NSR Webinar- Wireless Backhaul & Video Offload via ... · PDF fileOffload via Satellite: The Battleground between FSS and HTS ... 3G and 4G/LTE services on over 1 ... Comtech and Supernet

www.nsr.com © 2014 – NSR

June 16, 2014

Wireless Backhaul & Video Offload via Satellite: The Battleground between FSS and HTS

Christopher Baugh, President

Jose Del Rosario, Research Director

NSR Webinar


Webinar Agenda

2www.nsr.com © 2014 - NSR

June 16, 2014

Wireless Backhaul and Video Offload via Satellite: The Battleground between FSS and HTS

IntroAbout NSR & “Wireless Backhaul, Trunking & Video Offload via Satellite

1 The Playing Field

2 Wireless Backhaul- Land-based Towers

3 Wireless Backhaul- Mobility Platforms

4 Video Offload- The “Wildcard”

5 Bottom Line



NSR is a Global Leader in Satellite Market Research and ConsultingFounded in 2000, NSR specializes in analysis of growth

opportunities across the satellite industry

NSR’s expert consultants are located globally and possess over 125 years of combined industry

experience.

Multi-Client Reports on Various Satellite Topics

Extensive Client Research, Consulting and Advisory Services

“Holistic” approach to research enables NSR to anticipate trends with a higher degree of confidence and precision than the competition and stay ahead of the curve.

–www.nsr.com

June 16, 2014Wireless Backhaul & Video Offload via Satellite: The Battleground between FSS and HTS

3

About NSRWireless Backhaul and Video Offload via Satellite: The Battleground between FSS and HTS

www.nsr.com © 2014 - NSR


NSR features the most global presence of any satellite consulting/research company. With on the ground regional experience in established and emerging markets, NSR’s multi-cultural and multi-lingual team provides industry-leading telecom market research and consulting delivering unique, actionable intelligence.

June 16, 2014


Global in Reach, Local in Knowledge




June 16, 2014

Markets We CoverWireless Backhaul and Video Offload via Satellite: The Battleground between FSS and HTS

NSR’s Complete Global Satellite Coverage

COMPLETE satellite

coverage & analysis

“Ahead of the Curve” Analysis &

Products/ Coverage

Presence in 9

countries &

4+ regions

125+ Years of Satellite Industry

Experience

Satellite Communications

Broadcast & Digital Media

Hybrid & Emerging

Applications

Commercial Space

Markets We Cover




About NSR & Satellite Manufacturing & Launch Services Coverage

NSR’s Wireless Backhaul, Trunking & Video Offload via Satellite, 8th Edition



Examines the market potential and viability of:• Four inter-related yet distinct market segments• Product and service roadmaps • Provisioning next-generation services, specifically

3G/4G and video offload services.

Tool for assessing risks and strategies / evaluation of market fit / scrutiny of the value proposition


The Playing Field

Requirements Today and Tomorrow


The Playing Field

The Opportunities

Brownfield and Greenfield Markets

Video Offload is a “wildcard” – The Greenest of the Greenfield Market

NSR is cautiously optimistic

Backhaul on Mobility Platforms provide high growth opportunities –

Greenfield and “real” market opportunity

Wireless Backhaul on Land-based Towers need better cost structures to justify ROI –

Brownfield Market

8





The Playing Field

9

Application Targets & Market Size

�Fixed Land-based Towers Backhaul will see cost and technology advantages with HTS

�Video Offload via Satellite is still not on the radar of service providers, but testing is taking place

�Most interesting battleground will be Mobility Backhaul, where HTS and Traditional FSS will compete directly


Market Opportunities

Video Offload

Mobility/ Aero

Backhaul

Mobility/ Land

BackhaulMobility/ Maritime Backhaul

Fixed Land-based Towers Backhaul

June 16, 2014





The Players – Traditional FSS

10

�C-band fill rates expected to decline with additional supply.

�Ku-band fill rates relatively steady despite supply gains.

�Supply can change up or down depending on operator plans for both frequencies such that fill rates could change as well.





The Players - HTS

11

�Forecasts due to increasing program announcements are constantly being re-adjusted upwards.

�Commoditization of capacity?

�Potential over-supply of HTS will be a key trend affecting strategic positioning in targeting various market segments


0

500

1,000

1,500

2,000

2,500

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Gbps

Global HTS Supply Comparison

GASSD 10 Supply GASSD 9 Supply

Nearly 400 Gbps

Increase!

