Residential LTE vs. Satellite broadband
Maxime Baudry
Co-Head of Satellite Practice at IDATE
Perspectives for satellite broadband facing residential LTE offerings
Just as they did with 3G, telcos started to propose residential offers based on LTE, how does it compare with satellite broadband offers?
Residential LTE, a direct competitor to satellite broadband
ust as they did with 3G, telcos started to propose residential offers based on LTE. It’s notably the case of Verizon Wireless in the United States who proposes “Home Fusion” since May 2012, a service that allows households to access broadband via an outdoor LTE antenna installed on one of the walls of the building. The antenna is billed 200 USD but the installation is free. How does it compare with satellite broadband offers? Downloading speeds vary between 5 and 12 Mbps in average with a pricing range going from 60USD for 10GB of data to 120 USD Monthly for 120 GB. With similarities in pricing, downloading speeds and data caps, LTE is positioned as a direct competitor to Satellite broadband.
Residential LTE coming to Europe
In Europe, first LTE offers arrive on the market. The first to propose such services was Netcom, a filial of TeliaSonera, who was first to propose LTE in Norway. It offers 100GB of data for a monthly fee of 68 EUR. According to Netcom, it is very likely that this kind of solution could be considered as a substitute to DSL, especially when the monthly data cap exceeds observed traffic on DSL networks (An average of 30 GB per household). In germany, Vodafone proposes a similar offer since 2012, but this time it is differentiated with quality of service through network speed with prices starting from 25 EUR to 40 EUR monthly to have access to 50 Mbps and 30 GB.
Satellite Broadband: no more competitive?
Considering this kind of offers, satellite broadband is no more competitive, neither on network speed nor on monthly data cap offered. Even though these new offerings materializes the LTE threat for satellite broadband we had foreseen, LTE coverage remains very limited. Anyhow, satellite will have to pursue its downloading speeds increase since 2008 if it wants to maintain a competitive advantage on this market.
Positioning of some satellite broadband offers in France, March 2013
Source: Digiworld by IDATE
Maxime Baudry
Head of the radio technologies & spectrum practice, IDATE
m.baudry@idate.org
Satellite Broadcast: Main trends and impacts for the industry
Maxime Baudry
Co-Head of Satellite Practice at IDATE
Satellite TV broadcast booming in emerging countries
Satellite TV broadcast is put in the forefront with our analysts attending the Satellite 2013 summit in Washington, USA from march 18 to 21 2013
Satellite broadcasting is currently being led by the explosive development in emerging countries. According to IDATE’s findings, there were at year-end 2012, 372 million satellite households with more than a half located in emerging countries. As an example, the Indian satellite pay-TV market registered a growth of 20 million households in only two years, to reach an estimated base of 51 million subscribers at the end of 2012.
World's current satellite TV broadcast market
Between 2008 and 2011, close to 100 million households worldwide switched over to satellite TV, which is almost identical to how many viewers terrestrial TV lost during that time. To compare, cable TV gained 55.5 million households and IPTV 26.4 million during that period.
Breakdown of the globe’s TV households by access technology
Source: IDATE, World TV Markets, August 2012
Satellite TV is booming in emerging countries
Satellite broadcasting is currently being led by the explosive development in emerging countries. According to IDATE’s findings, there were at year-end 2012, 372 million satellite households with more than a half located in emerging countries. As an example, the Indian satellite pay-TV market registered a growth of 20 million households in only two years, to reach an estimated base of 51 million subscribers at the end of 2012.
Impacts of TV broadcasting for the satellite industry
These developments have great impact on satellite capacity, as it is estimated that emerging countries roughly accounted for 90% of the new satellite capacity leased in 2012. According to SES, the weight of emerging countries in the total demand of satellite capacity worldwide will move from 69% in 2012 to 76% in 2019. Whereas the Western Europe and North American markets are expected to register a CAGR of -0.3% and -0.5% respectively, the Latin American market will for instance grow at a CAGR of 6.3% and the Eastern European one at +3.3%.
