Broadband Satellite in Europe & North Africa

After having met with mixed results, two-way satellite access has been enjoying a upswing in popularity over the past two years. This report examines recent developments in the United States, Asia and Europe, then analyses the issues involved in rolling out these services and assesses the opportunities tied to the deployment of fixed satellite access services in residential markets in Europe and North Africa.

Key questions

• What is the actual market outlook for satellite technologies when competing with terrestrial, wireline and wireless technologies?
• What positioning scenarios would be the most relevant for a satellite operator, given the features of the broadband market in the different geographical zones being examined?
• What advantages does use of the Ka band bring?
• What are the market drivers and issues surrounding the offer’s structure?
• Satellite, WiMAX,3G: who will win the battle to reduce the digital divide?

1. Executive Summary

1.1. Why is satellite broadband back in the news?

1.2. How should satellite position itself with respect to terrestrial technologies: as complement or competitor?

1.3. Two-way access will benefit from the European Commission’s wide-reaching plans to reduce the digital divide

1.4. European markets with varying features

2. Introduction

3. Methodology

4. Can satellite be a key technology for providing end-user access?

4.1. Features of two-way access

4.1.1. How it works

4.1.2. Technical specificities tied to use of the Ka band

4.1.3. Economic advantages of using the Ka band

4.1.4. Increasingly competitive commercial offers

4.1.5. Latency not a major obstacle.

4.2. A technology that’s back in the news.

4.2.1. In North America

WildBlue Communications.

Hughes Communications

ViaSat

Telesat

4.2.2. In Asia

IPSTAR.

4.2.3. In Europe

Avanti Broadband

Eutelsat’s Tooway service and the KA-SAT satellite

SES Astra Astra2Connect

5. Competition from terrestrial technologies

5.1. Wireline technologies still dominate but wireless broadband gaining momentum

5.1.1. Massive dominance of wireline systems: xDSL and cable modem

5.1.2. Market development

5.1.3. Wireless cellular network technologies

5.1.4. Alternative wireless technologies: Wi-Fi and WiMAX

5.1.5. Market development

5.2. Outlook for new generation ultra-fast broadband technologies.

5.2.1. Fibre optic and FTTH.

5.2.2. Future of mobile solutions and 4G

6. Satellite’s competitiveness

6.1. Technological competitiveness

6.2. An efficient solution for reducing the digital divide.

6.3. Local authorities play a decisive role in the choice of solutions

6.3.1. Growing number of plans in Europe aimed at reducing the digital divide

6.3.2. WiMAX, satellite, 3G: who’s going to win?

7. Market segmentation criteria

7.1. Socioeconomic criteria

7.1.1. PC penetration rate

7.1.2. GDP per capita

7.1.3. Rural/urban population density

7.2. Features of a terrestrial broadband rollout

7.2.1. DSL network coverage

7.2.2. Broadband penetration

7.2.3. Internet access speeds

7.2.4. Internet access prices

7.3. Criteria shaping the development of satellite TV

7.3.1. Satellite dish equipment levels

7.3.2. Satellite pay-TV penetration levels

7.4. Main challenges and uncertainties

7.4.1. Tied to the development of wireline networks

7.4.2. Tied to the development of wireless networks

7.4.3. Tied to the TV market structure

7.4.4. Tied to government involvement

8. Target markets with varying features

8.1. Characterisation of satellite’s target markets.

8.2. Positioning strategies by zone

8.2.1. Strategic options open to satellite operators

8.2.2. Suitability of the different strategic options according to the geographical zone being targeted

8.2.3. Synthesis

Glossary

Tables & Figures

Table 1: Positioning strategies available to a satellite operator

Table 2: Comparison of a selection of offers available in France: 2004 vs. 2009

Table 3: Future range of speeds supplied by the Tooway offer, based on the KA-SAT

Table 4: Properties of xDSL technologies

Table 5: Cable modem standards

Table 6: Properties of cable technologies

Table 7: Properties of 3G technologies

Table 8: Performances of 802.11 standards

Table 9: Properties of Wi-Fi technologies

Table 10: Fixed WiMAX performance

Table 11: Properties of fixed and mobile WiMAX technologies

Table 12: A selection of current/planned WiMAX service rollouts in Europe and North Africa

Table 13: Properties of FTTH technologies

Table 14: Properties of 3G+/4G technologies

Table 15: Estimated number of households not covered by fixed broadband networks at the end of 2007