June 16, 2014

And then there’s Google and Facebook…




The Players- Google and Facebook

12

�Satellites, balloons and perhaps drones through the purchase of Titan to expand Internet access into remote areas in a project that could cost over $3 billion.

�Purchase 180 small, high-capacity satellites or HTS in LEO.

�O3b’s satellites weigh about 680 kilograms, but Google plans to use satellites that weigh about 110 kg, according to the Wall Street Journal.

�Led by Greg Wyler, founder of the Google-backed satellite communications start-up O3b Networks (the Other 3 Billion).


June 16, 2014

�FSO or “free space optical communication”

�Drones flying at 65,000 feet and powered by solar panels, broadcasting a powerful communications signal that covers an area the size of a city with a medium population density.

� In large areas with low population densities, Facebook may launch satellites as a cheaper alternative to drones deployed either in LEO or GEO.




The Players

13

�Will target Wireless Backhaul – Land-based Towers and likely affect price offerings downwards

�Should both target Wireless Backhaul – Mobility Platforms and NSR believes they will have to in order to expand revenue sources, price competition will increase.

�Will likely target Video Offload and impact that segment positively in terms of technical solutions and market penetration.

�Will likely affect FSS and HTS pricing

Bottom Line: A supply shock leading to increased competition and decreasing capacity prices.


June 16, 2014

Google and Facebook Impact Potential



The Playing Field Today

Mobile data has exploded over the

last 4 years !

14



Source: Ericsson

June 16, 2014

Form Factors – Smartphones, Tablets, Laptops – need higher bandwidth



The Playing Field Tomorrow

• Growth to continue in subscriptions

• Growth will continue for mobile broadband subscriptions

15



Source: Ericsson



Wireless Backhaul – Land-based

TowersIs there a clear winner between FSS and HTS?



What has happened over the past 12 months?

17

June 16, 2014


Date Announcement Details

June 19, 2013Gilat and THAICOM announced the signing of a Cooperation Framework Agreement where the companies will provide customers with an integrated solution using Gilat’s satellite ground equipment in conjunction with THAICOM-4 (IPSTAR)

June 20, 2013SES announced a multi-year multi-million dollar contract renewal with Supernet for C-band capacity on the SES NSS-12 for providing GSM backhaul services to Pakistan's leading mobile operators.

Aug. 7, 2013Comtech announced $1.7 million in orders from a mobile network operator in Latin America. Will utilize the equipment to extend existing 2G, 2.5G and 3G networks and to enable 3G HSPA mobile broadband into rural and remote areas.

Aug. 29, 2013Intelsat and Japan-based SoftBank Mobile Corp. announced the successful trial of a cost-effective, rural 3G mobile phone service in Kenya. Intelsat supported the demonstration through capacity on the Intelsat 10 satellite and via the company’s teleport in Fuchsstadt, Germany.

Sept. 10, 2013Comtech awarded $1.3 million in additional orders for satellite communications infrastructure equipment from a mobile network operator in Southeast Asia. The orders included multiple satellite modem backhaul platforms and RF products.

Dec. 12, 2013Cobham SATCOM and Comtech have started a strategic partnership that will include the integration and productisation of Comtech EF Data's RF products across a range of Cobham SATCOM maritime antenna systems.

Feb. 25, 2014Comtech received a purchasing agreement from Harris/CapRock. The first $5.4 million equipment order as part of the purchasing agreement was received by Comtech EF Data during Comtech's quarter ended January 31, 2014.

March 6, 2014Working with Intelsat, Comtech announced the ability to enable 2G, 2.5G, 3G and 4G/LTE services on over 1.5 GHz of capacity into South America.

March 11, 2014Comtech and Supernet announced the migration of 2G TDM satellite backhaul network to an all IP optimized backhaul solution to support current 2G/2.5G and future 3G operations of a Mobile Network Operator in Pakistan.

March 11, 2014Comtech announced that Nawras, which provides both fixed and mobile telecommunications services in the Sultanate of Oman, will upgrade to iDirect Evolution. The platform upgrade will play a key role helping Nawras deliver new VSAT services, such as enterprise connectivity, SCADA and mobility.

April 9, 2014 Comtech awarded a $1.4 million order to supply a mobile network operator in Latin America for network expansion.

May 29, 2014 Smart, the East African mobile operator, appointed Avanti Communications to deliver IP backhaul services. Owned by the Aga Khan Fund for Economic Development, Smart will deploy the service in Burundi, Tanzania and Uganda.