Maxime Baudry
Co-Head of Satellite Practice at IDATE
m.baudry@idate.org
More information on Satellite Broadcast in our TV observatory
Satellite broadband : main market trends to 2020
Maxime Baudry
Head of the radio technologies & spectrum practice, IDATE
State of the art of satellite broadband
The scope is put on the satellite ultra broadband with our analysts attending the upcoming Satellite 2013 summit in Washington, USA.
Three to five times more expensive than ADSL offers in the early 2000s, broadband satellite services have long required a sizeable investment from rural residential users interested in this type of access, with some even preferring to opt for “unlimited PSTN”. Prices have come down since then and, even though satellite access is still more expensive than ADSL, the gap has shrunk substantially. At year-end 2012, there were 1.2 million subscribers in North America, 200 000 in Asia Pacific (IPStar service), and roughly 150 000 in Europe.
Drop in the price of broadband satellite terminals
Parallel to the decrease in the price of subscriptions, the price of satellite terminals has also dropped, thanks to technical improvements which have helped bring down production costs, and to the economies of scale generated by the tens of thousands of terminals sold by manufacturers. Current prices vary between 250 and 350 EUR and could drop to 200 EUR by 2015.
Evolution of broadband satellite reception terminal prices (EUR)
Source: Digiworld by IDATE
Industry preparing for ultra-fast broadband via satellite
As part of its ARTES programme, the ESA (European Space Agency) has plans to develop a very high-speed satellite called the Terabit/s Satellite. Based on a very broad platform, the Terabit/s spacecraft will make it possible to achieve speeds of around 200 Mbps with dishes measuring 40 cm in diameter, through the use of the Q and V frequency bands.
French space agency CNES also has similar plans. The THDSat project is currently in R&D phase and could supply French households and SMEs with access at 20-100 Mbps starting in 2016. The THDSat initiative would involve satellite constructors EADS Astrium and Thales Alenia Space, and possibly service provider Eutelsat, among others.
Impacts for satellite broadband
Satellite is clearly a viable alternative technology for reducing all t ypes of digital divide. Its development is nevertheless being stunted by the steady progress being made in terrestrial technologies and the need to increase data rates.
Although latest satellites allow access speeds of up to 20 Mbps, they are behind their earthbound rivals as the data rates supplied by FTTx or LTE are closer to 50-100 Mbps. It is only by being able to rival its terrestrial counterparts that satellite can become a credible alternative, which is why projects like the THDSat and the Terabit/s Satellite are now on the table.
Maxime Baudry
Co-Head of Satellite Practice at IDATE
m.baudry@idate.org
DigiWorld Summit 2012
"Game Changers: Mobile, Cloud, Big Data"
Opening day of the 34th Summit: The future of the digital economy according to its leaders
This morning IDATE Chairman François Barrault opened the 34th edition of the DigiWorld Summit in Montpellier. The Summit has become one of the must-attend events each year for playmakers in the telecom, Internet, television and video game industries. It will bring together more than 1,200 participants and 130 speakers from over 20 countries around the world.
IDATE and the members of the DigiWorld Institute are putting the spotlight on “Game Changers: Cloud, Mobile, Big Data” for this year’s Summit. The objective of the event is to discuss the factors that will lead to the emergence of the next decade’s digital leaders.
Executives from device and cloud heavyweights as well as content providers and telecom operators will present their views on these subjects over the next two days.
John Chambers, CEO of Cisco, affirms that the pace of innovation today is the fastest it has been in the past 25 years.
Hans Vestberg, CEO of Ericsson, stresses the need to combine a strategy of vertical integration and openness to “capture the innovation of other players.” For Ben Verwaayen, CEO of Alcatel-Lucent, Europe should speed up LTE rollouts despite the economic uncertainties. Qualcomm Chairman Paul Jacobs, riding high on the success of the firm’s technology, which is used in many smartphones and tablets, predicts a “sixth sense, in that everything will be connected around us.
