiou. “As alternative technology companies provide more competitive technologies for the enterprise world” the satellite-based market “has to contract,” he said on a panel at Satcon in New York. Very small aperture terminal network deployment has fallen as a result and Spacenet has started combining services, he said. The company uses hybrid networks to accommodate the terrestrial and satellite needs for customers.

The satellite industry is following industry trends toward increased interest in broadband services, said Arnold Friedman, Space Systems/Loral’s senior vice president of market and sales. That interest means much larger satellites, he said. Satellite size for satellite operators also has increased in recent years because prices per transponder are about the same for a medium-sized satellite or for a large one, he said. Although there has been some consolidation in the market, new entrants are relatively frequent, he said. Mobile is another area where satellite companies are innovating, said Ken Carrol, EchoStar chief operating officer. The company is also using terrestrial services to compliment its satellite services, he said.

Investor confidence in the satellite market remains high given its proven resiliency, said analyst Omar Jaffrey of UBS, noting that past recessions have only created a small dip in the market’s overall strength. The market has shown investors remain largely safe, he said. When Protostar went through bankruptcy, selling its remaining assets including satellites, investors regained a significant amount of their investment. Raising funds has gotten easier as well, said Jaffrey said.

While other satellite operators are looking to emerging markets to boost revenue, Telesat is satisfied with its role as a largely North American provider, said Paul Bush, vice president of North American sales. It will continue to work on and invest in its North American direct-to-home offerings, he said. Telesat is expecting increased interest in specialized communications needs, he said. In the past, operators would design the most generic satellites to make them available for most services, but now there is a growing market for accommodating the most specific needs, like military spectrum usage, Bush said.

The growth of 3D TV may not be the boon to satellite capacity needs that some have predicted, Intelsat CEO Dave McGlade told a separate session. Bandwidth needs for the 3D industry will depend on the technology used, he said. If most of the 3D programming is “frame compatible,” capacity needs will increase only slightly, he said. Future growth will likely come on the backs of emerging economies, he said. The U.S. market isn’t nearly as “attractive” as it was a few years ago, he said.