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Is satellite's saviour 5G mobile? 

Legacy satellite operators face a tough time presently as video revenues recede and data revenues fail to grow fast enough to replace the losses. But with a bit of patience, satellite operators have the potential to enter a whole new golden era courtesy of a left-field source: 5G mobile.

That was the major take-out from the first day of the Australasia Satellite Forum, held yesterday in Sydney and organised by Talk Satellite and CommsDay.

The CEO of Speedcast, Pierre-Jean (“PJ”) Beylier, set the scene in his keynote when he said he wanted his company to be seen as a “managed information provider.” In his view the business is no longer about dumb, fat pipes in the sky but the processing and analysis of data in a format adapted to the customer. The United States Defence Force was cited as Speedcast’s model client relationship in this regard.

The legacy business – video broadcast – is still important but receding fast. SES executive Imran Malik saw video revenues declining by 5-6% a year while New Sky Research analyst Jose Del Rosiaro estimates that industry video revenues will decline 29% between 2017 and 2020.

And while data and mobility – the all embracing term that covers satellite connectivity to ships, planes and trains – are increasingly important parts of the revenue mix, 5G is seen as providing a true inflection point for the sector over the coming years.

And this is for the most fundamental of reasons: 5G is essentially about pushing content out as far to the edge, in order to achieve those target latency rates. Intelsat executive Terry Bleakley believes satellite, with its ability to cover large areas with one signal, could play a big role in serving the most popular content to caches maintained in servers at cellular towers, avoiding the huge expense in fibre backhaul.

Similar opportunities are seen for the internet of things. Bleakley described a scenario where Toyota might want to broadcast a firmware update to ten million connected cars. What would be the most efficient way to do that? Satellite or cellular? Ditto in the avionics world where the provision of genuine broadband to the cockpit could save billions in avoided costs through such processes as more efficient flying routes based on real-time weather data and the identification of parts in need of replacement before they fail and ground the plane.

Indeed, Blaine Curcio of Orbital Gateway Consulting thinks that satellite teleports could well play the same integral role in cloud infrastructure as data centres located in cities or at submarine cable landing points play now. He suggests that with Amazon – which operates the world’s largest web services company – planning to launch its own satellite network, this scenario is set to become an eventuality.

However, the subsequent panel session – on the Pacific Islands – was a reminder that for some, satellite was purely the difference between being online or not at all. This panel, featuring the Samoan telecom regulator and telco executives from various Pacific nations, was surprisingly lukewarm about the recent landing of submarine cables throughout the region. According to Justin Kaitapu, GM/CTO of EziNET in Tonga, the landing of a cable in his country hasn’t made that much of a difference because it is still a challenge to distribute its bandwidth out to the 36 inhabited islands that make up the kingdom. For Ezinet, 90% of its traffic is still carried by satellite.

Antony Ferris, CEO, Satsol added the point that submarine cables were a lousy way to buy bandwidth in thin markets such as the Solomon Islands. “The economics don’t stack up as the cable provider wants us to write out a big fat ten-year cheque. We don’t sign up to long term deals and satellite gives us that flexibility.”

Consultant Maui Sanford made the rather startling observation that Pacific Island cables were no more than 1% utilised some ten years into their typically 25 year operational life.

Former Australian telecom regulator Bob Horton made an optimistic rejoinder that plans for global satellite fleets such as Space-X, Telesat, OneWeb and Amazon could have a great spin-off effect for the islands: they will automatically be in the footprints and be served at an effective marginal cost.

The big question though is whether these proposed fleets will ever manifest. NSR’s Del Rosario used his ASF presentation to run an effective SWOT analysis of the leading six. He rates OneWeb as being slightly ahead on the road to market compared to Space X, Leosat, Telesat and Amazon and calculates, astonishingly, that they have a combined capex requirement of just US$15 billion (this is for 18,000 satellites!)

Given the global reach of these networks and the fact that Australia is central to a significant percentage of the Southern Hemisphere’s land area, this development should prove a bonanza in terms of Australian industry investment. And so it is proving so, with the Australian Space Agency’s Dr Megan Clark already identifying some A$1.3 billion of investment in the sector pipeline. Ground station infrastructure is proving to be a significant part of that, although there is also an emerging launch sector. Clark outlined a long list of eclectic developments under the way, including research into the 3D printing of rocket engines!

Fears that the development of an Australian Space Agency constituted too little, too late appear to be misguided. David Williams, Group Executive, CSIRO believes that the lack of encumbrance from legacy attitudes could even prove to be a competitive advantage for the Australian space sector. – Grahame Lynch