In addition to such distinguished speakers, the DigiWorld Summit is also recognized for its detailed preparation of the themes and the series of sessions based on IDATE analysis. During the opening session the Institute’s experts will each present an overall analysis of their focus sectors. They will highlight the dominant role of three game-changing factors applicable to all the links in the value chain:
- Mobile’s irresistible momentum, with the battle of the OSs and then LTE, which is expected to be central to the new differentiation strategies to break out of the price wars.
- The Cloud, which for IDATE is not limited to externalized enterprise computing (“cloud computing”) but includes application distribution architectures (including for audiovisual content), shaking up traditional roles.
- Big Data, an asset that all players will be looking to capitalize on through real-time applications, aiming to enhance their services and offerings (devices, content, connectivity services, storage and application platforms, etc.).
Three important voices offer a counterpoint to IDATE’s analyses: Ben Verwaayen, the boss of Alcatel-Lucent, Léo Apotheker, former chief of SAP and HP, and Carsten Schloter, CEO of Swisscom. Overall the messages converge, with all three insisting on one point: Europe has a lot going for it. However, these pluses are particularly concentrated in the telecom industry, which is currently suffering multiple ills: the economic situation, its relative disintegration and the constraints of a world where traffic is exploding but applications tend to lean in favor of over-the-top (OTT) players.
The sessions on November 15 will be devoted to sketching a potential next-generation telco. Presenters include Terry Denson, Vice President of Global Strategy for Verizon, Stéphane Roussel, CEO of SFR, Jean-Ludovic Silicani, Chairman of ARCEP. The heads of Ericsson and Orange, Hans Vestberg and Stéphane Richard, will close the debate. Some big names in traditional content (the BBC) and new online platforms (like Netflix) will also be present. A conclusion will be given by players that hold promising futures in platforms with IBM, Amazon, BT and Cisco.
Also note that five executive seminars will be presented on November 14 and 15, on the following topics:
- Impacts on privacy, with the input of Google and CNIL.
- Key issues for next-generation networks: FTTx, LTE, etc.
- Expectations surrounding the rise of smart cities.
- Perspectives related to the concept of smart TV.
- New business models for video gaming.
> Follow live the plenary sessions: Live streaming DWS12 !!!
> More information about our program and our speakers on the website DigiWorld Summit 2012
Satellite Ultra-Broadband
Maxime BAUDRY
Head of Satellite Practice at DigiWorld IDATE
Africa, a new growth opportunity?
IDATE has just published its study “Satellite Ultra-Broadband in Europe & Africa” which explores the latest developments in broadband and ultra-fast broadband markets in Europe and Africa. After a detailed examination of the dynamics of these areas, in both fixed and mobile markets, the report delivers strategic and figure-backed responses to the question of the current and future role of satellite in the race to deploy broadband and ultra-fast broadband. The report comes with its own database including the set of indicators analyzed for all the areas studied.
Maxime Baudry, project manager of this study and co-header of the satellite practice at DigiWorld IDATE, shares his point of view about the actual situation of the Satellite Ultra-Broadband:
“Satellite technology has made enormous progress in recent years, boosting the average downlink speed from 3 Mbps in 2008 to 10-18 Mbps in 2012, and raising traffic caps from 2 GB to 10-20 GB (in some cases even unlimited). It thus seems set to even tackle DSL gray zones, which only a few years ago seemed inaccessible.”
He adds: “On the ultra-fast broadband front, however, satellite is lagging behind: while large-scale rollouts of FTTx and LTE, and even LTE-Advanced between 2012 and 2020 will offer observed download speeds of 30-70 Mbps (and even 200-300 Mbps with LTE-Advanced), the most advanced satellite developments make it possible to supply “only” 50 Mbps, and even then not before 2015 at the earliest. To be able to offer such speeds, satellite technology may well switch to frequency bands even higher than the Ka band.”
Africa, a new growth opportunity?
- Africa’s fixed broadband market is still extremely limited, with an average density of 3.4% of households in the region at end-2011.
