Satellite players need video offload plan: NSR

04 Jun 2014

ITEM: Cellcos have been turning to Wi-Fi to offload data traffic, but at some point that's not going to be enough. And when it’s not, satellite players are going to be in a position to cash in – but probably not for at least a few more years.

That’s according to a new report from satellite analyst firm NSR, which points out that by 2018, over half of mobile data traffic (over 7 exabytes) per month will be video (according to forecasts from Ericsson), and that video will have to be distributed to base stations one way or another.

As it happens, satellite lives and breathes video distribution – in the case of mobile, a base station is really just another video headend. A low cost/high volume model using HTS (high throughput satellite) technology could yield the same economics that consumer broadband access is achieving already.

That may in fact be part of the logic behind AT&T’s plan to acquire DirecTV in the US, which would allow the telco to offload linear video from its cellular network.

Of course, buying a satellite operator isn’t a realistic option for most cellcos, especially in Asia. Consequently, NSR does note that HTS “is not and will not be the cornerstone of a wireless telco’s video offload or traffic offload strategy” – cellcos will continue to rely on Wi-Fi for that.

But NSR says HTS “can certainly be part of the network infrastructure, either as a core component or a complementary layer.”

All that said, NSR says that while there’s a definite opportunity here for satellite operators looking for new revenue streams, the industry as a whole doesn’t have a plan to capitalize on it, because the ROI benchmarks proving a business case just aren't there yet.

There’s a good reason for that – actual demand doesn’t really exist yet for satellite-based video offload, and won’t for at least another three years.

But it will, says NSR analyst Jose Del Rosario:

In NSR’s view, it is not a matter of “if” but “when” satellite players begin developing technical solutions as well as signing deals to partner with mobile operators to specifically address traffic offload issues. A 2017 timeframe is foreseen by NSR to be the start of the video offload via satellite market and considers the proposition as a “wildcard” where traffic and revenue prospects can achieve higher levels of growth compared to current projections.

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