Emerging Opportunities in Satellite Communications
Internet via Satellite 2001
798 pages. £995, $1,495

Management Summary and Contents PDF

A 56% Increase in Market Size

Internet via Satellite, published in May 2001, is the fourth edition of DTT Consulting's annual market research survey on the use of satellites for Internet services. It is an authoritative source of original and comprehensive data on the size and structure of the market. It provides the user with a wealth of contacts for potential ISP and service customers and a directory of all the significant suppliers in the market.

It shows actual size of and growth in the market over three years by sector and major geographic region, and provides robust conclusions about key current developments in the IP over satellite business. It takes a bottom up approach to research, using data from end- users and service providers to estimate market size. It offers a comprehensive list of web sites and email addresses and other information sources to provide an excellent base from which to conduct further research and keep up to date with rapidly changing developments.

Our approach reflects almost four continuous years of research on Internet via satellite – since this sector started. We also have eighteen years of experience of consulting to new ventures and major organisations in satellite communications. As with last year’s Internet via Satellite Report we have provided a major regional analysis of the marketplace, listing all existing ISPs who use or might use satellite communications in Central and Eastern Europe, the CIS, the Middle East, Asia, Australasia, Oceania, Latin America, the Caribbean and Africa.

Due to the rapid development of the IP over satellite business, the report has been considerably expanded and now extends to four volumes. We have introduced new research techniques to identify satellite links. Purchasers of the Microsoft Word 2000 electronic version (available at a modest extra cost to subscribers) will be able to the hypertext links to visit the web sites of all known ISPs in the above regions and all of the main satellite carriers and many other organisations. It also provides several thousand email contacts through using hypertext links. The Internet via Satellite 2001 report runs to 798 pages. It contains approximately 195 charts and tables providing statistics and summary management information on market size and structure.

The report is 374,700 words according to a Microsoft Word count. The original Internet via Satellite 1998 was 214 pages long, indicating just how fast the market for Internet via satellite has grown.The report provides details of satellite carriers, operators and service providers involved in IP over satellite as well as those offering satellite-based two-way and hybrid access, content distribution and caching and Usenet feeds.

It details all the known satellite links between ISPs and backbone, naming the ISPs and carriers involved as well as estimating or providing accurate bandwidth rates. Internet via Satellite 2001 is aimed at satellite operators, satellite service providers, satellite manufacturers, telecommunications carriers, ISPs, manufacturers of satellites, manufacturers of professional and consumer ground equipment, R&D institutions, regulatory and policy makers, financial institutions, consultants, broadcasters and media companies.

However, the last year or so has seen the launch of new two-way access services using inexpensive terminals. The launch of these services has been slow due to technical difficulties but our research suggests that ISPs are keen to be able to use the technology (and the older hybrid access systems) to offer their customers high-speed access. This suggests that a new model of Internet via satellite may be emerging in which ISPs that have used satellites to link to backbone may focus on new satellite services even if they turn to fibre for their main point-to-point links.

Such services include offering customers satellite-based access, streaming, multicasting and content distribution as well as specialised applications such as distance education and training. Indeed, the ISPs may also want satellite-based content distribution services for use by their leased line, DSL or dial- up customers. A clear driver behind the content distribution services is the growth in broadband access services such as DSL and cable modems. However, these have been slow to develop so far which provides an opportunity for satellite-based two-way access. In our view, satellite-based access is cost competitive for many users with 56 K dial up services in countries that have metered local call charges like the UK. As the alternatives as slow to develop, this suggests that many heavy Internet users have little option but to use satellites for some years to come.

Hitherto, the received wisdom in the USA is that two-way satellite access best serves the rural areas where cable and DSL will be absent. We are not convinced this is the case in much of the rest of the world. Another key development in the Internet via satellite world has been the blurring of the distinction between hybrid access services and content distribution networks. It has proved very difficult to establish a successful business model for the hybrid-access technology but it provides an extremely cost effective data and video broadcasting platform. Moreover the extension of the predominant DVB standards from one-way to two-way services (especially in the Ka-band multimedia satellite environment) offers Europe the prospect of another competitive advantage over the USA.

In the point-to-point market where ISPs use satellites to link to backbone, the last year has seen a large increase in the size of the market and an increase in the proportion of ISPs using satellites. Some 13% of ISPs are directly or indirectly (through another ISP) connecting to backbone via satellite – usually in the USA. However, it is clear that the market is shifting to fibre. Back in 1998, Western Europe was one of the key markets for such satellite links; Central and Eastern Europe soon followed. In Western Europe such links are now commercially almost irrelevant and in most of the better developed countries of Central Europe satellites have been abandoned in favour of fibre. That loss of market, though, is offset by new, more geographically distant, rapidly expanding markets. The Ukraine has been the best example in Eastern Europe over the last year or so. In Asia the liberalisation of the Indian market has opened what looks to be substantial short to medium term demand for satellite capacity. Demand for satellite capacity in Iran has offset the now nearly universal use of submarine fibre by the Gulf states.

It is also clear that fibre will never reach the more remote parts of even some of the most prosperous of countries such as Australia. Moreover, there are still some parts of the world were use of Internet has yet to grow substantially. These include much of the Asian part of Russia, parts of the Middle East and those parts of South East Asia and Africa where it has been politically repressed (Vietnam, Algeria, for example). We also expect growing demand for satellite capacity and links from those parts of the world that may never have full access to international fibre such as much of Africa

Click charts to enlarge

Value of Satellite ISP Link Marketplace, US$ millions, by Transponder Lease Value

Total value of the IP over Satellite Market, US$m

Major Market Segments, Internet via Satellite