The Shifting Playing Field

2G and 2.5G will be a very small minority in terms of subscriptions

The market is moving to 3G and 4G

18



Source: Ericsson



Address a Shifting Playing Field

• In-service units to grow at steady levels in the aggregate

• Traditional FSS to decline

• MEO-HTS and Widebeam Ka-band to grow at steady levels

• Largest growth foreseen in GEO-HTS

19



Market shift from Traditional FSS to GEO-HTS




• Usage of Traditional FSS capacity to decline

• Widebeam Ka-band to grow at steady levels

• Largest growth foreseen in GEO-HTS and MEO-HTS

20



Market shift from Traditional FSS to GEO-HTS and MEO-HTS




• Traditional FSS average to remain at the same level

• GEO-HTS to increase

• Largest allocation foreseen in MEO-HTS

Notes:

• These are averages

• Actual traffic during

peak and non-peak usage hours vary

• Bandwidth

management also leads to variations in

allocation

21






• BTS move to 3G/4G platforms

• On 3G/4G, GEO-HTS forecasted to dominate the installed base

• MEO-HTS is lower: however, bandwidth allocation per site is higher

22





Regional Trends

North America and Asia are

the two leading

markets where the market

shift is taking place

23



Source: Ericsson



Regional Trends

• North America is heavily wired and terrestrial microwave is heavily deployed

• Asia dominates currently and should continue over the long term

24





Revenues

Revenues

• Current market is dominated by Traditional FSS

• HTS via iPSTAR has begun to penetrate the market

• Over the long term, NSR projects shift from FSS to HTS

25






Service Pricing

26

June 16, 2014


Space Segment Pricing (Annual) – Fixed Land-based Towers

• Stable space segment pricing with nominal price reductions for FSS

• Most pronounced price decrease in GEO-HTS due to increase in capacity deployment

• Prices may decline further with added capacity launched



Bottom Line� HTS should be the clear market winner given it’s a better fit in addressing tomorrow’s

Playing field.

� The shift from Traditional FSS to HTS will be gradual or even slow.

� Why gradual and slow?

– ROI justification in areas to be served.

– Low ARPU levels in the addressable population.

– The large installed base of equipment cannot be swapped out immediately.

� Asia to dominate.

– Large use of satellites already, e.g. Indosat, Telcomcel, others.

– Usage of satellites to continue as part of core infrastructure.

– iPSTAR / Softbank to be replicated.

27


Bottom Line




Wireless Backhaul – Mobility

PlatformsThe Battleground Segment


Key Market Developments – Aircraft under Contract

29

June 16, 2014




Global Aeronautical Service Providers Commercial Aircraft Contracted

Service Provider Connectivity Type Start of Service Service Name Customers Number of

Aircraft*

GoGo LLC

Air-to-Ground (800

MHz) / ATG-4 / L-band

/ Ku-band/ HTS

2007/ 2013 /

2007/ 2013/

2015

GoGo

Air Canada, AirTran Airways, Alaska Airlines,

American Airlines, Delta Air Lines, Virgin

America, United Airlines. U.S. Airways.

AeroMexico, Japan Airlines

4,903

OnAIr L-Band / HTS 2007/ 2015

Aeroflot, AirAsia X, All Nippon Airways, AZAL,

British Airways, Cebu Pacific Air, Egyptair,

Emirates, Etihad, Hong Kong Airlines, Iberia,

Kuwait Airways, Libyan Airlines, Oman Air,

Philippine Airlines, Qatar Airways, Royal

Jordanian, Saudia, Singapore Airlines, Sri

Lankan Airlines, TAAG Angola Airlines, TAM

Airlines, Thai Airways

762

Panasonic (Incl.

Avionics and

Aeromobile)

L-Band/ Ku-band 2006/ 2012 eXPhone,

eXConnect

Emirates Airlines, Virgin Atlantic, Aer Lingus,

Cathay Pacific, Etihad, Gulf Air, Lufthansa,

SAS, Turkish Airlines, Thai Airways, Air New

Zealand, DragonAir, JAL, United Continental,

TransAero, Singapore Airlines, Garuda

Indonesia, WestJet, AeroMexico

1,728

Row44 Ku-band 2010

In-Flight

Broadband

Entertainment

Platform

Southwest Airlines

Norwegian Air Shuttle, Icelandair, UTair,

Mango Airlines, Allegiant Air

721

ViaSat Ku-band / Ka-band

HTS

2008/

Q4 2013 Yonder, Exede JetBlue, United Continental Airlines, El Al 592

TOTAL 8,706

*Based on announcements and current contracts Source: NSR, Service Providers



Key Market Developments

30

Aeronautical Mobile Broadband has arisen as an interesting

opportunity for HTS

– JetBlue- equipped 50 planes with WiFi, adding approx. 15 per month

– United Airlines is following suit- 75 aircraft equipped

– ViaSat wants to increase passenger usage of Wi-Fi from under 10% to 50% using this business model

