Cellular backhaul has always been a strong market for satellite. Working with telcos and connecting people away from urban centers has always been a natural fit. Now, it seems this market is primed for even greater growth. Via Satellite spoke to a number of satellite players about this market and how they see this evolution.
Things are changing. A market that was already considered good, is on the verge of getting better. Michal Aharonov, vice president of Global Broadband Networks for Gilat Satellite Networks says the adoption of satellite backhaul has grown substantially over the past years and is expected to continue to do so, according to Gilat's analysis backed by various industry analysts. She believes that satellite backhaul has become an economically viable solution answering the strictest Service Level Agreements (SLA), and for many Mobile Network Operators (MNO), is no longer a niche play.
Aharonov cites the fact that in the past, the satellite option for cellular backhaul was often used only as a fallback for hard to reach rural areas such as islands, mountains and deserts, where terrestrial infrastructure such as fiber, next-generation copper, or microwave was either too expensive or unfeasible. But, things are now changing. She adds, “Today, Gilat sees that the increasing need for high-throughput data networks together with improved economics and advancements in technology in both the satellite capacity and on the ground-segment are causing MNOs to rethink old habits. MNOs are increasingly focused on their core business and outsourcing non-core competencies, opening the opportunity for satcom to offer managed services.”
Aharonov believes satellite backhaul today is often the preferred choice for leading MNOs worldwide in various applications of 2G/3G/4G cellular backhaul. She shares examples deployed by Gilat including Softbank in Japan, Sprint in the United States, TIM Brasil, and Africa Mobile Networks (AMN).
This is not an uncommon view among key players in the satellite industry. Bhanu Durvasula, vice president of Hughes International Division believes when it comes to bandwidth consumption, there is no doubt that cellular backhaul is a key growth market – particularly as the industry is able to drive down towards a price of $100 per Mbps/month.
“One notable example is in Indonesia where our Jupiter System has been deployed in over 1,500 base stations in support of the Universal Service Obligation (USO) program administered by BAKTI, the Indonesian telecommunications agency. We think this is the largest Layer-2 deployment in the world, and a harbinger of what’s to come in the industry,” he says. “Our platform can support over 300 Mbps to a cell site efficiently thanks to intelligent traffic acceleration and compression schemes. In addition, we support dynamic switching between Time Division Multiple Access (TDMA) and Time Division Multiplexing (TDM) return channels – so as to adapt to changing traffic conditions and optimize the bandwidth allocation across the network.”
Durvasula believes that the COVID-19 pandemic is reinforcing how important it is that people have internet access, and how much of that is on mobile phones. He cites the Cisco Visual Networking Index which predicts that by 2022, smartphones will account for 44% of total IP traffic. “It’s truly no longer a nice-to-have but a real necessity for everything from telework, to remote education, to telehealth, to accessing essential government and medical information. And the reality is that people use their smartphones to access that information. Governments that haven’t already mandated MNOs extend their service reach are likely to do so in the wake of this crisis – and satellite must be built into that infrastructure if everyone, even people in less densely populated areas, is to have the connectivity they need,” he says.
Exciting New Markets
The perception has been for many years that the backhaul market has been concentrated around emerging markets such as Africa and Asia, where there is a need to reduce digital divides in hard to reach areas for fiber and wireless. While the demand for backhaul services in those regions is still there, what is exciting about this market is satellite backhaul is expected to offer some interesting other opportunities. Thomas Van den Driessche, president and CCO of ST Engineering iDirect says the company sees growth in every market as opposed to a few years ago, when there was growth only in emerging markets.
“Why do we see growth everywhere? The first reason is that today, and in the future, in more established markets, the growth will come through interoperability with 5G first, and with additional services that satellite can provide for first responder and critical services,” he says. “Secondly, it will be driven by 5G, and satellite will be interoperable with terrestrial networks. Satellite will offer the ability to cater for specific applications at the right cost point. These are going to be the future drivers for cellular backhaul.”
Van den Driessche highlights the fact that the cost of satellite bandwidth and even the cost of the technology is coming down but satellite services also perform better and are more efficient so they provide more for the money. Satellite also offers benefits in terms of cost when you use its multicast capability which makes it much more cost effective than terrestrial for cellular-based infrastructure, he adds.
As the pandemic stretches across the world, Van den Driessche says mobile operators need their networks to remain up and running for critical disaster response and recovery efforts — even when terrestrial networks have been damaged or are unavailable. He believes, with satellite connectivity, mobile operators can offer first responders and government agencies critical communications immediately following a disaster, ensuring relief teams can connect residents, coordinate aid, and maintain the continuity of government as communities recover.
“With mobile command centers, [Very Small Aperture Terminal] VSAT connected vehicles and/or fly-away packages, first response teams can establish a rapidly deployable hotspot, provide broadband and mobile connectivity for essential life-saving and coordinating efforts, and power Communications-on-the-Move connectivity for first response vehicles to increase situational awareness and response times,” he adds. ST Engineering has seen an increased requirement for cellular backhaul. “There are some very large projects being planned, where we are involved, that will use an increasing amount of cellular backhaul capacity,” he says.
Aharonov of Gilat Satellite Networks believes the use cases for satellite backhaul vary greatly and have changed worldwide over the years to include high throughput requirements for upload, as well as for download. She believes end users want to share data such as videos and photos over social media, shifting the download-centric traffic profile with a growing need for data upload. “Both the economics, as well as overcoming technical challenges, have brought satellite backhauling to the forefront in the more established markets as well as in the developing world. Clearly the traditional markets of Asia, Africa, and Latin America are prime candidates for connectivity due to the lack of terrestrial infrastructure. However, at Gilat we see significant growth and need in the developed world,” she says.
