NBN kicks off satellite broadband segment

John C. Tanner
24 Jun 2011

Ever since the architects of Australia's Next-Generation Broadband (NBN) project elected to drop Wimax in favor of fiber as the default access technology covering 93% of homes, the plan has been to leverage wireless broadband and satellite technology to cover the remaining 7%. Last month, the satellite portion of the project kicked into gear as NBN Co awarded A$300 million ($279.3 million) worth of satellite deals to SingTel's Australian subsidiary, Optus, and Thaicom's IPStar Australia, with plans to start offering interim satellite broadband services starting next month.

IPStar Australia landed a A$100 million deal to provide capacity on the Thaicom 4 satellite while Optus struck a five-year deal worth A$200 million to not only supply satellite capacity, but also managed services. Optus, in turn, has contracted Israel-based satellite specialist Gilat Satellite Networks to deploy VSAT equipment at gateways and end-user premises for the service. The $120 million deal includes an initial 11 hubs and 20,000 VSATs, expandable to up to 48,000 VSATs, as well as operations and maintenance of the VSAT network.

The interim wholesale solution will allow retailers to offer services with peak downlink data speeds of 6 Mbps and uplink speeds of 1 Mbps. Once NBN Co launches two new next-gen Ka-band satellites in 2014/15, satellite users will be able to get downlink speeds of 12 Mbps.

Cheaper but subsidized

The satellite portion of the NBN is potentially a watershed moment for satellite broadband, which has often been touted as an ideal solution for rural broadband in terms of infrastructure and coverage, but often perceived as a last-resort service due to VSAT equipment and capacity being considerably more expensive for end-users.

As First Mile reported last month, that perception is expected to change as next-generation Ka-band High Throughput Satellites (HTS) enter commercial service this year. Such satellites promise considerably lower bandwidth costs via Ka-band spot beams with more efficient frequency reuse, as well as the sheer amount of bandwidth provided.

"The main limiting factors we've seen for satellite broadband have been the amount of capacity and the cost of capacity for the service provider," says Gilat VP Doron Elinav. "As more high-quality capacity becomes available - via either dedicated Ka-band satellites or satellites with Ka-band spot beams mixed with Ku-band or C-band payloads - service providers in a given market can light up that capacity for a fraction of the cost per-Mbps, and get better efficiencies because the power is much higher than before."

Elinav adds that satellite broadband has already been determined to be the cheapest rural option for the NBN project.

"According to the analysis commissioned by NBN Co, to reach that last 5% or 7% of the population, it's impossible to justify terrestrial wireless financially, because the density of the population in those areas is so low," he says.

However, that doesn't mean it's as cheap as deploying broadband in dense metro areas, which means the success of the satellite portion will depend on NBN Co subsidizing the service to keep prices on par with urban areas, Elinav adds.

"It's a government-funded project, so without that it would be very difficult to be competitive," he says.

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