– May 16, 2014 - ViaSat and Satcom Direct Integrate Aviation Satellite Service and Cabin Network Router




Aero

nau

tical

• Narrow-body Aircraft

• Wide-body Aircraft M

ari

tim

e • Passenger Ships• Cruise lines

Lan

d M

ob

ile • Passenger Trains

• Buses

June 16, 2014

31

In-service UnitsWireless Backhaul and Video Offload via Satellite: The Battleground between FSS and HTS

One solution does not fit all…� Aeronautical markets still require manageable ARPU levels to gain usage or increase customer

penetration, estimated currently at just 10% of passengers aboard the aircraft

� Maritime markets need large footprints, which may be an issue with upcoming HTS solutions

� Land Mobile is challenged by foliage, tunnels, re-establishing connections when links are lost, and most of all, terrestrial technology encroachment

Examples of End-user Markets




Wireless Backhaul Mobility Platforms

In-service Units

• Today, the market is Traditional FSS and L-band

• By 2023, the market is virtually tied between Traditional FSS and GEO-HTS

Capacity

• GEO-HTS is dominant

• Traditional FSS grows at steady levels

• MEO-HTS – a niche

32






In-service Units or Deployments

• Today, the market is Traditional FSS and L-band

• HTS is just beginning

• By 2023, the market is forecasted to shift from Traditional FSS to GEO-HTS

33





Wireless Backhaul Mobility Platforms – Bandwidth per Aircraft/Vessel

34



June 16, 2014

• Traditional FSS average to increase nominally

• GEO-HTS to almost double

• Largest allocation foreseen in MEO-HTS

Notes:

• These are averages

• Actual traffic during peak and non-peak

usage hours vary

• Bandwidth management also

leads to variations in allocation




However, revenues are almost equal for Ku-band, GEO-HTS and C-band…yes, C-band!

35






Wireless Backhaul Mobility Platforms - Service Pricing

36

June 16, 2014


� Which solution can provide these price points?

� Is it really just about price?

� Stable to slightly increasing ARPU levels in Mobility Platforms suggests it is NOT just about price.

� Capacity and service for Mobility Platforms is NOT a commoditized proposition.

� High SLA provisioning, QoS, coverage, simplicity, application bundles, etc.



Top-10 Mobility Service Revenues (Ku-band & HTS)

1. Ku-band COTP

$720 M

2. Ku-band Narrow body

$425 M

3. Ku-bandCOTM

$340 M

4. Ku-bandCom Shipping

$300 M

5. HTSGov/Mil Mar

$280 M

6. Ku-bandWide body

$230 M

7. HTSNarrow Body

$180 M

8. HTSPassenger Mar

$145 M

9. HTSWide Body

$130 M

10. HTSOffshore

$130 M

June 16, 2014

37

Wireless Backhaul Mobility Platforms - RevenuesWireless Backhaul and Video Offload via Satellite: The Battleground between FSS and HTS

# 4

# 1

# 2

# 3

# 6

# 8# 10

# 7 & 9

# 5

Mo

nth

ly A

RP

U -

->

In-service Units-->

HTS vs. Ku-band: Volume or Value?

FSS Ku-band Mobility HTS Mobility

• Six of the Top 10 Mobility Service Revenues are Wireless Backhaul Markets.

• Ku-band = $655 million

• HTS = $585 million




Bottom Line� From a revenue standpoint, no clear winner…yet… in this segment between

Traditional FSS and HTS.

� Implementations on all bands are taking place.

� Even L-band should have a market play.

� What is the right benchmark? Deployments or revenues?

� The market could change:

– Higher penetration of users on commercial airlines and maritime vessels from the current 10% could change the solution mix in favor of HTS;

– End user service costs could drop that leads to higher usage;

– Combined higher penetration or usage could lead to a preference for a frequency mix, i.e. HTS.

NSR believes the above market changes will take place. Thus, implementations (and eventually revenues ) should favor HTS.

38


Bottom Line




Video Offload

The “Wildcard”


Video Offload – Usage Trends

Video is already a large user of bandwidth and will increase further

40



Source: Ericsson

> 50%



Video Offload – Frequency Demand

• NSR is cautiously optimistic

• Small cells or picocells can act as standalone as well as complementary solutions to macrocells to manage data and video streaming traffic on a single BTS site

A clear market opportunity that is just waiting to be

tapped.

