The insatiable demand for more bits, delivered at a faster rate, is matched by the relentless surge of technology. Two technical revolutions are looming that will dramatically alter the business of satellite communications.
We all use more bits for sharper camera and television pictures. The Federal Communications Commission (FCC) Broadband Plan noted that the average data rates double every three years, or increase by an order of magnitude every 10 years. Ten years ago, top-line digital cameras captured 2 megapixels. Today the top-rated cameras feature 12 to 18 megapixels. Smartphones provide continuous mobile broadband Internet access and further push up transmission demand.
Ever-expanding pipelines distribute digital information. Fiber-optic installations deliver tens of terabits per second (one Tbps = 1,000 gigabits per second) under the oceans and around the world. Similar terabit trunk lines connect Africa and South America to Europe and North America. Expresso’s 5.12 Tbps capacity Africa Coast to Europe submarine fiber-optic cable is ready to land on the shores of Ghana ahead of commercial launch by the end of this year. Increasingly higher-speed broadband is being delivered to businesses and homes throughout the world.
The first revolution is the high-throughput satellites that are being produced. They will vastly expand the global capacity of satellite communications. Twenty-seven high-capacity Ka-band satellites are being built for service around the world. In a single launch, ViaSat-1 has more than doubled transmission capacity over North America, and the launch of Echostar 17/Jupiter will soon add another comparable increment of capacity.
Fixed satellite service (FSS) operators are substantially expanding transmission capacity in the legacy C- and Ku-bands. The three largest FSS operators have about 20 satellites in production for replacement and expansion. Intelsat has announced the Epic series, two high-throughput Ku-band satellites that would be launched in 2015 and 2016. Each of these satellites would have more than 10 times the capacity of other satellites in the Intelsat fleet.
The high-throughput satellites cost about 50 percent more than large FSS satellites, but they provide 10 to 100 times more throughput. Consequently, the capital cost for transmission is falling precipitously. Satellite operators will be able to provide less-expensive transmission and better compete with terrestrial alternatives.
As of March, there were at least 256 commercial geostationary communication satellites with 8,319 transponders and an effective throughput of 333 Gbps. The high-throughput satellites in construction will have a combined throughput of 765 Gbps. Within the next three years the capacity of communication satellites will have tripled from 333 Gbps to more than 1 Tbps.
Convergence between fixed, mobile and broadcasting services has blurred service distinctions. Agile user terminals compensate for user movement. Adaptive coding and diversity remove atmospheric fades. Local and regional broadcasting is ideally suited to spot beam delivery. There is no longer a need to draw a fine line between FSS, broadcasting satellites and these new high-throughput broadband satellites. DirecTV already uses Ka-band to provide 99.9 percent reliable service to millions of subscribers. Many FSS clients will find a way to take advantage of the lower-cost transmission benefits. Most users will find that broadband service at Ka-band is indistinguishable from current fixed satellite service. Broadcasters or cable operators who want 99.999 percent availability will be able to use multiple gateways to provide diversity service and maintain high availability.
High-throughput satellites will have vast implications for the satellite industry. Transponder lease prices will certainly drop. During the late 1990s, there was a surge in satellite capacity. At the same time, larger satellites reduced the capital cost per transponder. Between 1995 and 2005, transponder lease prices dropped 50 percent. Reasonable models indicate that transponder prices will drop again over the next five to 10 years. There are already indications that satellite users anticipate price reductions. They are signing shorter transponder leases on high-throughput satellites, some as short as two years.
There will be a migration from Ku-band to Ka-band services that will require retrofitting the vast ground terminal infrastructure. The additional cost of new Ka-band equipment may be a temporary barrier to migration for existing users. New users will have a clear economic choice.
The second revolution is all-electric satellite propulsion. All-electric satellites double satellite capability or cut launch costs in half. This breakthrough caught many off guard in spite of a 50-year development, qualification and demonstration period. This technology is a factor-of-two efficiency improvement over conventional chemical propulsion systems.
Current satellites are launched with 42 percent spacecraft and 58 percent fuel. With all-electric propulsion that will be 83 percent payload and 17 percent fuel. This results in a huge difference in launch cost or a vast expansion of payload capability. Boeing has secured a contract to build four all-electric satellites, and other satellite manufacturers are making plans.
The downside is longer times (four to six months) to transfer a satellite to geostationary orbit. Since 80 percent of satellite orders are replacements, this delay may be acceptable with advanced planning. Higher-thrust ion engines will reduce the delay time. One supplier, Elwing, has a plasma propulsion technology currently being tested at NASA that may reduce this wait to two to three months.
Every major technical advance has risks, and frequently there are problems. Many of the issues have already been faced, but there may be future disappointments. We encountered a number of electrical power issues on satellites when power levels expanded up to 20 kilowatts over the past decade. Progress and change always provide opportunity for some and threats for others.
Expansion of throughput and lower costs for transmission are essential to the survival of the satellite industry. No doubt there will be turbulent times ahead as satellite operators adapt to a capacity-rich environment. The last time the satellite communication industry created excess capacity we saw operators stop buying satellites and spin off their satellite manufacturing capability. Satellite manufacturing is likely to be impacted by excess capacity. The number of satellites ordered has slowed down, and that trend could be sustained while new capacity is absorbed. All the satellite builders will probably retool for all-electric or mostly electric satellites. These two major steps will help keep space-based solutions viable in the global communications networks. Moving forward aggressively entails great risks, but there will be great rewards for the survivors.
Roger Rusch is president of TelAstra Inc., a firm that provides consulting services to investors in satellite communications.
