PARIS — Satellite fleet operator Eutelsat on May 31 began commercial broadband service with its Ka-Sat satellite and said it is sticking to its forecast that the spacecraft, which cost 350 million euros ($490 million), will generate 100 million euros in fresh revenue per year within three years.

Paris-based Eutelsat, which has been planning Ka-Sat since 2007, expects Ka-Sat will reach profitability by the three-year mark with around 300,000 subscribers, although depending on the mix of professional and consumer users, that milestone may come earlier or later. Counting just consumers, Ka-Sat can accommodate up to 1 million subscribers, according to Eutelsat estimates.

Built by Astrium Satellites and launched in December, Ka-Sat operates at 9 degrees east longitude. With a throughput of about 70 gigabits per second, it is the first of what is expected to be a series of Ka-band high-throughput satellites now in development or being planned in the Unites States, Europe and Asia.

Eutelsat and its broadband subsidiary, Skylogic of Turin, Italy, have hired ViaSat of Carlsbad, Calif., to provide much of the Ka-Sat ground infrastructure, including Surfbeam 2 consumer terminals.

Arduino Patacchini, president of Skylogic, said some 4,000 Surfbeam 2 terminals have arrived in Europe at a storage facility in Rotterdam, with 40,000 more expected there by July. In a May 31 interview, he said Eutelsat will ensure that the supply of consumer terminals at the Rotterdam, Netherlands, site remains sufficient to avoid shortages.

When Eutelsat first began its Ka-Sat project, its optimistic view of consumer broadband — the company believes Europe can replicate the success that satellite broadband has seen in North America — was not shared by its principal European competitor, SES of Luxembourg.

That was then. SES has since decided to replace several of its core European television broadcasting satellites with spacecraft that have Ka-band payloads for broadband service in addition to the standard Ku-band capacity for television.

But while it has appeared to lag behind Eutelsat in its investment, SES now counts more consumer broadband subscribers than Eutelsat. SES’s Astra2Connect service, which uses spare capacity on SES Ku-band satellites, recently passed the 80,000 subscriber mark, SES said.

Most of these Astra2Connect subscribers, using an SES satellite at 23.5 degrees east, get nowhere near the bandwidth that Eutelsat is offering from Ka-Sat — up to 4 megabits per second uplink and 10 megabits per second downlink.

To avoid being overrun by Ka-Sat while waiting for its own new satellites to launch between 2012 and 2014, SES on May 24 announced it is increasing the download speed for Astra2Connect to 6 megabits per second by providing additional Ku-band capacity from a second orbital position, 28.2 degrees east.

SES said that all new consumer gear sold for Astra2Connect will be Ka-band compatible, permitting today’s subscribers to migrate to the new, higher-throughput Ka-band satellites when they arrive. With the Ka-band capacity, SES will increase its bandwidth offer to up to 10 megabits per second on the downlink, SES said.

Patacchini said Eutelsat’s interim Tooway consumer broadband service, which began in 2008 on Eutelsat’s Hot Bird 6 satellite, was designed to offer a Ka-Sat-type service from a satellite whose Ka-band capacity was sharply limited. Hot Bird 6 is principally a Ku-band television broadcast satellite.

Telecommunications consultancy IDATE estimates that as of January there were about 120,000 consumer satellite broadband subscribers in Western Europe, a figure that suggests Tooway had some 40,000 subscribers at that time. Patacchini did not dispute that figure.

Ka-Sat’s bandwidth is distributed through 82 spot beams, each with 900 megabits per second of capacity. The spot beams are pointed throughout Europe and parts of North Africa in an even distribution. While bandwidth can be shifted somewhat from one spot beam to one nearby, Ka-Sat does not include on-board processing that would permit maximum bandwidth-allocation flexibility.

That has proved to be a problem for ViaSat’s WildBlue consumer broadband service. The WildBlue-1 satellite, like Ka-Sat, distributed its fixed beams evenly over the United States, only to find that demand is strongest not in rural areas, but in the suburbs. With its satellite’s beams not reconfigurable, WildBlue has seen some beams sit relatively unused while beams covering other geographic areas have been sold out.

Patacchini agreed that Eutelsat may have a similar problem but said it is likely to be less severe given the nature of European population distribution.

“Ka-Sat’s coverage area is smaller than the United States but has a population of 800 million people, versus 300 million for WildBlue,” Patacchini said. “Unlike the United States or Canada, there are no areas in Europe that are that far from urban and suburban population concentrations. So we are not going to have a satellite beam that covers, say, only a desert, even if we evenly distributed the beams to cover all of Europe.”

Eutelsat’s initial assessment is that, as in the United States, European demand for Ka-Sat might be higher in the suburbs than in the rural areas often the subject of government broadband-stimulus programs.

Eutelsat Commercial Director Andrew Wallace said market assessments have found 13 million European households not served by DSL or cable. But 17 million households that have access to DSL are so far from the DSL signal boosters that the service is poor. Knowing what real broadband looks like by their proximity to the cities, these underserved consumers are likely to be among the first to subscribe to Ka-Sat, Wallace said in a May 24 webcast organized by Eutelsat and the U.S. telecommunications consultancy, Northern Sky Research.



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Peter B. de Selding was the Paris bureau chief for SpaceNews.