Table 16: Local authorities’ WiMAX rollout strategies

Table 17: List of satellite TV services available in Europe in 2008

Table 18: Identification and characterisation of potential target markets

Table 19: Positioning strategies for a satellite operator

List of Figures

Figure 1: Comparison of current technologies

Figure 2: Total DSL market coverage at the end of 2007

Figure 3: List of countries analysed in this report

Figure 4: How two-way internet access via satellite works

Figure 5: Example of beam coverage with frequency reuse

Figure 6: Estimated cost of bandwidth for Ka-band systems (launched satellite)

Figure 7: Change in the price of a broadband satellite reception terminal

Figure 8: Main uses of the Internet

Figure 9: Main uses of the internet in French households

Figure 10: Breakdown of Internet users by age group, for each application

Figure 11: Growth of the WildBlue subscriber base

Figure 12: Breakdown of WildBlue subscribers by population density

Figure 13: Impact of WildBlue on Ka-band terminal shipments in the United States

Figure 14: Residential internet access services marketed by WildBlue

Figure 15: Growth of HughesNet subscribers

Figure 16: The new service architecture with the SpaceWay 3 satellite

Figure 17: The Spaceway transmission system.

Figure 18: Residential internet access services marketed by Hughes

Figure 19: ViaSat-1 development roadmap

Figure 20: Estimation of the ViaSat-1’s capacity, in Gbps, compared to other Ka, Ku and C-band satellites in North America

Figure 21: Growth of the installed base of Ka-band terminals in Canada

Figure 22: The Thaicom 4/IPStar satellite’s coverage

Figure 23: IPSTAR service footprint at the end of 2008

Figure 24: Growth of IPSTAR terminal sales

Figure 25: Geographical breakdown of IPSTAR terminal shipments (end of 2008)

Figure 26: Current coverage of the Avanti service on Intelsat IS-903

Figure 27: Performance of the HylasOne satellite

Figure 28: Footprint of the service provided by Avanti

Figure 29: Avanti business model as of the end of 2008

Figure 30: Tooway Ka and Ku-band coverage

Figure 31: Tooway offers distributed by Sat2Way in France, as of January 2009

Figure 32: Footprint of the Eutelsat Ka-Sat satellite

Figure 33: The Sat3Play system architecture

Figure 34: Triple play via Astra2Connect

Figure 35: SES Global’s market view.

Figure 36: Range of speeds offered by Nordnet

Figure 37: Combined high-speed access/TV reception via satellite

Figure 38: DSL variants, according to downstream bitrate

Figure 39: Theoretical performance of ADSL2+, VDSL and VDSL2

Figure 40: European broadband market structure by access technology, Q4 2008

Figure 41: North African broadband market structure by access technology, Q4 2008

Figure 42: Change in the monthly price of a basic DSL service

Figure 43: Use of frequency bands by geographical zone

Figure 44: Number of sites for covering the population with HSxPA and Mobile WiMAX

Figure 45: Comparison of a selection of Internet 3G services in Europe over Mobile and PC Datacard/USB key (mid-2008)

Figure 46: Penetration of mobile Internet usage in a selection of European countries

Figure 47: Where French users access the mobile Internet

Figure 48: 3GLTE deployment around the world

Figure 49: GSM evolution to 3GLTE

Figure 50: The future of mobile technologies

Figure 51: Comparison of current technologies

Figure 52: Satellite’s positioning for supplying broadband access services in rural areas.

Figure 53: Applications enabled by higher speeds.

Figure 54: Map of broadband dead zones in France in 2008

Figure 55: PC penetration rates in 2006

Figure 56: GDP per capita in 2008

Figure 57: Population density in Europe

Figure 58: Population density in North Africa

Figure 59: Total DSL network coverage at the end of 2007

Figure 60: DSL coverage of urban and suburban areas at the end of 2007

Figure 61: DSL coverage of rural areas at the end of 2007

Figure 62: Broadband penetration as of Q3 2008

Figure 63: End-user DSL bitrates in Europe and North Africa at the end of 2007

Figure 64: End-user cable bitrates in Europe and North Africa at the end of 2007

Figure 65: Average price of a broadband offer (DSL & Cable) at the end of June 2008 - 4 Mbps downstream

Figure 66: Average price of a broadband offer (DSL & Cable) at the end of June 2008 - 10 Mbps downstream

Figure 67: Percentage of households equipped with a satellite dish at the end of 2008

Figure 68: DTH subscriber base at the end of 2008

Figure 69: Map of potential target markets for a satellite internet access offer

Figure 70: Example of satellite triple play offered by Vivéole (based on Astra2Connect)

Figure 71: Positioning of the different strategic options in zone 1

Figure 72: Positioning of the different strategic options in zone 2

Figure 73: Positioning of the different strategic options in zone 3

Figure 74: Positioning of the different strategic options in zone 4