- With limited fixed infrastructures, operators are focusing all their efforts on mobile broadband, often only deployed in the most profitable urban areas.
- Over the past three years, however, the region has seen major rollouts of underwater cables, boosting subscriber speeds. Africa’s capacity at end-2011 is estimated at 22 Tbps versus 4 Tbps at end-2009.
- Satellite ultra-broadband remains a tough market in most countries of Sub-Saharan Africa, where barriers to entry remain very high, such as low ARPUs, poor literacy rates (30% to 40% of the population), low electrification (10% of the rural population) and low PC penetration (often below 5% of households)
- Extremely high equipment prices caused by high customs barriers remain a major handicap.
- Against this backdrop, only a few countries seem to present any real short-term potential: South Africa, Kenya, Nigeria and countries in North Africa.
Promising market outlooks
IDATE estimates that between 2012 and 2016 the number of satellite broadband subscribers in Europe will increase by 29% annually.
Africa will post the sharpest growth, a region where the telecoms infrastructure is much more restricted than in Europe. We estimate that the launch of solutions costing 20-30 EUR a month in Africa, such as YahClick and IP Easy, are likely to attract a tier-one clientele with incomes well above the majority of the population, eager to acquire a fixed broadband access solution that is superior to traditional landline connection and often at a cheaper price (excluding the expensive equipment cost which, at around 600 EUR, is inflated by customs barriers). However, areas of uncertainty remain in this market, especially over the future technical and economic performance of fixed infrastructures after the deployment of numerous underwater cable and terrestrial backbone projects funded by the World Bank.
Eastern Europe, the market that seemed to offer most potential at the outset, has failed to take off, with subscriber bases remaining very limited. Several reasons explain this failure: it is a tough market with extremely low ARPUs, making it hard for satellite services operators to make sufficient profits. Also, most countries have invested in mobile infrastructures (LTE already deployed in many countries, including Hungary, Lithuania and Poland), sidelining satellite. Lastly, operator distribution networks revolve around small business operations, while in Western Europe they usually rely on major operators such as Orange, SFR, Swisscom and Deutsche Telekom.
Western Europe has not seen very high growth either. Two countries, France and Germany, continue to make up most of the subscriber base, while operators have managed to boost subscriber numbers quickly via government programs to reduce the digital divide, such as Avanti in Scotland and Eutelsat in Italy. The German market though does now seem to be losing subscribers to other technologies, particularly LTE deployed in rural parts of the country.
Maxime BAUDRY
Project manager
m.baudry@idate.org
Visit our website for more information on this topic
DigiWorld Summit 2012
Christine BARRE
Responsable DigiWorld Summit, DigiWorld by IDATE
A l’approche du DigiWorld Summit 2012, l’IDATE livre son analyse de la situation de l'économie numérique européenne
A l’occasion d’une conférence de presse organisée à Paris ce jour, le DigiWorld Institute by IDATE a livré son analyse de l’avenir de l’Europe des Télécoms et de la Télévision.
Quelques mois après la publication du DigiWorld Yearbook et quelques semaines avant le DigiWorld Summit, le DigiWorld Institute by IDATE, Institut spécialisé dans le domaine des télécommunications, médias et Internet, livre son analyse de la situation de l'économie numérique européenne à travers la situation exemplaire des secteurs des télécommunications et de l'audiovisuel. Cette conférence a également été l’occasion de présenter le programme du prochain DigiWorld Summit. Alors que la dernière édition du DigiWorld Yearbook avait été l'occasion d'attirer l'attention sur l'accentuation des faiblesses de la zone, le DigiWorld Institute by IDATE revient sur les grands enjeux auxquels l'Europe de la télévision et des télécommunications doit faire face.
Télécoms et Télévision européenne : Le point de basculement ?
Côté Télécoms, Yves Gassot, Directeur Général de l’IDATE, affirme : « Après avoir globalement réussi l'introduction d'une concurrence effective favorable au consommateur et dans une certaine mesure à l'innovation, l'Europe doit prendre en compte la situation inquiétante du secteur ».
