The recent saga of American airlines flip-flopping between GoGo and ViaSat over IFC services is a reflection of the dilemma facing airlines. As satellite operators continue to offer lucrative, often discounted HTS capacity deals to service providers in both Ka- and Ku-band, the airlines now have one more variable to trade-off as they ponder their IFC business model– which frequency band to choose? 

NSR’s recently released report Aeronautical Satcom Markets, 4^th Edition found that even if GEO-HTS Ka-band market will grow strongly, the availability of backward-compatible GEO HTS Ku-band capacity will offer a compelling value proposition and thus push IFC demand via Ku-band over Ka-band in the long run. Economics, quality of the IFC service, and reliability are the three most important parameters that NSR believes would drive the decision-making process for airlines.   

Economics – The cost/bit of GEO HTS Ka-band is suggested to be cheaper than GEO HTS Ku-band, due to the higher frequency and via its reuse factor. This theoretically enables greater availability of bandwidth using Ka-band spectrum and spot beam architecture, driving proponents of Ka-band systems to conclude it is cheaper than Ku-band systems. The scale factor comes into play then, where service providers point to more subscribers thanks to the lower cost. However, the CAPEX of GEO HTS Ka-band satellites is higher than their Ku-band counterpart, and NSR believes that after accounting for teleport charges and VSAT cost (which is more than just antenna cost), the economic advantages of GEO-HTS Ka-band over GEO HTS Ku-band are likely overstated.

Quality of Service (QoS)– There is a popular saying that ‘no Internet is better than slow Internet’. GEO HTS Ka-band based services, introduced by ViaSat, changed the IFC game by delivering loads of bandwidth to users. A few ways GEO HTS Ku-band based services can deliver equivalent performance are by increasing the size of the antenna, increasing the signal power or optimizing the channel noise. The success of GoGo’s 2Ku service shows the market continuing acceptance of Ku-band based IFC, despite the availability of Ka-band capacity. Such market behavior contradicts the rumors about Ku-band systems not being able to provide the same QoS as Ka-band HTS systems. Improvements in antenna technology have benefited the Ku-band based IFC service providers to bridge the gap in performance, and there is only one way we see this trend going – forward.

Reliability – The Ku-band world is more secure due to large numbers of backup options. NSR’s research shows that IFC service providers have landed more deals in Ku-band (both FSS & GEO HTS), with GEO HTS Ka-band deals being mostly held by a vertically integrated ViaSat and the oft-delayed Inmarsat’s GX Aviation. Also, the fact that options for Ka-band aeronautical connectivity antennas are few and more recent (like GEE’s partnership with QEST) adds to the belief the Ku-band ecosystem will continue to be seen as more reliable from a service point-of-view. The table below shows a relative comparison of GEO HTS capacity procured by service providers in both frequency bands. The two biggest players with 75% of global market share – GoGo and Panasonic, have shown faith in Ku-band HTS capacity, which points to a leading position of Ku-band in the IFC race in the long run.

Thus, as established in a previous NSR article, the demand for Ku-band systems (mostly HTS) in IFC will continue to increase amidst the falling capacity prices in the mobility market. Indeed, NSR estimates the total capacity demand for GEO HTS Ku-band to reach 20 Gbps by 2025, supplemented by demand for close to 130 transponders of FSS Ku-band capacity.

With over 2,300 Ku-band aero units currently in service, a ‘toggle’ between Ku-band FSS capacity and spot beam HTS will have far more ‘pull’ and be preferable than switching to a different frequency band, which is a considerable cost due on the VSAT side and requires a completely different ROI strategy from airlines.

Bottom Line

The noise about frequency bands in the IFC market is reminiscent of the times when Ku-band based VSATs were introduced and many predicted the death of C-band VSATs. Well, C-band VSAT markets are growing because they have a well-defined use case, and NSR expects Ku-band to be still around in the IFC market despite the competition with higher throughput Ka-band HTS systems, albeit in a bigger way than C-band in the VSAT market, in large part thanks to HTS spot beam architecture.

Unlike what most articles and other analysis would lead us to believe, the competition between Ku- and Ka-band HTS systems is not so straightforward, with airlines weighing their options that extend beyond user bandwidth availability. As scores are settled on this matter, what is the next debate in the IFC industry – a ‘battle of orbits’? With non-GEO HTS systems offering low latency bandwidth services, can we conclusively say that they will better than GEO HTS based services in the IFC market? Perhaps not, but that is a discussion for another day…