41





June 16, 2014

Video Offload - In-service UnitsWireless Backhaul and Video Offload via Satellite: The Battleground between FSS and HTS


• NSR does not see a market play for Video Offload via satellite currently for highly developed markets in North America and Western Europe as well as Central & Eastern Europe due to the high deployment of terrestrial infrastructure.

• This can certainly change should capacity to serve urban areas or satellites to act as back-up capacity to urban fiber networks become a market need.

• For the moment, NSR foresees Video Offload deployments to follow HTS deployments in key regions. Basically, the deployment of wireless backhaul on 3G/4G can be overlaid with Video Offload solutions.



Video Offload - UltraHD

• UltraHD to smart devices, laptops, tablets will further over-burden wireless networks

• The satellite industry is currently looking into UltraHD on its traditional markets –DTH and Video Distribution

• Perhaps synergies can be gained in looking into the wireless industry as well

43



Source: Ericsson



Bottom Line� This market is still in the vetting stage (for satellite companies)

� A “wildcard” as the market potential can be many times NSR’s projections depending on howthe market develops.

� A packaged wireless backhaul / video offload can be bundled.

� A packaged trunking / video offload can likewise be bundled.

� Many other technical possibilities that can leverage satellite’s broadcast economicsadvantage can be offered.

If or when UltraHD to handsets and mobile form factors to consumers becomes a reality, the regional demand picture may change.

44


Bottom Line




Bottom Line

What is the future landscape?


Bottom Line

A 3G/4G Landscape

• Video Offload and Trunking are inherently 3G/4G.

• In the backhaul market, Mobility Platforms will drive 3G/4G deployments.

• 3G/4G on Land-based Towers is still a question mark…and the question is, can the market move past the Softbank iPSTAR contract?

3G/4G is a wealthy country / wealthy consumer and enterprise market. Fixed Land-based Towers serving less wealthy rural populations will remain a highly-challenged market proposition.

46





Bottom Line

• Traditional FSS C-band expected to decline due to high costs associated with serving Fixed Land-based Towers Backhaul.

• Backhaul for Mobility Platforms will deploy both Traditional FSS Ku-band and HTS.

Market to shift from Traditional FSS to HTS expected by 2017

47





Bottom Line� The overall market is expected to move towards HTS

� In the Wireless Backhaul Market:

– Growth will be driven by Mobility Platforms.

– SCPC/TDMA systems running on Traditional FSS C-band and Ku-band transponders are expected to decline while next-generation systems, specifically GEO-HTS and MEO HTS will grow.

– Demand for Macrocells is expected to be outpaced by Small Cells and Picocells.

– 2G/2.5G installations will give way to 3G/4G deployments driven once again by Mobility Platforms.

� The Video Offload Market will be on HTS

48


Bottom Line




Questions?

Jose Del RosarioResearch Director, NSR Manila

www.nsr.com

Europe Office

Northern Sky Research, Ltd (NSR)19 Bolsover StreetLondon W1W 5NA

United KingdomPhone: 44 (0) 207 886 0875

U.S. Office

Northern Sky Research, LLC (NSR)1000 N. West St., Suite 1200Wilmington, DE 19801

United StatesPhone: 302-295-4981

Christopher BaughPresident, NSR London


� PowerPoint Slides and Session Recording Available on NSR Website within 24 Hours

– NSR Homepage > News & Resources > Webinar & Presentation Archive

� Contacts for Further Questions

Christopher Baugh, [email protected]

Jose Del Rosario, [email protected]

Thank you for attending!


50

Wrap-UpWireless Backhaul and Video Offload via Satellite: The Battleground between FSS and HTS

Report NOW AVAILABLE!Visit www.nsr.com for report

executive summary and more info



U.S. OfficeNorthern Sky Research, LLC (NSR)1000 N. West St., Suite 1200Wilmington, DE 19801Phone: 302-295-4981Fax:302-295-4801

NSR

Europe Office

Northern Sky Research, Ltd (NSR)19 Bolsover StreetLondon W1W 5NA

United KingdomPhone: 44 (0) 207 886 0875

www.nsr.com

Global in Reach. Local in Knowledge. Bottom Line Analysis.

Documents

NSR Webinar- Wireless Backhaul & Video Offload via ... · PDF fileOffload via Satellite: The Battleground between FSS and HTS ... 3G and 4G/LTE services on over 1 ... Comtech and Supernet