Cela se traduit notamment par :
- une récession qui s'accompagne d'une pression sur les marges et l'investissement, à un moment où il faut accélérer les déploiements des réseaux fixes et mobiles à très haut débit et supporter l'explosion des trafics,
- un contexte peu favorable pour définir de nouveaux business models, lesquels sont pourtant indispensables pour répondre aux challenges lancés par des géants de l'Internet,
- une difficulté pour progresser vers un "single European market" tandis que s'accélère la consolidation aux Etats-Unis et que s'affirment des opérateurs de taille mondiale à partir des économies émergentes.
Côté audiovisuel, pour Gilles Fontaine, Directeur Général adjoint de l’IDATE, « ce serait une erreur de sous-estimer les points forts de l'industrie européenne ». En effet, la part de marché des chaînes de télévision et des distributeurs reste élevée alors que la production cinématographique est, dans une certaine mesure, le garant, d'une création autonome originale. Cependant, compte-tenu du poids des studios hollywoodiens, il serait illusoire de vouloir construire ex-nihilo un ou des champion(s) européen(s) des nouveaux services vidéo. La dissociation des droits « à la demande et linéaires » favorisera en effet les services nord-américains. Ce sont les raisons pour lesquelles il apparaît indispensable de favoriser une gestion des fenêtres, intégrée au sein des groupes de télévision dans un contexte où la SVOD est l’outil d’entrée des chaînes en clair sur le marché du péage.
Si les marchés de la télévision vont encore rester nationaux, une certaine internationalisation est cependant possible, voire indispensable. Pour cela, il faudra réviser le rôle respectif des chaînes et des producteurs dans la production de télévision (et non de cinéma). Par exemple, il faudrait également étudier la possibilité de lancer une chaîne jeunesse publique européenne disposant d'une base commune aux différents services publics européens.
DigiWorld Summit 2012 : Quelle place pour l'Europe au moment où l'émergence d'un nouvel ordre économique numérique mondial se met en place ?
Durant cette conférence, François Barrault, Président de l'IDATE, a présenté le programme du prochain DigiWorld Summit 2012. Ce sommet abordera le contexte mondial d'évolution des différents maillons de la chaîne du numérique avec des sessions plénières de haut niveau traitant des Smart Devices, des industries du contenu, des telcos et des plates-formes, des villes numériques,…
Le DigiWorld Summit est un rendez-vous incontournable qui permet de prendre la mesure des enjeux économiques et stratégiques pour les acteurs du secteur. Seront abordés des thèmes clés à travers une série de séminaires portant sur :
- Les Villes numériques
- Les contenus dans le Cloud
- Les réseaux de nouvelle grenaison (fixe et mobile)
- Big Data et protection des données personnelles
Le DigiWorld Summit est également l’occasion de mettre en avant le potentiel exceptionnel du territoire au cœur duquel cette conférence se tient depuis sa création :
- Les jeux vidéo seront à l’honneur durant une journée complète de conférences et de rencontres professionnelles organisées en partenariat avec le Montpellier in Game, événement que Montpellier Agglomération propose pour la troisième année consécutive.
- Les entreprises et start-up innovantes seront mises à avant à l’initiative de La Région Languedoc-Roussillon qui organise des rencontres B2B au travers du Networking by Sud de France Développement
Le DigiWorld Summit en bref
- Plus de 1400 participants attendus
- Plus de 130 intervenants
- Les présentations des analyses des consultants de l’IDATE
- Plus de 20 nationalités représentées
- Des sessions plénières de très haut niveau et 5 séminaires et conférences spécialisés
- Une sélection d'une trentaine d'exposants proposant des démonstrations et présentant leurs innovations
De très nombreuses occasions de networking durant une soirée d’ouverture à l'Opéra Comédie et une soirée de gala exceptionnelle sur le site d'IBM
> Découvrez le nouveau site internet du DigiWorld Summit 2012
Satellite M2M Market
Maxime BAUDRY
Head of Satellite Practice at DigiWorld IDATE
The global market is forecast to reach 2.3 billion EUR in 2016
IDATE just releases the first edition of its market report providing its readers with an analysis of the M2M market that is currently changing shape, assessing the key technologies to accelerate such a development of this promising market, along with an examination of the positioning of the top players, the key issues to be addressed and market forecasts up to 2015 by geographical area and by type of market.