Gilat’s customer base is widening in this area. Aharonov cites some recent examples. She points to the fact that the United Kingdom's Home Office has commissioned the Mobile Network Operator EE, part of the BT Group, to deliver emergency service coverage for the whole of the U.K. over its 4G network. The requirement is for a secure and resilient communication network to support emergency services and public safety throughout the U.K., reaching the most sparsely populated areas as well as providing backup to terrestrial networks across the country. She says Gilat is in the process of deploying about 1,000 LTE satellite backhaul sites supporting multiple use cases as part one of the world's largest 4G Emergency Service Network (ESN) in the U.K.
Aharonov admits there is an increasing role for rural connectivity and providing a satellite backhaul solution to enable 4G services to unserved areas, such as highways and small towns, as well as to the Internet of Things (IoT) market. As an example, Gilat provides 4G services to TIM Brasil's agriculture IoT business from the coastline into the country. Gilat’s 4G network expansion allows TIM to connect machines and operators to real-time control and monitoring of harvesters and agricultural tractors. This enables cost-effective decisions, and quick and effective crop management and further productivity in the production flow.
Durvasula also says the types of conversations that Hughes is having with its customers are changing. He says customers are now talking more about the deployment of 4G/LTE base stations over 2G or 3G base stations. “The demand for video continues to surge everywhere – and people in remote and rural areas are just as hungry for streaming as people who live in big cities. Our customers are well aware of this fact and in many places are planning to leapfrog from 2G directly to 4G/LTE to meet their customers’ appetite for video content. This can take the form of converting existing sites or installing new ones,” Durvasula says. “As for the technology, in response to our MNO customers, we have implemented 4G acceleration over satellite to improve the user experience and bandwidth efficiency. Additionally, we’ve introduced Layer 2 connectivity for cellular backhaul solutions to eliminate any IP networking issues in our customers’ implementations.”
It is clear that telcos attitudes are changing as satellite becomes a more appealing option. Durvasula says Hughes is seeing more MNOs exploring satellite for backhaul, and claims it is smart business for them. “Fiber deployments can cost as much as $20,000 per mile. And one microwave hop can cost up to $97,000! On the other hand, the CapEx investment to backhaul a base station by satellite is only about $2,000, and the operating expense is just $30-40 per month. It is just not possible to deploy fiber everywhere, and we are seeing more MNOs rightly contemplating the business case for using satellite to extend their networks,” he says.
One of the challenges has been to overcome what are perceived misconceptions on the part of telcos in the market. Aharonov believes there are three main misconceptions about satellite backhaul that are now being dismissed by an increasing number of telcos. The first misconception he mentions is that satellite backhaul cannot achieve 4G/5G performance. She believes satellite technology has evolved to deliver speed, performance and terrestrial-grade user experience. The second misconception is that satellite connectivity is expensive. However, with the introduction of High Throughput Satellites (HTS), Very HTS (VHTS), and the promise of Non-Geostationary Orbit (NGSO) constellations, this has brought about an abundance of capacity and a significant decline in price. Aharonov believes significant savings in cost can be achieved by regarding satellite backhaul as a managed service.
“The managed service is considered as a black box and end-to-end responsibility is given to the satellite backhaul provider which will enable the MNO to focus on their business and reduce costs. The MNO's involvement is in specifying the requirements, the service level agreement and key performance indicators, as well as the required site locations and the schedule,” Aharonov says.
The final misconception is that satellite connectivity is too complex. Aharonov believes this is no longer the case with comprehensive suites of services simplify deployment, integration and operation. Satellite backhaul can be deployed in a way that reduces complexity. “Gilat has performed seamless integration of the terrestrial and satellite network at Layer-2 with its global centralized TotalNMS. Furthermore, with the adoption of 5G, Gilat demonstrated full orchestration of the satellite network with the core network. These adoptions of the 5G protocols to work seamlessly with the satellite network indeed reduce the complexity,” she says.
Van den Driessche says satellite must be complementary to the terrestrial infrastructure. It must blend in and be totally seamless. “It’s all about providing the ideal connectivity based on cost requirements, based on latency requirements, so any application should be able to get the connectivity they need based on the characteristics of the application. Satellite will continue to provide connectivity to where it is difficult to reach, in remote areas. It will still be a key transport solution,” he says.
ST Engineering will soon introduce its latest MxDMA MRC (multi-resolution coding) technology. Van den Driessche says this will allow the additional scalability that service providers need to cater for ultra-rural and ultra-ultra rural connectivity, and also for the increasing number of IoT networks, for example. Its Newtec Dialog platform offers extremely high throughput, efficient links with the highest Quality of Service (QoS) and Quality of Experience (QoE). Coupled with MxDMA-MRC technology, the company believes it can cater for all types of networks, from bursty TDMA all the way through Single Channel per Carrier (SCPC) network profiles.
“In the coming years, the next stage of evolution for mobile network operators concerns 5G, which calls for a total integration of satellite connectivity with the 5G network model,” Van den Driessche says. “5G will transform how users experience new connectivity services by bringing unprecedented scale and power to new applications, delivering exceptionally higher levels of bandwidth and connectivity to individuals and businesses around the world. For network operators, this means building a new network architecture with exponentially higher efficiencies, massive scalability, lower costs for mobile and fixed networks, and ultra-low latency for critical applications.”
Durvasula says what we are seeing now is that networks are becoming more and more complex as the industry works to satisfy the insatiable global demand for more and more bandwidth. “With that in mind, the biggest challenge that we see over the next decade is going to be how to simplify and automate network applications, despite the increasing complexity, and there is a very real and important role for the satellite industry in that future,” he says. VS