While the current satellite industry has many positives, we are also experiencing a time of volatility, uncertainty, complexity and ambiguity. The increasing number of High Throughput Satellite (HTS) platforms being launched by operators is creating overlaps in times and geography, while Low Earth Orbit (LEO) are beginning to emerge at the forefront of operators’ plans, each likely to require billions of dollars of investment.
Consequently, we are no longer in the same situation as in the past, where successful launches of satellites were a foregone conclusion. Instead, we are beginning to see operators competing within the same footprint, creating overcapacity, driving profits down and squeezing profit margins.
Identifying the Truths
In this increasingly complex environment, the key to determining a vision is finding islands of truth. Even in the most complex and uncertain of environments, there are certain things that can be relied upon which become key cornerstones of strategy.
One of these truths is end-users’ demand for data. The smart phone revolution has brought excessive demands for data consumption in locations that previously would have been unable to offer connectivity. The type of data consumed is also evolving, with the demand for video now surpassing the need for basic voice.
The consumption of data in various locations leads us to our second truth. The availability of data everywhere is fast becoming a reality, with boats, airplanes and trains becoming increasingly connected. One of the current hot topics of the industry is that of connected cars and satellite’s potential role within that.
A final truth that can be relied upon is that satellite will remain a long tail of any connectivity graph. Telecoms is dominated by terrestrial connectivity through cable, fiber for the home and Wi-Fi and LTE for the streets. Satellite shouldn’t be viewed as a competitor for the mass market, instead it should be perceived as a more isolated type of connectivity that performs a different role, namely in remote rural areas, on oil rigs, planes and other vehicles.
The 5G Question
The dawn of 5G technology is certainly an area where the industry may need a boost from satellite, proving the window of opportunity for the industry is constantly changing. 5G’s promise of ubiquitous connectivity can be achieved within dense fiber areas through cabling, antennas and small cells but once you are out of the city, you are missing a link. In this instance, satellite can be used to complete the loop and maintain connectivity and if the LEO constellations over the next few years are successful, they will lower the cost of capacity and create greater opportunities for satellite.
Innovation in Ground Segment
It is important to remember that innovation in space must be matched on the ground. The industry will never realize the full potential of rapidly developing HTS and LEO technologies if the ground segment technology does not keep up. Almost all these new innovations are disruptive, so this must be reflected on the ground if the premium service they enable are to be delivered.
Put more simply, this is a case of synergy. For example, with HTS there are gateways and feed beams connecting multiple satellites, meaning ground segment technology needs to match the density of the technology and be scalable enough to handle 50 or 60 beams. With many different technologies within the market, operators and service providers need the ground segment technology to have synergy to ensure it isn’t the weak link in the chain.
Reacting to Innovation
The colossal shift in customer behaviors within the last ten years has led to these changes within the industry.
In previous years, it had always been clear what needed to be done to be successful and this would continue for many years. Now, while optimizing costs and having the experience is still vital, the current environment means taking the right decisions in situations that have not been experienced before.
The uncertainty and volatility can create chaos, but the identification of these islands of truth create a sense of order in an unstable environment and it is on this border between chaos and order that innovation can be created.
This article was published first in SatMagazine's March 2017 issue.
This article was also released in our latest newsletter "Newtec NEWS".
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