M2M is a growing segment for the satellite industry, although satellite still has only a small share of the machine-to-machine market which is largely dominated by cellular systems: around 2% in terms of volume and 6% of revenue in 2011.
For most operators, M2M is still very much a niche market, but everything points to real growth potential for these applications.
“While it is sectors like fleet management and maritime security that have driven the sector’s development up to now, new markets have been emerging over the past several years, especially in the area of energy, but also in the homeland security/military arena.” insists Maxime BAUDRY, project manager of this study and IDATE’s head of the satellite practice.
Satellite M2M market growth/disruptive factors
There are several factors driving the growth of satellite M2M applications, starting with:
• Clear assets in terms of coverage: once classic and low-cost wireless solutions (chiefly GSM and 3G) are no longer available, satellite becomes the only possible solution for M2M applications. This is especially true of vast desert areas, and of oceans where demand for M2M solutions is high: for tracking fishing vessels, dangerous cargo, monitoring offshore wind farms, etc.
• Tremendous increase in applications requiring M2M. Examples here include smarts grids in the area of energy, tracking shipments – whether on land, sea or in the air – and for the military which are heavy users of M2M applications for tracking combat assets, in addition to having the means to pay for very high-end and so very expensive products.
• Complementary nature of terrestrial and satellite networks to deliver M2M links end-to-end. Manufacturers have been innovating over the past several years by rolling out hybrid equipment which is being used more and more by operators. Orbcomm was a pioneer in this field, and was then followed by players such as Iridium and Inmarsat.
• Stricter regulation. Recent developments in maritime regulation, notably the adoption of stricter regulations over monitoring commercial vessels, have been beneficial to satellite which is the only possible solution for this type of application outside of coastal areas.
Current satellite M2M market estimates
The satellite M2M market still represents only a small fraction of satellite services revenue. In the satellite M2M market came to 1.5 billion USD while the Satellite Industry Association (SIA) puts the entire satellite services market at an estimated 101 billion USD – giving M2M a 1.5% share of the market. IDATE estimates for 2011 indicate that this share will increase to 1.6%. The number of M2M modules in services stood at 1.3 million units in 2010.
The global satellite M2M market is forecast to reach 2.3 billion EUR in 2016. The highest rate of increase will be in the Asia-Pacific region thanks to developments in countries such as China, Indonesia, Vietnam and India.
Historical growth of satellite M2M market volume
(Millions modules)
Maxime BAUDRY
Project manager
m.baudry@idate.org
Visit our website for more information on this topic
Ultra-broadband via satellite in Europe & North Africa
Broadband satellite now a reality worldwide
IDATE has just released the 4th edition of Ultrabroadband via Satellite report. This benchmark report explores the latest developments in national broadband plans in the United States, Asia and Europe, and analyses the positioning of satellite solutions compared to other alternative technologies like 3.5G and LTE. It also provides an assessment of the opportunities attached to fixed access deployments for residential users in Europe and North Africa, and delivers strategic and figure-backed responses to the question of satellite’s role in the emerging race to deploy ultra-fast broadband.
“Most of the major countries of Europe, North America and Asia have adopted national plans for the large-scale rollout of ultra-fast broadband networks”, says Maxime Baudry, the head of project and Co-Head Satellite Practice at IDATE. “In most instances, however, the technological choices are geared towards deploying FTTx, combined with LTE. Only a handful of countries, including France and Australia view satellite as a credible alternative for delivering superfast services of around 50 Mbps downlink by 2015.”
