By Warren Ferster
Prevailing trends in satellite telecommunications have brought the industry to a crossroads. The successful navigation of which will depend on what happens with ground operations, as much as in space. Bandwidth prices have dropped sharply amid a capacity glut magnified by decreasing demand from television broadcasters — a longtime anchor customer for satellite operators. These developments have shaken some of the luster from an industry that, just a few short years ago, was awash in profits.
According to experts gathered at the 2018 Kratos Global Users Conference, the industry must adapt (in part by cutting infrastructure costs in space and on the ground) to succeed in the years ahead. To thrive, it must find a way to integrate satellites more closely with — and in the process, grab a larger share of — the broader telecommunications business.
“This is a moment that is called a singularity,” Thierry Guillemin, former executive vice president and chief technical officer at Intelsat, said in a keynote address at the conference. “That means it’s a moment where there is no way to predict what will happen next.”
Bandwidth price erosion is expected as High Throughput Satellites (HTS) in Geostationary Orbit (GEO) are joined by large constellations in lower orbits, said Guillemin, now president of the New Space Directions consultancy. He said that each orbit offers unique advantages, noting that GEO satellites, (which hold fixed positions 36,000 kilometers above the equator) can cover large areas economically and quickly, but suffer from latency that can disrupt certain applications. Constellations in lower orbits have far less latency, but require many satellites to achieve global coverage.
Another trend on the space side is the commoditization of satellite hardware, a notable example being the push by SES for standardized, software-defined satellites that can be rapidly reconfigured on orbit depending on market demand. Standardization will enable manufacturers to crank out satellites assembly-line style, lowering costs through economies of scale. Guillemin raised the possibility of operators being able to buy satellites off the shelf, whereas now they are made to order in a process that typically takes two years or longer.
“It’s beginning to make the satellite less important,” Phil Carrai, president of Kratos Technology and Training Division, said of the forces now shaping the industry. “If you have that much capacity and the satellites are reconfigurable then the real activity must be in the network; if you’re going to differentiate versus the competition it’s got to be on the ground side.”