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bigblu well positioned to benefit from disruptive changes to the satellite model

As humanity’s insatiable appetite for streaming continues unabated, investors across the world are backing a new wave of satellites being built that will transform the global broadband landscape.

Billions of pounds are being invested in numerous different satellite projects addressing different demands, continents and markets with a view to delivering a ‘fibre like’ service from the sky for consumers and businesses, but also for boats, trains, planes and cars.

Substantial cost reductions in the building and launch processes means the satellite economics of the next generation of satellites, the net cost of moving each bit of data across the network over the satellite, are improving very significantly. These cost improvements are being invested back into the product meaning for the first time satellite broadband will be able to deliver a proposition that can exceed the consumer’s ever increasing expectations.

In the last 10 years consumer satellite broadband speeds in Europe have risen 10 fold from 4 Mbps in 2008 to their current 50 Mb (4G services) speeds, but in the next year we will see an exponential jump to 100 Mb speeds (5G services) with a further jump to 200 Mb and 300 Mb and more in 2021/2022. The launch of 50 Mb consumer services in the last year has generated a big upswing in demand for satellite broadband.

Data allowances, traditionally a perceived limitation on satellite broadband, will also see a complete ‘reboot’ of the business model moving to ‘fully unlimited’ from the ‘almost unlimited’ we see in the market now.

New launches from Eutelsat (in 2019 and 2021), Viasat (in 2021) and SES (now) which are fully funded with an eye on mobility (aviation and shipping) and ‘in build’ mean an abundance of supply of new, cheaper capacity and pretty much ubiquitous coverage. Technology platforms and spacecraft that support these higher speeds (like Viasat 2 over America) are already proven and in service in other parts of the world, we’re just waiting for the satellite’s to be finished and launched in our European and Australian markets to benefit from these significant changes in performance.

As the cost of ‘civils’, a key component in the overall investment of digging and laying fibre, continue to spiral upwards and most countries fibre roll out plans near completion, the reality is that in many developed countries its clear who the ‘have’ and the ‘have nots’ of real fibre to the home will be. And with satellite now on the front foot with a really engaging product set, those that haven’t got access to fibre will see a real alternative in satellite broadband.

With satellite being so well suited to the heavy lifting of streaming, proven by satellite supporting thousands of satellite TV channels across the globe, the dynamic new products arriving in the satellite space will be hard to ignore for consumers and businesses held back by slow ADSL and in fibre to the cabinet areas.

Satellite owners have traditionally steered clear of dealing with the end customer. They are capex heavy investment vehicles specialising in designing, financing and launching satellites. A very different set of challenges and indeed commercial environment to the rigours of dealing with the public and delivering a consumer and business broadband service with all the complexities and expectations that brings.

So, bigblu as the largest satellite broadband service provider outside north America, is very well placed to capitalise on these disruptive improvements in satellite economics. Satellite operators need service providers to be the ‘meat in the sandwich’ between the satellite and the end user providing all the customer facing aspects of the service.

Recent changes in the business model between bigblu and the satellite owners mean a much larger investment from them in the costs of finding and bringing the customer online, meaning its easier and cheaper to find customers and connect them. Satellite owners now subsidise the customer equipment and installation, traditionally barriers to entry.

With Cisco forecasting global IP traffic to increase threefold over the next 5 years, and money to expand the real fibre networks all but dried up, the future looks exciting for bigblu. Cisco state that IP traffic will grow at a Compound Annual Growth Rate (CAGR) of 26 percent from 2017 to 2022. Monthly IP traffic will reach 50 GB per capita by 2022, up from 16 GB per capita in 2017. Globally, IP video and streaming traffic will be 82 percent of all IP traffic (both business and consumer) by 2022, up from 75 percent in 2017. Consumer video-on-demand traffic will double between now and 2022*. All this growth in demand will put further pressure on poor wired broadband services who area already struggling with demand, pressure bigblu will be happy to relieve with the next generation of satellite based services.

Bigblu has signed strategic partnerships with both Eutelsat and Viasat in the last year to be just that, the service provider who looks after the customer as these satellite models evolve. As new services go live the dynamic new product sets will look to take market share from other technologies as people become more and more disenchanted with the wired broadband alternatives available including fibre to the cabinet.

With ecommerce and multi-lingual teams at its HQ, its cloud based multi-lingual, and multi-currency customer service platform and ERP, bigblu can operate in multiple markets very cost effectively often without boots on the ground apart from sub-contract installers. Acquisitions of key competitors in Germany and Italy last year and a further 18 companies in the previous 3.5 years mean that the business is very well positioned to be the dominant cross border alternative broadband provider globally.