Australia to require 2 Ka-band satellites for universal coverage

The Australian government has released the implementation plan for its National Broadband Network (NBN) that explicitly states the need for two Ka-band satellites needed to offer last-mile service to rural areas.
The plan calls for satellite to be the…

The Australian government has released the implementation plan for its National Broadband Network (NBN) that explicitly states the need for two Ka-band satellites needed to offer last-mile service to rural areas.

The plan calls for satellite to be the exclusive delivery system for 12 megabyte per second broadband speeds to the 3% of rural Australian households that cannot be reached by terrestrial forms of communication.

This satellite footprint will also cover the 7% of the population that falls outside fibre coverage.

Under the plan, two satellites are an absolute necessity in order to provide orbital redundancy. The second satellite will likely be launched 18-24 months after the first, in order for the initial capacity use to be monitored.

Due to the lack of Ka-band coverage over Australia, the implementation study recommends that the state-created NBN Company contract with satellite operators to provide the two satellites and the required earth gateways.

Though the specifics are still to be finalised, the Study used a dual system of two medium-sized satellites with combined throughput of 110 Gigabits per second as its operating model. It estimated that such a system would require eleven gateways.

The study advises that the cost of this system must be fully derived from NBN Co’s A$43bn capital investment budget.

NBN Co has been ordered to charge wholesale prices for bandwidth so that it can be resold through affordable retail offers. The report acknowledges that “it is unlikely a next-generation satellite service could provide affordable prices and achieve a commercial return.”

This indicates that NBN Co is likely to buy capacity outright at an initial fixed price from any operator it may partner with, and then offer the bandwidth at subsidised lower prices.

The report also acknowledges that the arrival of Ka-band coverage is at least three years away, and that it is necessary to procure further amounts of Ku-band coverage over rural regions in the interim period.

The implementation plan’s conclusions are not a surprise, as both NBN Co and the Australian government have previously stated of the need for a satellite component to universal coverage.

However, it is still significant because this plan is not like EU or US reports on universal broadband coverage that mention the satellite option, but do not seriously pursue it. This study is based on the absolute necessity of satellite technology for the achievement of its goals.

Hughes establishes Australian subsidiary

Hughes Network Systems has created an Australian subsidiary to take advantage of the country’s demand for Ka-band satellite services.

Hughes is the first company without an established Australian unit to publicly announce its interest in working with the Australian government on its National Broadband Network (NBN).

Hughes CEO Pradman Kaul said: “We congratulate the Australian government on its mission to bridge the digital divide across this vast and beautiful country.

“Satellite is the ideal technology to bring high-speed internet services to homes and offices affordably, even in the least populated areas, and establishing this office means we can more actively engage in helping fulfil that mission.”

Hughes has established a strong consumer and enterprise satellite broadband business in the USA. However, the Australian market is unlikely to be capable of supporting a stand-alone business model along those lines, and Hughes will look to receive considerable funding from the Australian government well beyond the costs of any initial satellite systems it may build if the endeavour is to be profitable.

NBN Co has clearly stated that the required price of services from the plan’s satellites will be too low to provide a commercial return and this point was echoed at the recent Australasia Satellite Forum in Sydney. Paul Sheridan, vice-chairman of Optus, Australia’s largest satellite operator, said: “The proof is in the way that our business operates. It’s primarily a television broadcast business. That’s what gets the satellites up there. We’re then able to leverage the capacity to provide a telecommunications solution – the Australian Broadband Guarantee Funding definitely affected the uptake of those services. Could it be done stand-alone? We haven’t been able to find a way to do it.”

Professor Reg Coutts of the consultancy Coutts Communications said that the market has thus far failed to provide telecommunications to that last 3% of Australians.

“It’s not a business case, it’s a cost/benefit analysis,” he said. “It’s about empowering those remote communities to be part of the wider Australian community. Over 30 years I’ve seen a lot of business cases and some are very useful, but I don’t think they are a reality.”

Hughes said that it was looking forward to working with Australian partners. The company already has a long history of supplying satellite broadband technology to existing Australian operators.