GEO and Non-GEO High Throughput Satellites (HTS) to Propel Satellite Backhaul

April 16, 2015

NSR's newly released Wireless Backhaul via Satellite, 9^th Edition finds a robust market increasingly impacted by the much deliberated Non-GEO-HTS programs, specifically LEO-HTS presenting both challenges and opportunities for the industry.  A diverse set of market segments are expected to grow at mixed levels, with current and next-generation solutions generating healthy revenue streams from $1.7 billion in 2014 to $5.3 billion by 2024.
 
Various service offerings have and will target all market segments, posing risks and rewards:

• Traditional FSS capacity in C-band and Ku-band has been the most prevalent solution used thus far for backhaul and trunking in land areas and has begun to address the need for 3G services. It has likewise made a compelling business case for Mobility Platforms in the Maritime and Aeronautical sectors, serving the needs of high-paying passengers for the provision of Wi-Fi services.

• GEO-HTS capacity is making a big push on land, air and sea where a clear migration in the Fixed Land Towers backhaul and Trunking markets is underway.  Less expensive and higher throughput capacity is challenging the economics of Traditional FSS where erosion of the revenue base is leading to an “HTS play” by operators that own Traditional FSS transponders.

• Finally, Non-GEO-HTS, which is in its infancy, promises better latency and here, O3b is making inroads in Backhaul, Trunking and Mobility Platforms. LEO-HTS is still in the planning stages. Few details on LEO-HTS programs have been released, but if one or two programs are launched, total capacity will increase many-fold that at a minimum will lead to price pressure for all offerings.

 
The LEO-HTS entrance, especially when backed by heavyweights such as Google, SpaceX, Qualcomm, Virgin and others, has captured the imagination of the industry leading to a mixed reaction of excitement on one hand and a bit of confusion on the other.  With so many LEO satellites and so much capacity proposed, many questions have arisen on program viability in terms of both launching the systems and gaining positive ROI if the systems do launch.
 
In satellite backhaul, the touted game change will come in the form of cheaper capacity, which LEO-HTS programs can certainly address. “However non-GEO HTS equipment pricing, specifically antenna systems, will have to come down dramatically compared to current O3b pricing in order to address CAPEX considerations," according to the study’s author Jose Del Rosario, Research Director for NSR. “More importantly, although backhaul is a large and growing market, other applications will have to be targeted by LEO-HTS systems as the market opportunity is relatively limited given that all systems will target this market space. Incumbents will surely respond to the LEO-HTS threat in terms of lowering their own pricing such that the LEO-HTS impact until 2024 will likely be limited.”