Broadband satellites taking last mile to the next dimension

It's the ultimate in last-mile connections. You can't see it, and you can't install it in the traditional sense. Yet, according to a recent study by Frost & Sullivan Inc.

It's the ultimate in last-mile connections. You can't see it, and you can't install it in the traditional sense. Yet, according to a recent study by Frost & Sullivan Inc. (Mountain View, CA-www.frost.com), broadband satellite services are increasingly becoming a serious option for service providers wanting to deliver the total communications package with minimal bottlenecks.

Backbone connectivity alternatives, demand for high-speed local access, and Internet data broadcasting are combining to brighten the potential for this still young yet out-of-this-world telecommunications solution. "As Internet traffic growth outpaced the build-out rate of fiber capacity, it created the opportunity for satellite networks to help meet some of the excess demand for backbone capacity," says the Frost & Sullivan report, "Intro-duction to Broadband Satellite Services." "But the use of satellite capacity is likely to increase in the future because satellite-based broadband solutions are at once cost-effective, flexible, and easily scalable."

Analysts say satellite systems have a bright future because they support asymmetrical data flow, are typically activated faster than other broadband solutions, create more economical bandwidth-on-demand services, and can quickly extend network infrastructures so service can be provided across a large area via a single satellite.

Frost & Sullivan estimates that Internet-specific satellite transponder lease revenues will soar from $198.6 million last year to $601 million by next year and $8.5 billion by 2006. "The launch of next-generation broadband satellite systems around 2002 are expected to usher in a golden age for the satellite industry," the report predicts. "These systems, some operating in the very-high-frequency Ka-band, are planning to enhance broadcasting, Internet, and business communications services by using high-power spot beams to provide price-competitive, two-way digital communications."

While broadband satellite technology is both viable and an effective means to keep pace with next-generation telecommunication demands, the reality is that the market is still in its infancy, and with many financial, educational, and regulatory hurdles to overcome in the short-term. Among the leading challenges cited in the report are the need for project financing and lack of financial resources in developing countries; consumer awareness and little "brand" recognition; and regulatory issues that can increase cost and delay service offerings.

As for the long-term success of broadband satellite services, Frost & Sullivan analysts say it will all "depend on the ability to be price-competitive with terrestrial solutions, the popularity of bandwidth-intensive applications that stimulate users everywhere to have high-bandwidth links, and the ability of satellite operators and providers to market their services in conjunction with content and service-provider partners."
-Steve Smith

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