Satellite needs to gain a foothold in the UFB market soon
Satellite technology appears to be operating at two speeds today: with the latest developments that will enable certain providers to deliver downlink speeds of up to 10 Mbps, it is theoretically in a position to compete with DSL in certain areas where DSL subscribers are too far from the DSLAM to have high-speed access, with bandwidth that is often below 2 Mbps.
On the ultra-fast broadband front, however, satellite is lagging behind: while large-scale rollouts of FTTx and LTE are expected between 2011 and 2020, delivering download speeds of 30-70 Mbps, the most advanced satellite developments make it possible to supply “only” 50 Mbps, and even then not before 2015 at the earliest.
Because of this sluggish pace, which needs to be set against the thriving momentum in the terrestrial telecom market, ultra-fast broadband via satellite runs the risk of not becoming available until LTE is already widely deployed across the various markets (in particular thanks to infrastructure-sharing schemes) which means it will already have lost a sizeable number of potential subscribers.
Satellite broadband market expected to grow by 34% annually between now and 2015
Between 2010 and 2015, IDATE predicts that the number of broadband satellite customers in the Europe/North Africa region will increase by an annual rate of 34%, to reach a total 800,000 subscribers by 2015, compared to close to 123,000 at the end of 2010. The biggest progress will be seen in North Africa which, unlike Europe, does not have a robust fixed or mobile infrastructure. IDATE therefore estimates that the growth potential for a broadband satellite offer in this region is very strong, provided that price points are tailored to the economic realities in the different countries. The future success of a service in this region will also depend on how it positions itself with respect to competing wireless/cellular technologies which are enjoying a very healthy momentum today.
Maxime BAUDRY
Head of Project, Co-Head Satellite Practice
If you want more information, please visit our website.
Satellite TV
Will the future of satellite be guided by 3D?
IDATE has just published its new report “Satellite TV”. This report looks at the latest developments and major trends in television markets, as much in terms of satellite’s prominence as a broadcasting mode in national TV markets, as the strategies employed by the broadcast networks and pay-TV services, especially with respect to their 3D offers, and provides an analysis of how this affects the satellite industry.
“Satellite is the best-placed network for broadcasting the widest selection of HD and 3D content over a vast geographical territory, with optimum picture quality. Although HD content, and gradually 3D content too, is available on all TV broadcasting networks, the conditions are not the same in each case (impact of operator’s choice of encoding, in particular), and this directly affects the picture quality” explain Stéphanie VILLARET, Project Manager, Co-Head Satellite Practice.
Growing demand for satellite capacity for TV broadcasting
In spite of a slowdown in the number of new TV channels in standard quality, and even considering advances in the compression and broadcast standards used (the DVB-S2/MPEG-4 combination still mainly used to broadcast HD channels), the spread of HD delivery should help sustain growth in the satellite TV broadcasting market for many years to come, both in North America and Western Europe. HDTV is still the chief growth outlet for satellite operators in the TV market.
TV homes are becoming better and better equipped to receive and record in high definition. The United Kingdom has the highest take-up of HDTV sets (almost all TVs sold in the country are now "HD ready"): 59% of homes are equipped with a compatible set compared with 57% in the United States, 46% in France and 39% in Germany.
HDTV take-up in Western Europe is a little behind the United States, although development of the market in North America did start a few years earlier (early 2000 in the United States, 2005 in Western Europe).
Number of HDTV households by platform and country, end-2009
Emergence of 3DTV
Initially spurred on by video games and movie theaters, 3D is now besieging the TV market. 2010 was punctuated by numerous announcements of 3D channel launches, many featuring special one-off events and VoD services, and a few broadcasting non-stop.
The number of 3D channels available on satellite is still limited and the catalogue of 3D programs still lacking. All of the 3D VoD services launched by operators on the various networks ultimately offer much the same content. The scarcity of 3D programs offers little in the way of exclusivity contracts and there are few opportunities for differentiating the various solutions on the market. If the number of non-stop 3D channels and 3D VoD services were to continue to grow in the future, lDATE estimates that in 2015, the 3D service would take up around ten frequency channels on each of the leading DTH premium platforms, such as CanalSat in France, Sky in the United Kingdom and ones in the United States. By 2015, around twenty 3D satellite channels should be available in North America and thirty or so in Western Europe.
