Karim Michel Sabbagh, E-Space's managing director of Europe and Middle East. Credit: E-Space

SINGAPORE — Commercial satellite fleet operators on June 16 said that the possible entry of Google and Facebook into the satellite industry is an indication that existing operators are not sufficiently innovative in bringing broadband to those without it.

Addressing the Cable and Satellite Broadcasting Association of Asia (CASBAA) Satellite Industry Forum here, operators said satellite manufacturers needed to take launch service provider Space Exploration Technologies Corp. as an example of how to cut costs and reduce delivery times for telecommunications satellites.

Internet search giant Google and social-networking pioneer Facebook both have hired teams to look at satellite networks and high-altitude platforms to deliver broadband Internet to those now beyond its reach. It remains unclear whether either company will move to development of a satellite constellation once confronted with the capital expense involved.

But for the moment, Google and Facebook have succeeded in causing established fleet operators to question whether the industry is able to innovate to keep up with the broader information and communications technology sector.

“Facebook and Google seem to have concluded that we have left a vacuum out there,” said Karim Michel Sabbagh, chief executive of SES of Luxembourg, a large fleet operator. 

Addressing the conference, Sabbagh said the industry needs to embrace innovation in a way it has not in the past. Launch costs need to come down, and new launch services need to be offered to assure sufficient diversity of supply. 

Sabbagh said that since 2000, the cost of getting a given amount of bandwidth into orbit has dropped by some 66 percent. “For what we used to pay to get one transponder into orbit, now we’re getting three transponders,” he said.

That is not bad, but when compared with mobile telecommunications networks, it is less impressive. In 2000, it cost a mobile network operator about $2,000 to connect a given subscriber. That figure has since dropped to less than $100.

“Our economics are still working against us,” Sabbagh said. “Hence our need to keep our foot on the pedal with launchers and satellite manufacturers.”

SES was the first established fleet operator to launch with Hawthorne, California-based SpaceX’s Falcon 9 rocket, which is less costly than the commercial alternatives.

ABS of Bermuda is another satellite fleet operator that has contracted for launches with SpaceX. ABS Chief Executive Thomas Choi said his company’s decision to be one of the first to use all-electric propulsion on satellites is the kind of development that should be common if the satellite industry wants to survive.

Choi said satellite manufacturers should adopt part of the SpaceX model to build satellites more cost-effectively. He said he was frustrated that the ABS-2 satellite took nearly 40 months to build and launch. “We lost customers while waiting,” he said, adding that a straightforward bent-pipe satellite with no special features should be able to be manufactured in 18 months.

Daryl Mossman, vice president for marketing at satellite builder Space Systems/Loral of Palo Alto, California — which built ABS-2 — said SpaceX makes a single rocket product whose mission is then adapted to the satellite customers. Satellite builders usually do not have that option as customers refuse to harmonize their requirements in ways that would allow manufacturers to generate scale economies.

With their interest in satellite constellations for Internet delivery, Google and Facebook “already demonstrate that we have been unable to solve the problem,” Choi said. “We’re going to see these large companies implement very low-cost broadband solutions — whether it’s high-altitude platforms or small satellites.

“If we as an industry don’t react, they’re going to eat our lunch.”

William Wade, chief executive of Hong Kong-based AsiaSat, an established satellite fleet operator, said operators themselves need to rethink their business instead of focusing on what their rocket and satellite suppliers can do.

Wade said AsiaSat’s recent joint satellite construction decision with competitor Thaicom of Thailand is one way of reducing costs and providing more competitive services.

Steve Collar, chief executive of satellite broadband startup O3b Networks of Britain’s Channel Islands — whose founder and chief technology officer have since gone to Google to design a satellite constellation — said O3b is an example of the satellite industry testing new designs to compete.

O3b’s constellation in medium Earth orbit is designed to deliver broadband with low signal latency because of the lower orbit to telecommunications network operators. The first four O3b satellites are in orbit, and a second batch of four satellites is scheduled for launch in mid-July.

“We absolutely can compete today with terrestrial providers,” Collar said. “We’re competing with fiber, and we’re an alternative to fiber.”

Collar said the arrival of Google and Facebook into the satellite Internet business “presents some challenges” to companies like O3b but is generally good news.

“It is good to hear that some of the biggest companies in the world in terms of driving data traffic are thinking about satellites,” Collar said. “It is absolutely what this industry needs.”

Follow Peter on Twitter: @pbdes


Mobile Broadband Operators To Make another Run at Satellite Spectrum

Asian Satellite Operators Not in a Rush To Field Dedicated Broadband Satellites

Google To Buy SkyBox for $500 Million

Google-backed Global Broadband Venture Secures Spectrum for Satellite Network

Peter B. de Selding was the Paris Bureau Chief for SpaceNews.