Satellite Operators Eager To Fill Growing Bandwidth Demand

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Military and other users of commercial satellite services are showing an increased appetite for bandwidth-intensive applications that satellite operators with a current surplus of capacity should be eager to fill.

That is one of the key findings from a recent day-long conference, New Satellite Market Opportunities: Commercial & Defense, held at George Washington University here. The satellite services that are increasing in popularity include broadband, mobile and combinations of the two, a variety of presenters said during the event.

As a whole, the satellite industry has overcome the embarrassing bankruptcies of the late 1990s that cost investors billions of dollars and left them wary of pumping additional funds into the sector. Since then, the industry has gone from generating $75 billion in annual revenues to a pace that will take it beyond $100 billion a year by the end of the decade, said Joseph Pelton, director of the university’s Space and Advanced Communications Research Institute and the conference organizer.

Pelton noted that in November, the U.S. Federal Communications Commission approved Mobile Satellite Ventures’ plan to deploy a network of ground-based signal amplifiers as an adjunct to the company’s mobile satellite services. Additional spectrum could be offered to other service providers to enhance the mobile communications capabilities now available, he said.

Satellites are critical communications infrastructure for the U.S. Department of Homeland Security and the emergency alert system, said David Cavossa, executive director of the Satellite Industry Association , a trade group here. Cavossa said one of the changes the government needs to make in obtaining commercial satellite capacity is to sign multi-year lease commitments.

That kind of advanced planning gives the government assured access to capacity that it needs and allows satellite operators to count on revenue to justify expenditures for either new or replacement spacecraft, Cavossa said.

Military users, in particular, are tapping a wide array of bands to meet their fast-growing needs, said Mary Ann Elliott, chairman and chief executive officer of Falls Church, Va.-based Arrowhead Global Solutions, a provider of satellite and terrestrial telecommunications solutions. X-, C-, Ku-, Ka- and L-bands are among those currently used by the military.

However, the existing U.S. Department of Defense budgeting process does not put the same priority on long-range investments in telecommunications infrastructure as it does on procuring an aircraft carrier or a fighter jet, Elliott said.

James Mazzei, a consultant with the Aerospace Corp. who works with the Defense Information Systems Agency (DISA), said the reality is that the Pentagon spends huge amounts of money on specialized spacecraft. The cost of a sophisticated military satellite can approach $2 billion, he added. The Aerospace Corp. of El Segundo, Calif., provides engineering services and advice on Pentagon space programs; DISA buys commercial satellite communications services for the military.

“The cost is terrible,” Mazzei said. “They are all one of a kind. Military systems need incredible numbers of bits.”

One of the newest commercial satellite ventures, WildBlue’s pending residential broadband service, will test the commercial viability of high-capacity, Ka-band capability, said Robert Bell, executive director of the World Teleport Association. It is crucial for WildBlue and other satellite broadband ventures to reduce their costs to grab a larger share of the market, which today is dominated by terrestrial providers, he said.

The demand for satellite broadband has materialized more slowly than expected, but the trend is clear, said Jay Yass, vice president of business development at satellite operator Intelsat, one of WildBlue’s major financial backers. Officials with Denver-based WildBlue have expressed the belief that theirs will be the first satellite service to be competitively priced with cable-modem and DSL alternatives.

An existing satellite broadband service provider is Hughes Network Systems of Germantown, Md., which has more than 500,000 satellite broadband terminals deployed worldwide. Those users rely on Ku-band capabilities, but the company still plans to launch at least one Spaceway satellite that would give it enhanced capacity, said John Kenyon, a senior vice president at the company .

London-based Inmarsat recently launched the first of its I-4 series satellites that will offer mobile broadband service to support voice, data and video communications worldwide, Pelton said. Inmarsat’s broadband global area network service can be used for defense, homeland security and police activities.

The Connexion by Boeing service, meanwhile, already is used by more than a half-dozen non-U.S. airlines to provide international passengers with Internet access and other services. The service has been extended to the maritime industry to allow the same mobile broadband capabilities aboard ships.

On-demand, broadband multimedia (3G) services also can be supported by satellites, Pelton said. As 3G gains popularity, satellite operators could see additional demand for transponder leasing.