PARIS — Satellite ground terminal manufacturer Gilat’s contract to provide the Russian government with Ka-band satellite technology for consumer broadband access could be the company’s biggest deal in the growing Ka-band satellite market, Gilat Chief Executive Amiram Levinberg said Nov. 16.
In an interview, Levinberg declined to specify the exact nature of the agreement with RTComm, the satellite-service arm of Rostelecom, Russia’s national telecommunications operator; and with NIIR FSUE, a technology institute at the Ministry for Telecommunications and Mass Communications.
Levinberg in particular declined to specify whether the technology transfer clause in the agreements, which he said is substantial, would end up with Gilat providing Ka-band satellite terminals in Russia, or merely licensing Gilat technology to Russian manufacturers.
The Russian government is planning to build three Ka-band satellites to serve up to 2 million Russian households that do not have broadband access. Russia’s biggest satellite fleet operator, Russian Satellite Communications Co. (RSCC), has ordered Ka-band capacity as part of its ongoing fleet expansion. It remains unclear whether RTComm will order its own satellites or order capacity from RSCC that may be under construction. Gilat said the Russian network should be in place between 2012 and 2014.
“The agreement includes required technology transfer for local manufacturing in Russia,” Levinberg said. “To what extent they will be using it remains to be seen. We could provide terminals to start, and then we might create a joint venture with them — this is still an open question. They have acquired the [technology] necessary to do the manufacturing.”
A group of Russian engineers are expected to receive Gilat training at the company’s Petah Tikva, Israel, production site, Levinberg said.
Gilat is one of a half-dozen major manufacturers of very small aperture terminal (VSAT) hardware that links users to satellites for two-way data transmission. The industry is growing into new markets, including maritime broadband applications, but the biggest near-term market appears to be to provide Ka-band terminals for large, high-throughput satellites.
In the United States, this market is dominated by ViaSat and Hughes. Both are vertically integrated, owning their own satellites and producing terminals to link with them, meaning the Ka-band market is all but out of Gilat’s reach.
In Europe, ViaSat and Hughes have aligned themselves with Eutelsat of Paris and Avanti of London, respectively, for those companies’ consumer satellite broadband projects.
But Gilat recently won a competition to be a nonexclusive supplier of ground gear for Luxembourg-based SES, whose Astra2Connect consumer broadband service is gradually moving from Ku-band — with terminals provided by Newtec of Belgium — to Ka-band, with Gilat and Newtec both selected as terminal providers.
Levinberg said Gilat’s new Ka-band VSAT gear will enable subscribers to install it themselves if they choose to do so — a selling point that Newtec has made for its Ku-band gear used up to now for Astra2Connect. But for Gilat, it remains unclear how many customers will actually choose to self-install their antennas and cabling, especially as the existing base of satellite television hardware distributors educates itself on installing two-way satellite dishes for broadband.
Depending on the production rates it can develop with SES and Russia, Gilat may be better positioned competitively against Hughes, ViaSat and others in the expected competitions for Ka-band satellite systems in Latin America, Australia and elsewhere.
Australia’s NBN has a budget and mandate to provide broadband links to all Australians. But the company’s initial plans to build two dedicated Ka-band satellites now appear to have been modified.
For now NBN has selected Gilat, along with Australia’s Optus telecommunications operator and Thaicom of Thailand’s IPStar Ku-band broadband system, to provide interim capacity for the NBN project until a firm decision is made to move to Ka-band satellites.
Gilat, Hughes and ViaSat — as well as U.S., European and Japanese satellite builders — are all planning bids for the NBN work should a Ka-band network materialize there. It is possible that Australia, like SES in Europe, will elect to place Ka-band hosted payloads on a conventional Ku-band telecommunications satellite instead of ordering dedicated satellites.
Levinberg said that whatever the final decision by NBN, Gilat expects its contract to provide interim capacity is likely to continue for three to five years.