We’re hearing a great deal about 5G and the role that satellite is set to play in the ecosystem, but the industry could be getting ahead of itself as 4G rollouts are still incomplete. According to OpenSignal, more than 75 countries have deployed 4G networks but in 28 of them, deployment has only reached 60 percent of the population. This presents a huge opportunity for satellite backhaul.

Where are the opportunities and how can the satellite industry reach the untapped subscribers? Denis Curtin, principal at Communications Satellite Consultants, moderated the session that endeavored to find out the answers.

Satellite has long been considered a last resort for backhaul and has really experienced somewhat of an image problem. However, this does seem to be changing today.

Ron Levin, vice president of global accounts at Gilat Satellite Networks, said that there are a few dynamics allowing satellite to step out into the mainstream. “Firstly, satellite prices are dropping and this is a trend that is expected to continue,” he said. “Secondly, when you move from 3G to 4G, the usage patterns are different and no longer voice driven. This demand is enabling satellite to go where it hasn’t before.”

The thirst for data and lower satellite costs appear to be creating a perfect storm for satellite backhaul and this growth is happening in both developed and developing markets.

Semir Hassanaly, market director for mobile backhaul and trunking at Newtec, sees demand everywhere. “It’s coming from all over. North America and Western Europe, Latin America, Africa and lots in Asia for different applications. It is more to do with population and less to do with geography.”The panel (and audience) unanimously agreed that round trip times are critical for 3G, voice-based services. Latency below 700 milliseconds is essential. With 4G, the data packages get much bigger and demand much higher bandwidth rates. The key challenge here is to minimize jitter and to ensure that there is consistency in terms of latency. In 4G networks, customers will not tolerate packet loss. “Requirements from clients are more strict than ever in 4G,” said Bryan McGuirk, chief commercial officer at Globecomm.

In terms of economics, mobile operators have a big decision to make when they look at which form of backhaul solution to use and this is often dependent on what is available.

From a CAPEX perspective, VSAT is able to compete on a point-to-point link, as Vinay Patel, senior director and regional manager for Sub-Saharan Africa at Hughes explained. ”You can install a VSAT anywhere. There’s not even an economic case to be made, especially with HTS coming online — it’s a clear-cut case. Satellite can compete anywhere with microwave point to point installations,” he said.

With new and existing NGSO constellations coming online that offer low latency, what opportunities lie ahead? Will customers leapfrog straight from 2G to 4G? “For the most part the transition for the customer in 2G will be straight into 4G, especially in Latin America,” Omar Trujillo, vice president of Latam sales at O3b, explained.

Is there concern from O3b about competition from new LEO operators? “We were the first ones to take this step,” said Trujillo. “Yes, there will be competition but we have the experience and getting that takes some time.”

For mobile operators, ARPU remains an absolutely key issue. So, is the market growing or is ARPU growing? Patel addressed this question saying that there is a big ARPU hurdle from the operator perspective. He explained that they have to make decisions on a case-by-case basis. No site is the same and ARPU varies wildly.

With dependence on the mobile phone increasing exponentially, there is a massive market out there for satellite-based backhaul but, going back to the image problem mentioned at the beginning, there is work to be done. Prices are dropping, terminal costs are dropping and they are getting smaller but, as McGuirk emphasized, the satellite industry needs to tell the story better. “Historically, trunking is like a sugar high and as fiber comes in, its gone. I see a different paradigm developing where we can compete on cost per bit. I think there will be a segment of the industry that will remain satellite.” VS