Growing number of 3D satellite channels in Western Europe and North America, 2010-2015
Project Manager
Stépahanie VILLARET
Please also visit our website.
Satellite markets
Mid-term growth outlets
IDATE has just released its “Satellite Markets” report. This report analyses the key satellite markets, both civilian and military, and allows readers to gain real insight on future market opportunities and the outstanding medium-term issues for satellite market players. It also pinpoints the central challenges that satellite operators are having to contend with – hybridization with terrestrial networks being undoubtedly the main one – and the assets they have to forge a solid foothold in the various future markets.
“Considering the main satellite services being examined in this report, IDATE believes that video broadcasting services in emerging countries, as well as high definition and 3D TV – despite lingering uncertainties over the standard itself, the price of equipment and whether users will embrace it – all have the greatest medium-term market potential for satellite operators, in all corners of the globe combined”, comments Maxime Baudry, project manager and senior consultant at IDATE. “We also expect to see strong growth in the military segment and in the areas of telecommunications and imaging. Broadband access is another field of opportunity, albeit to varying degrees depending on the region, offering moderate prospects in Europe and North America but very healthy ones in Africa and the Middle East.”
New Growth outlets emerging
• The digital TV broadcasting market continues to develop, and regions such as Asia and Africa/the Middle East offer sizeable growth potential. But it is HDTV and 3D that represent an especially important source of growth for satellite operators. Their inherent assets of coverage, network capacity and their ties with premium pay-TV services are still substantial ones when it comes to distribution. HDTV offers in particular are expected to spur a rise in demand for satellite broadcasting capacity: an expansion of existing offers and the launch of new channels and even new packages. HDTV is also expected to become the new TV broadcasting standard. However, upcoming technical transitions (spread of MPEG-4, rollout of DVB-S2 which will mean a roughly 30% gain in capacity on each transponder) along with the relatively slow take-off of 3D could well mean that this rise in demand for satellite capacity will take place only gradually.
• The two-way Internet access market is another significant source of growth, but to different degrees depending on the region. While potential is rather limited in industrialised parts of the world, such as Europe and North America, especially because of competition from terrestrial and government policies that clearly favour mobile terrestrial networks, Africa and the Middle East do appear to be fertile ground for a satellite-based solution because of the high proportion of rural dwellers there and the lack of suitable telecommunications infrastructure.
• The military market has been growing since the start of the war in Afghanistan in 2001. Occupying 80% of American commercial satellites’ capacity, the US government is the biggest user of civilian payload and, even though it is building satellites for its own use, they will not be able to satisfy all of the military’s needs. This huge increase in demand is due mainly to the growing use of drones that are piloted via satellite, and whose role is expanding from reconnaissance into combat missions. This trend is also underway in Europe with the current development of several combat drone programmes, although the situation is different in that European armed forces relay mainly on dedicated military satellite capacity.
• One last major source of growth for the satellite industry is Earth observation. There are two distinct clienteles for this market: the military which accounts for around 70% of demand for satellite images, particularly for gathering intelligence on warzones (surveillance of nuclear installations, terrorist camps, etc.); the other major segment being the one driven by the Internet giants who acquire massive quantities of high resolution images for their online mapping services, such as Google Maps and Microsoft Virtual Earth. This market does appear to be tapering off slightly, however.
• There are also niche markets that offer room for growth, even if they represent less than 10% of the satellite capacity used around the globe. Of particular note is M2M (machine-to-machine solutions) via satellite in desert/maritime regions, along with maritime and aeronautical telecom solutions which, by definition, rely on satellite. For MSS operators, the in-flight communications market is a small one, but if it brings in money for airline companies and finds a big enough user base, it could become a lucrative niche market in the same way maritime telecommunications have.
Project Manager
Maxime BAUDRY
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