PARIS — Gilat Satellite Networks of Israel will provide Ka-band networking equipment and design Ka-band consumer broadband terminals for’s Astra2Connect service as the Luxembourg-based fleet operator moves the service from Ku-band starting in late 2012, Gilat and SES announced Aug. 1.
The SES framework contract is the first Ka-band system for Petah Tikva-based Gilat, which has installed Ku-band broadband networks around the world but is looking to Ka-band as the biggest near-term growth opportunity. Gilat said the SES agreement is valued at up to $70 million for five years, assuming all options are exercised.
Doron Elinav, Gilat’s vice president for marketing, said the SES contract will help Gilat position itself for work on what the company believes will be numerous Ka-band satellite broadband networks being planned around the world. In an interview, Elinav said Gilat has concluded that Ka-band has advantages that outweigh its higher susceptibility to rain attenuation when compared with Ku-band.
“Most spot-beam satellites that you see going up in the next few years will be in Ka-band,” Elinav said. “Obviously rain attenuation is a major challenge for CPE [consumer-premises equipment] vendors, and requires additional coding and modulation. So yes, it is a challenge, but we have overcome it.”
Gilat is one of several ground hardware manufacturers competing for Australia’s NBN Co. Ka-band consumer broadband network. Gilat has teamed with Thaicom of Thailand to provide an interim Ku-band solution for Australia using Thailand’s IPStar satellite, which has multiple spot beams but in Ku-band.
Elinav said that many countries around the world are concluding that they need their own national satellite systems, including a broadband capability. But for many of these nations, building a dedicated Ka-band satellite will be uneconomical. Because of that, he said, several of them are likely to turn to a hosted payload solution in which a Ka-band payload is placed on a satellite whose principal broadcast capacity is in Ku- or C-band.
That is what SES is doing. The world’s second-largest satellite fleet operator by revenue does not lack the financial wherewithal to build its own Ka-band satellite, as its principal European competitor,of Paris, has recently done with its Ka-Sat satellite. Ka-Sat entered service in late May.
But SES remains skeptical about whether consumer broadband by satellite has a long future in Europe, where regulatory pressure on network operators could gradually force these companies to extend terrestrial wireless links to rural and other regions now unconnected to the broadband telecommunications grid.
SES Chairman Romain Bausch reiterated on July 29 during SES’s quarterly earnings release and conference call that the company does not believe that satellite consumer broadband in Europe has enough of a future to merit construction of a dedicated Ka-band satellite.
Instead, SES is proceeding in smaller steps, adding Ka-band capacity to three satellites — Astra 2E, Astra 2F and Astra 2G — that will be launched between late 2012 and 2014 into one of SES’s principal satellite television slots at 28.2 degrees east longitude. They will replace the all-Ku-band satellites now stationed there.
SES counts more than 80,000 subscribers to its Ku-band Astra2Connect service. Bausch said during the conference call that he believes Astra2Connect, especially once the Ka-equipped satellites are launched, will be able to compete with Eutelsat’s Tooway service on price and megabits-per-second data delivery rates to customers.
Bausch said SES will insist on having at least two suppliers of its future Astra2Connect Ka-band service. Industry officials said SES is likely to conclude a deal with Newtec of Belgium, which currently provides the Astra2Connect Ku-band gear, for the provision of Ka-band hardware.
For its Tooway service, Eutelsat has elected to deal directly — and exclusively — with ViaSat Corp. of Carlsbad, Calif., for broadband ground hardware. Eutelsat wanted to take advantage of ViaSat’s existing production line for ViaSat’s WildBlue Ka-band broadband service in the United States as a way of keeping prices as low as possible. WildBlue has about 400,000 subscribers in the United States.
Elinav said Gilat’s SES contract is similar to an indefinite-delivery, indefinite-quantity framework arrangement with a relatively small firm-fixed portion and the rest accounted for by various options that are exercised when certain milestones are achieved.
SES said it will not purchase Astra2Connect terminals on its own, but restrict its role to that of Astra2Connect bandwidth provider to distribution partners who will be obliged to make consumer-equipment purchases. But SES could help fund the design of the consumer hardware, and that appears to be what it is doing with Gilat.
SES will coordinate demand for terminals, regrouping distribution partners’ requests to present Gilat with large orders permitting unit costs to be reduced, SES spokesman Markus Payer said Aug. 1.